Apple Inc. escaped a proposed class action brought over a fraudulent cryptocurrency wallet app that was available for download on its App Store, after a federal judge in San Francisco ruled the tech company’s platform is shielded by Section 230 of the Communications Decency Act.
Hadona Diep sued Apple in Maryland federal court in September, accusing the company of hosting “Toast Plus,” a fraudulent mobile application for a crypto wallet that had a similar name and similar or identical logo to its legitimate counterpart. When Diep checked its status, she found that the lookalike app had deleted her account, and that she’d lost her deposited crypto funds.
Diep alleges she sustained more than $5,000 in damages as a result of Apple hosting the fraudulent app. Her co-plaintiff Ryumei Nagao claims that he lost $500,000. The suit was transferred in December to the Northern District of California.
Judge Phyllis J. Hamilton of the US District Court for the Northern District of California agreed with Apple that it can’t be held liable for the fake app under Section 230 of the act, because it is considered a publisher of the content, not a creator.
Apple qualifies as an interactive computer service provider and published information provided by another content provider, meeting all the requirements to be immune under Section 230, Hamilton said in her Sept. 2 ruling.
The judge also agreed with Apple that Diep didn’t successfully plead claims under both California and Maryland’s Consumer Privacy Acts because she didn’t allege specific details of the time, place, and content of the alleged false representations.
Diep’s claims also must be dismissed because under its Terms and Conditions, the company is not liable for damages arising out of or related to the use of third-party apps, Hamilton said.
Diep and Nagao are represented by Adelphi Law, Edward Nelson Griffin of Silver Spring, MD, and Conn Law PC. Apple is represented by DLA Piper LLP.
The case is Diep v. Apple Inc., N.D. Cal., No. 4:21-cv-10063, 9/2/22.
