Strange Lawsuit: A Pattern of Discriminatory Behavior

January 6, 2014

A man who visited the Fourth Street (N. Calif.) Apple retail store for an iPad exchange in 2012 claims he was detained by police, involuntarily committed to a psychiatric hospital and later arrested. Now he’s filed a lawsuit in U.S. District court over the incident, claiming Apple engages in a pattern of discriminatory conduct, and that he has suffered various injuries and emotional distress from the incident. The lawsuit filed December 23, 2013 correctly identifies the plaintiff as “Terell Gray,” although references within the document incorrectly spell his name “Terrell Gray.” The lawsuit is filled with other misspellings, incorrect grammar, factual mistakes and typing irregularities. It was prepared by East Orange (NJ) Municipal Court judge Karimu Hill-Harvey, who also has a private law practice. The lawsuit alleges violations of several U.S. Constitution amendments and U.S. Codes, all with a focus on Apple’s unequal treatment of African-American men in the company’s retail stores. The lawsuit asks for unspecified compensatory and punitive damages, and an injunction against future discriminatory conduct. However, public records and a witness recollection of the Apple store encounter contradict several key points in Gray’s lawsuit.

Gray, 28, says in the 17-page lawsuit that he visited the Berkeley (Calif.) Apple store on December 30, 2012 at about 6 p.m. intending to have his recently-purchased iPad returned or exchanged because of a cracked screen. He had already talked to an AppleCare representative by telephone, and was told to return the iPad at an Apple retail store. However, when he arrived at the Fourth Street store, a staffer agreed only to repair the screen, not replace the iPad itself. During his conversations with the staffer, “Plaintiff was calm and collective (sic),” the lawsuit states.

Gray says the store staff called the Berkeley Police Department, and two Berkeley police officers escorted him out of the store at the request of the staff and then handcuffed him. Gray refused to talk to the officers, who “called an ambulance…where Plaintiff was taken to John George Hospital, were (sic) Plaintiff was later released.” In fact, the John George Psychiatric Hospital is Alameda County’s treatment center for those with psychiatric conditions. Apparently the officers involuntarily committed Gray under state law for up to 72 hours of psychiatric observation and treatment. Gray’s lawsuit doesn’t provide an explanation for why the officers made the commitment.

Gray was released from the facility the next morning (the 31st), and returned to the Apple store, “to explain the circumstances surrounding the return of the computer.” Again, police officers arrived, allegedly in response to a telephone call by the staff. Gray was arrested “on suspicion of having stolen Apple products.” After four days of jail confinement, he was returned to the the county’s psych facility on January 7, 2013. The lawsuit states he was at the facility from January 7th to January 20th, “approximately 45days (sic).”

Upon his release for a second time, he “returned to New Jersey,” where he resides. Gray, “followed up with Physicians in New Jersey and was later committed to the Trenton Psychiatric Hospital for more than three (3) months as a result of the aforementioned treatment by Apple’s employees…including but not limited to the Berkeley Police employees.” Later, the iPad was returned to an unspecified company’s retail store, “and a new one exchanged without incident,” the lawsuit says.

Gray’s lawsuit claims, “People of color are targeted to be followed by plain-clothes detectives and to be observed by closed circuit TV as they move throughout Apple stores.” Furthermore, this conduct is part of a “pattern and practice of racially profiling its AfricanAmerican/ Black, and other non-White shoppers as suspected criminals.”

Gray claims in the lawsuit that store security personnel “commonly and disproportionately” target and follow people of color for suspicion of shoplifting, credit card fraud, and other acts of larceny/theft.” As a result, security personnel, “disproportionately subject those shoppers to false accusations of unlawful activity, wrongful detentions, unjustified body and property searches, false imprisonment, wrongful confiscation of property and other harassment on the basis of their race, national origin, ethnicity and/or color.”

As a result of the defendants’ conduct, “Plaintiff suffered severe emotional distress, pain and suffering, fear, anxiety, embarrassment, discomfort and humiliation,” the lawsuit states.

The lawsuit cost $400 to file with the Federal District Court of New Jersey. As for Judge Hill-Harvey filing the suit, in New Jersey it’s legal for sitting court judges to conduct a private legal practice. In California and many other states, a judge’s license to practice law is suspended while he/she is employed as a judge. In some states judges may only practice within certain areas of the law, or only on cases that don’t present a potential for conflict of interest. Hill-Harvey is not a frequent filer of federal lawsuits—only six lawsuits over the last 13 years.

Besides Apple, the lawsuit also names as defendants the Berkeley Police Department and a police officer, and two Apple store managers. Apple has not yet filed an answer to the lawsuit with the court.

Another Story

Gray’s lawsuit is very detailed, but public records and a witness to the Apple store encounter contradict several points of his account.

First, Gray was indeed inside the Fourth Street store, but public arrest records say it was at about 2 p.m. on January 1, 2013. There is no record of police responding to the Apple store on December 30th or 31st. However, a witness does say the Apple store staff was familiar with Gray from a previous visit when he created a disturbance over the return or exchange of a damaged product.

The witness states that Gray presented a MacBook to the store’s staff with a broken screen, claiming it was newly purchased. Gray also had an iPad, but it was not the subject of his repair request. Gray presented several purchase receipts from another retailer, one of which seemed to match the MacBook by the listed price. The receipt was dated a few days earlier, but oddly, the laptop appeared to have more wear than a product that was just a few days old, the witness recalls.

When the store staff checked company records, they learned the laptop was covered by AppleCare, but registered in another person’s name. That person had a phone number with an area code in the New Jersey area, the witness recalls, the same region where the lawsuit says that Gray resides. Believing the MacBook might have been stolen, and with Gray becoming “disruptive” over his treatment, the witness says the staff did call the police department, and an officer soon arrived.

The witness confirms Gray’s account that he refused to speak to the officer, identify himself, or answer any questions about the MacBook. Public arrest records indicate Gray was arrested for an outstanding criminal warrant, and for obstructing the officer’s investigation into the ownership of the MacBook. He was booked into jail as “Terrell Colen Gray.” Again, Gray has signed court documents with “Terell Gray.”

It’s not known if the police contacted the registered owner of the MacBook using information provided by the store employees, to determine if the laptop had been lost or stolen. From the alternate account of the incident, it appears both Gray and the registered AppleCare purchaser are from the New Jersey area. However, the claimed receipt for the MacBook was from a retailer in the Berkeley area. It’s not clear how the two jurisdictions are linked in this situation.

Official records about psychiatric committals are not public in California. Therefore, it’s impossible to verify Gray’s claims that police involuntarily committed him to the county’s facility for evaluation on any of the dates that are mentioned in the lawsuit, or if he had previous visits to the facility.

Criminal Methods

A common criminal scheme is to steal or otherwise obtain major Apple products, and to “launder” them, disposing of a product with a serial number listed as stolen in police department computers for a new product with an unlisted serial number. The scheme takes advantage of Apple’s liberal product exchange policy, which usually does not involve providing any proof of ownership, or even any type of customer identification. Genius Bar personnel simply verify the product is damaged or non-working, and offer a refurbished product in exchange. The policy has been criticized previously by crime victims who have had their Apple products stolen. However, Apple has not established any formal Genius Bar policies to help prevent criminals from obtaining an exchange for stolen products.

A key element of the fraud is that the criminal doesn’t want the product repaired, since it would still bear the stolen serial number. It’s essential that the entire product be replaced with a different device, with a different serial number. Only Apple retail stores, and not resellers, offer such a no-questions product exchange.

The return scheme is enhanced by another deception: the presentation of a purchase receipt from an authorized Apple retailer, such as Best Buy, that appears to verify the criminal’s ownership of the product being offered for exchange. The receipt shows a purchase description and amount that is the same as the offered product. However, unlike receipts from an Apple retail store, the reseller receipts don’t have the serial number of the product that was purchased. Therefore, it’s impossible to tell if the receipt is for the specific product being presented. Often these receipts are obtained from trash cans after a buyer discards it, or by paying a buyer to hand over the receipt. They can also be obtained—for a price—from accomplice employees of the reseller, or even completely forged.

A 2013 survey by the National Retail Federation found that return fraud could have totaled $8.9 billion for the year. The return of stolen merchandise is the most commonly encountered fraud, followed by employee-assisted returns and the return of merchandise that was purchased with fraudulent credit cards or other forms of payment.

Significantly, the survey also showed that 74 percent of the retailers require ID when a customer has no receipt, thereby explaining the common use of stolen, forged or fraudulent receipts. Another 12 percent of stores require some ID for returns, and 26 percent of the surveyed retailers require no ID.

So far, Gray has not been charged by the county district attorney with any crimes related to his visits to the Apple store.

Download (pdf) the entire original lawsuit filing for many more details.


Updates: On March 11, 2014 Gray’s attorney filed an amended complaint (pdf) with the court, clearing up several of the date discrepancies mentioned in the above story—perhaps as the result of reading the story. The amended complaint also adds a claim that Gray was, “subjected to the use of a Taser gun,” but does not specify which agency used it against him. Berkeley police officers are not equipped with Tasers.

On January 24, 2014 Gray’s attorney issued a subpoena request to retailer Target, asking them to maintain video surveillance tapes and other records for a a New Jersey store, and for a specific period of January 12, 2014. The subpoena request did not explain how that Target store in New Jersey might be related to the California Apple store lawsuit. Within days a likely-confused Target attorney filed a request with the court to quash, or deny, the subpoena request.

On March 11, 2014 Gray’s attorney submitted a response to Target’s request to quash. In the response, Gray’s attorney revealed that her client was in the Manalapan (NJ) Target store, and the police were called about his behavior. Officers escorted him out of the store, arrested him, and then he was “involuntarily confined to a mental institution.” The original lawsuit complaint had made mention of the incident, but provided no details.

In May 2014 Apple’s attorneys filed a motion (pdf) to dismiss the lawsuit, or at least to have it moved to the Northern California District Court.

In May 2014 Apple’s attorneys filed a second motion (pdf) to dismiss the plaintiff’s amended complaint.

On May 22 and 27, 2014 Gray’s attorney and Gray himself filed documents with the court regarding the plaintiff’s attorney. First, Gray asked to change attorneys, to represent himself. In a second filing, Gray’s attorney Karimu Hill-Harvey said she was retiring and was handing off clients to other attorneys. The two requested, and the court approved, to delay the case until September 2014.

Through mid-2015 the court attempted to set meetings between the two parties, but was unable to contact Gray. In Dec. 2014 the court entertained motions by Apple to dismiss the lawsuit. The court sent a letter to Gray’s last address stating his action would be dismissed if he didn’t take action When the court’s letter was returned “unclaimed” on January 1, 2015, the court dismissed Gray’s lawsuit.

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