Following Apple's decision to cut $200 off the price of the 8GB iPhone less than three months after it went on sale, a New York Woman has decided to sue the company for $1 million in damages. Dongmei Li is accusing AT&T, Apple and Steve Jobs of price discrimination, discrimination in offering rebates versus credits, unfair and deceptive practices, and underselling.

Apple extended an offer for a $100 credit to anyone who purchased the 8 GB phone at its original price, but Li purchased the two 4GB models for $499 each and thus did not receive any kind of refund or credit. According to the lawsuit she is now unable to resell the phone for the same kind of return as those who bought the iPhone after the price cut. "Since they're selling the 8-gigabite phone for $399, there's really no market for her," Li's lawyer, Jean Wang, said. Interestingly, Li claims Apple is selling its iPhone for "an unreasonably low price" to hurt the competition - the competition apparently being people who buy an iPhone in order to resell it.

The lawsuit also accuses Apple of abandoning the lower-priced 4GB iPhone, locking early buyers into a two-year contract with AT&T, something she calls an unfair business practice.