An opinion issued by the Eastern District of Pennsylvania on Wednesday has sent plaintiffs APT Systems Inc. and Snapt Games Inc. to the Northern District of California after Judge Edward G. Smith decided against remand and for transfer.
The suit stems from the alleged unauthorized takeover of Snapt’s app by an unknown “thief,” while the app was offered to iOS users in Apple’s App Store. The amended complaint alleges that in 2018, Snapt purchased the “ThemeZone Live Wallpapers” app, which is a subscription-based live wallpaper creation app from a third-party developer for $36,000.
Trouble purportedly arose in early May 2018 when Snapt determined that Apple was not depositing the app’s subscription fees to Snapt’s bank account and was instead sending them to the app’s prior owner. This was despite the fact that Snapt had re-registered itself as the app’s owner following its sale.
Snapt was able to resolve the issue with Apple until January 2019, when Snapt could no longer access its developer account for the app. Snapt said they contacted Apple to remedy the situation, but it was ultimately never resolved despite Snapt’s efforts and engagement of counsel. To date, the plaintiffs have “‘received no satisfaction from Apple regarding [its] repeated requests to address and rectify their loss of [the App] and associated cash subscription fees, as well as the unauthorized appropriation of Snapt’s website to support’” two other apps, the opinion summarized.
Snapt filed suit in Pennsylvania state court against Apple for breach of bailment, conversion, intentional interference of contractual and business relations, and unjust enrichment. In this week’s opinion, the court addressed two pending motions: Apple’s to transfer venue or in the alternative, dismiss the case, and Snapt’s motion to remand to state court.
Taking the second question first, Judge Smith ruled that Snapt had the burden of demonstrating diversity jurisdiction’s amount-in-controversy requirement but did not satisfy it. Looking at the original complaint, the court said it could not determine with “legal certainty” that Snapt could not recover more than $75,000, pointing to the plaintiffs’ statements that they spent $43,000 with respect to purchasing and enhancing the app and their stated wish to obtain all lost subscriber fees from February 2019 to date and damages.
Judge Smith acceded to Apple’s transfer request after finding that the Developer Program License Agreement Snapt signed held a valid and enforceable forum selection clause. Further analysis showed that Snapt had not shown that transfer would be unfair or otherwise impermissible under the federal transfer statute. The court did not reach the dismissal question.
Apple is represented by McDermott Will & Emery LLP and DLA Piper. Snapt is represented by MFI Law Group PLLC, Ace Law LLP, and William W. Uchimoto Law.
