IPhone 3G Draws Second Class Action Suit

Sept. 4, 2008— -- The iPhone 3G has spawned legions of ecstatic customers, along with a small but determined band of critics who have sued over the phone's reported shortcomings.

Last week, in a San Diego state court, a second dissatisfied iPhone 3G customer filed a suit seeking class action status against Apple and AT&T.

"The main issue is that AT&T's 3G network isn't strong enough to support the millions of people who are iPhone 3G users," Michael Rott, a partner with the San Diego-based law firm Hiden, Rott & Oertle, LLP, told ABCNews.com. "Apple violated [California law] by misrepresenting the actual speed and performance of its 8G and 16G models."

Rott filed the suit in San Diego Superior Court on behalf of iPhone user William Gillis. Rott said Gillis, a former executive with Chicken of the Sea, purchased Apple's flagship 16G iPhone in California for personal use. Despite advertisements touting the new phone's ability to run on the 3G network, he found that the phone frequently regressed to the slower EDGE network, Rott said.

"We're stating that they falsely and deceptively represented their products and services -- both them and ATT," Rott said.

AT&T spokesman Mark Siegel told ABCNews.com that the company doesn't comment on pending litigation.

Apple representatives did not immediately respond to requests from ABCNews.com for comment. But previously, the company also hasn't commented on such suits.

Gillis' complaint asks for appropriate disclaimers to be provided by the companies and for money to be returned to iPhone customers, Rott said.

"The whole thing is by providing consumers with disclaimers -- essentially to disclose complete and accurate info about the product -- you let customers [decide to purchase] your product or another one. [Apple] didn't give that info -- neither did AT&T," Rott said.

A similar complaint was filed against California-based Apple by an iPhone customer in Alabama about two weeks ago.

In that U.S. District Court case, plaintiff Jessica Alena Smith alleged that despite aggressive marketing stating the 3G iPhone is "twice as fast for half the price," the device is actually much slower than advertised and prone to dropping calls.

Both lawsuits followed a string of highly publicized complaints -- from spotty service to dropped calls to slow data speeds.

Despite the onslaught of criticism, many industry observers maintain that Apple customers are a loyal breed willing to withstand the blips.

But some analysts say that though Apple's reputation is certainly strong, it is not impenetrable.

"The more this kind of thing happens, the more the image becomes tarnished," Rob Enderle, an independent technology analyst, told ABCNews.com.

"[Apple is] unique in that they have a fan base that will see them through almost anything," he said. But the word "almost" is important, he emphasized.

"It's getting to the point where it's going to do damage. ... There are enough people who are upset. But if it were anyone else it would have already done more," Enderle said.

When Apple released the first generation iPhone it also had to defend itself against lawsuits brought by dissatisfied customers.

In 2007, Apple was hit with complaints filed in Illinois and California over reported short battery life. The suit filed in California was ultimately withdrawn. The Illinois case is still pending. Apple has moved to dismiss the case but the judge has not yet issued a ruling.

In 2005, Apple compensated some owners of first- and second-generation iPods with $50 of in-store credit or $25 cash to settle yet another class action suit over the batteries in an earlier edition of the iPod.