## Facts

- Apple manufactured and sold the iPhone 3G, which operated on AT&T Mobility LLC’s cellular network.
- Apple advertised the iPhone 3G as “twice as fast” as the prior iPhone model.
- Ingrid Van Zant filed a putative consumer class action against Apple in California state court alleging the iPhone 3G did not perform as advertised due to internal hardware and software defects.
- The complaint expressly alleged the performance problems were not caused by the carrier’s network and sought no relief from AT&T Mobility LLC.
- Claims included violations of the Unfair Competition Law and False Advertising Law, breach of express warranty, Song–Beverly Consumer Warranty Act violations, negligence, negligent misrepresentation, and unjust enrichment.
- Similar iPhone 3G consumer litigation against Apple and AT&T Mobility LLC had proceeded in a federal multidistrict litigation in which arbitration was compelled under carrier customer agreements.

## Issues

1. Whether, under Cal. Civ. Proc. Code § 389(a), AT&T Mobility LLC was a necessary party to a consumer action against Apple alleging only internal defects and Apple’s own marketing misconduct.
2. Whether proceeding without the carrier would prevent complete relief between the existing parties, impair the carrier’s interests, or subject Apple to a substantial risk of double, multiple, or otherwise inconsistent obligations.

## Decision

- The Court of Appeal reversed the dismissal.
- AT&T Mobility LLC was not a necessary party under § 389(a) on the pleaded theory that internal device defects alone caused the alleged performance failures.
- Complete relief between Van Zant and Apple could be afforded without the carrier because the claims sought relief only from Apple for Apple’s advertising and product-related conduct.
- The asserted risk that related federal MDL proceedings or arbitrations could create inconsistent obligations for Apple was speculative on the record and, in any event, distinct from the statutory concept of “inconsistent obligations.”
- The carrier’s ability to protect any legally cognizable interest was not practically impaired because the complaint disclaimed network-based theories and did not seek relief against the carrier.
- The matter was remanded for further proceedings against Apple.

## Legal Principles

- A party is “necessary” under Cal. Civ. Proc. Code § 389(a) only if (1) complete relief cannot be accorded among existing parties in the party’s absence, or (2) the absentee claims an interest that may be practically impaired, or existing parties face a substantial risk of double, multiple, or otherwise inconsistent obligations.
- Necessary-party analysis is driven by the plaintiff’s pleaded theory of liability and the concrete risks shown by the record, not by a nonparty’s factual connection to the dispute.
- The possibility of inconsistent rulings or factual determinations in separate proceedings is not, by itself, the “inconsistent obligations” risk addressed by § 389(a).
- Related litigation, including federal MDL proceedings involving additional entities, does not alone make a nonparty necessary in a state action where the claims are limited to the defendant’s own conduct and relief can be awarded between the parties present.

## Conclusion

The appellate court held that a smartphone carrier was not a necessary party to a consumer suit against the manufacturer where the complaint alleged only internal device defects and misrepresentations by the manufacturer, and it reversed the trial court’s dismissal for failure to join the carrier under § 389(a).


Van Zant v. Apple, Inc., 229 Cal. App. 4th 965, 177 Cal. Rptr. 3d 805 (Cal. Ct. App. 2014)