Apple, AT&T Hit With Second iPhone Lawsuit

Aug. 17, 2007 — -- A second class action was filed this week against AT&T and Apple over battery issues in the much-hyped iPhone.

Similar to a lawsuit that was filed last month in Illinois, the new lawsuit, filed in U.S. District Court in California Monday, alleges that Apple and AT&T deliberately did not inform consumers about the process of and costs associated with battery replacement in the device prior to its launch.

"The issue is whether or not Apple properly disclosed the problems with battery life," Max Folkenflik, a managing partner at New York-based Folkenflik and McGerity, told ABCNEWS.com. Folkenflik is one law firm representing the California-based plaintiff Sydney Leung.

"There's a question that [Apple] has naturally raised is whether they designed a battery that requires a replacement in order to generate further profits, and that's something we'll have to take a look at," he said.

The company doesn't comment on pending litigation, an Apple spokeswoman said.

Both the California and Illinois lawsuits allege that the iPhone's lithium ion battery can be charged only about 300 times -- although that number has been widely disputed -- requiring owners to purchase a new battery before their required two-year contracts end. Lithium ion batteries do have a limited shelf life, but there is debate over the length of that shelf life.

Once the iPhone battery is dead, customers must return their phones to Apple to have new batteries installed. The service costs $79, plus $6.95 for shipping. The installation takes about three days and wipes all information off the phone.

Apple announced the battery-replacement program a week after the iPhone's release June 29. However, many media outlets, including ABC News, reported on potential battery problems before the phone's release.

"One of the advantages in California [is that the state] has particularly good laws in protecting consumers from unfair trade practices," Folkenflik said.

According to court documents, Leung is seeking to be repaid for the cost of replacing the battery and punitive damages.

Folkenflik said it's too early to determine an actual dollar amount.

"The batteries are not as they should be," he said. "How you translate that into [a settlement], we're going to have to explore."

In the lawsuit filed in a Chicago court, Jose Trujillo of Melrose Park, Ill., is suing the companies for $75,000 in damages.

H. Tim Hoffman, co-counsel with Folkenflik and a partner in the Oakland-based firm Hoffman and Lazear, doesn't think the Illinois case will affect his client's suit. He also believes that this won't be the last iPhone suit.

"I imagine more cases will be filed," he said, adding that he expected more potential clients to call about his case.

Rob Enderle, a Silicon Valley tech analyst who predicted before the phone's release that Apple might face these battery issues, said he believes that similar lawsuits might have footing.

"Apple didn't specifically disclose the battery complaint until after the first couple of days. You could argue the company didn't disclose this," he said. "The company has the obligation to disclose any significant flaws that they know about and the battery would be a significant flaw."

In 2005, Apple compensated early iPod users with $50 of in-store credit or $25 cash in another class action over the short lifespan of the battery in an early edition of the iPod.

"The guys who sued on the iPod battery won," Enderle said. "[It's the] same kind of mistake that was made with the iPod."

What makes this case different, Enderle said, is the fact that iPhone users, unlike iPod owners, have contracts that require them to use AT&T service for a period of time.

"I think the contract strengthens the case," Enderle said. "It establishes a reasonable service life and the battery would fail within that service life."

Hoffman also believes the iPod lawsuit could reflect favorably on the litigation.

"Yes, I believe that will help this case. It appears that they might have done it again," he said.

Apple has until Sept. 4 to respond to the lawsuit.