pro hac vice - Class Action Lawsuits | Class Action ... · D. Plaintiffs’ Consumer Fraud And...
Transcript of pro hac vice - Class Action Lawsuits | Class Action ... · D. Plaintiffs’ Consumer Fraud And...
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Rowena Santos CSB [email protected] COBURN LLP2029 Century Park East, 19th FloorLos Angeles, California 90067Tel: 310.282.2500 / Fax: 310.282.2501
Kathy A. Wisniewski (pro hac vice motion pending)[email protected] W. Rogers (pro hac vice motion pending)[email protected] COBURN LLPOne U.S. Bank PlazaSt. Louis, Missouri 63101Tel: 314.552.6000 / Fax: 314.552.7000
Attorneys for DefendantCHRYSLER GROUP LLC
UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
EASTERN DIVISION
SHAUN SATER; MICHAEL BRIGHT;THOMAS DERRICK; SCOTTJOHNSON; MATTHEW CUCULLU;individuals on behalf of themselves andall others similarly situated,
Plaintiffs,
v.
CHRYSLER GROUP LLC, a Delawarelimited liability company; and DOES 1-100, inclusive,
Defendants.
CASE NO. 5:14-cv-00700-VAP-DTB
Assigned to the HonorableVirginia A. Phillips
CHRYSLER GROUP LLC’S NOTICEOF MOTION ANDMOTION TODISMISS THE SECOND AMENDEDCOMPLAINT; ANDMEMORANDUMOF POINTS AND AUTHORITIES INSUPPORT OF MOTION TO DISMISS
DATE: January 26, 2015TIME: 2:00 p.m.COURTROOM: 2
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 1 of 35 Page ID #:1492
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
281
CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISSTHE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
TO ALL PARTIES AND THEIR COUNSEL OF RECORD:PLEASE TAKE NOTICE that, on January 26, 2015,1 at 2:00 p.m. in
Courtroom 2, of the United States District Court for the Central District of California,
Eastern Division located at 3470 Twelfth Street, Riverside, California, Defendant
Chrysler Group LLC will move under Federal Rule of Civil Procedure 12(b)(6) for an
Order dismissing Plaintiffs’ Second Amended Complaint.
The motion will be made on the grounds that the Second Amended Complaint
fails to state a claim upon which relief can be granted because: (1) Plaintiffs’ express
warranty claims fail because Chrysler Group never promised that their vehicles were
free from defects; (2) Plaintiffs’ express warranty claims fail because no Plaintiff alleges
that he sought a repair within the time-mileage durational limits of the express written
warranty; (3) Plaintiffs’ express warranty claims fail because the express written
warranty does not cover design defects; (4) Plaintiffs’ claims based on an oral express
warranty fail because the written warranty expressly excludes any such warranties;
(5) Plaintiffs’ claims based on an oral express warranty fail because they do not allege
sufficient facts showing the terms of the warranty or that such a warranty was conveyed
to them; (6) Plaintiffs’ claims based on an oral express warranty fail because any
representations they identify are non-actionable puffery; (7) Plaintiffs’ implied warranty
claims fail because Chrysler Group limited any implied warranties to the duration of the
express warranty and Plaintiffs’ vehicles performed without incident throughout the
duration of the express warranty; (8) Plaintiffs’ alleged violations of the Song-Beverly
Consumer Warranty Act fail because their claims fall outside the Act’s durational time
1The parties previously filed a stipulation where the hearing on this motion todismiss would be set for hearing on January 19, 2015 (Doc. No. 62), and the Courtentered an Order approving the parties’ stipulation (Doc. No. 63). January 19, 2015,however, is a “Legal Holiday” (i.e., Martin Luther King Jr.’s Birthday). SeeFed.R.Civ.P. 6(a)(6). Under this Court’s Standing Order, “[a]ny motion noticed for aholiday shall automatically be set to the next Monday without further notice to theparties.” See Doc. No. 12, ¶ 4. Accordingly, Chrysler Group has noticed this motionfor Monday, January 26, 2015.
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 2 of 35 Page ID #:1493
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
282
CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISSTHE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
limitations; (9) Plaintiffs Sater’s and Bright’s implied warranty claims fail because they
are not in privity with Chrysler Group; (10) Sater’s implied warranty claim is barred by
the statute of limitations; (11) Plaintiffs’ implied warranty claims fail because they admit
they drove their trucks for an extended period of time and for tens of thousands of miles
without incident; (12) Plaintiffs’ alleged violations of the Magnuson-Moss Warranty Act
fail for the same reasons that their state law express and implied warranty claims fail;
(13) Plaintiffs’ consumer fraud and negligent misrepresentation claims do not comply
with Rule 9(b); (14) Plaintiffs’ negligent claims are barred by the economic loss rule;
and (15) Plaintiffs’ unjust enrichment claims fail because unjust enrichment is not an
independent cause of action; (16) Plaintiffs’ unjust enrichment claims fail because unjust
enrichment is not an available remedy when a contract governs the subject matter of the
dispute; and (17) Plaintiffs’ unjust enrichment claims fail because there is an adequate
remedy at law.
The motion will be based upon this Notice of Motion and Motion to Dismiss the
Second Amended Complaint, Chrysler Group LLC’s Memorandum of Points and
Authorities in Support of Motion to Dismiss, the pleadings and record in this case, and
any additional evidence and arguments that may be presented at the hearing.
This motion is made following the conference of counsel pursuant to L.R. 7-3
which began on October 10, 2014, and continued thereafter.
DATED: November 13, 2014 Respectfully submitted,
THOMPSON COBURN LLP
By: /s/ Rowena SantosKATHY A. WISNIEWSKIJOHN W. ROGERSROWENA SANTOSAttorneys for Defendant CHRYSLER GROUP LLC
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 3 of 35 Page ID #:1494
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28i
CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISSTHE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
TABLE OF CONTENTSPage
I. INTRODUCTION........................................................................................1
II. ALLEGED FACTS ......................................................................................2
A. Plaintiffs’ Allegations Of Defect ........................................................2
B. Recalls Of Ram Trucks To Address The Tie Rod Defect....................2
C. Plaintiffs’ Alleged Vehicle Purchases And Tie Rod Repairs...............4
D. The Express Limited Warranties That Accompanied Plaintiffs’Vehicles..............................................................................................6
E. Plaintiffs’ Claims, Proposed Class, And Requested Relief..................6
III. ARGUMENT ...............................................................................................7
A. The Law Governing Motions To Dismiss Under Rules 12(b)(6)And 9(b) .............................................................................................7
B. Plaintiffs’ Warranty Claims Fail (Counts I-III) ...................................8
1. Plaintiffs’ Express Warranty Claims Fail For MultipleReasons .................................................................................... 8
2. Plaintiffs’ Implied Warranty Claims Fail For MultipleReasons .................................................................................. 13
3. Plaintiffs’ Alleged Violations Of The MMWA Fall WithTheir Claims For Breach Of Express and ImpliedWarranties .............................................................................. 16
C. Plaintiffs’ Implied Warranty of Merchantability Claim Under TheSong-Beverly Consumer Warranty Act Claim Also Fails .................17
D. Plaintiffs’ Consumer Fraud And Negligent MisrepresentationClaims Do Not Satisfy Rule 9(b) (Counts V, VI, IX, and X) ............18
E. Plaintiffs’ Negligence Claims Are Barred By The Economic LossRule (Counts VII-IX)........................................................................21
F. Plaintiffs’ Unjust Enrichment Claims Fail (Count XI) ......................23
IV. CONCLUSION ..........................................................................................25
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 4 of 35 Page ID #:1495
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28ii
CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISSTHE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
TABLE OF AUTHORITIES
Page(s)
Cases
Aas v. Superior Court, 24 Cal.4th 627 (2000).......................................................... 22
Agricola Baja Best, S. De. R.L. de C.V. v. Harris Moran Seed Co., 2014WL 4385450 (S.D.Cal. 2014) ............................................................................. 23
Akwright-Boston Mfg. v. Westinghouse Electric Corp., 844 F.2d 1174(5th Cir. 1988) .................................................................................................... 11
Alban v. BMW of North America, LLC, 2010 WL 3636253 (D.N.J.2010) .................................................................................................................. 10
American Suzuki Motor Corp. v. Superior Court, 37 Cal.App.4th 1291(1995) ................................................................................................................. 15
Anunziato v. eMachines, Inc., 402 F.Supp.2d 1133 (C.D.Cal. 2005) ....................... 19
Ashcroft v. Iqbal, 556 U.S. 662 (2009) .................................................................7, 11
Bailey v. O’Donnell, 980 F.2d 1445 (5th Cir. 1992) ................................................ 25
Bell Atlantic v. Twombly, 550 U.S. 544 (2007)......................................................... 7
Berenblat v. Apple, Inc., 2010 WL 1460297 (N.D.Cal. 2010) ............................12, 21
Blanco v Baxter Healthcare Corp, 158 Cal.App.4th 1039 (2008)............................. 14
California Med. Ass’n, Inc. v. Aetna U.S. Healthcare of California, Inc.,94 Cal.App.4th 151 (2001) ................................................................................. 23
City of Corpus Christi v. Heldenfels Brothers, Inc., 802 S.W.2d 35(Tex.App. 1990) ................................................................................................. 23
Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008) ........10, 14, 16, 21
Coastal Conduit & Ditching, Inc. v. Noram Energy Corp., 29 S.W.3d282 (Tex.App. 2000)........................................................................................... 22
Cosman v. Ford Motor Co., 674 N.E.2d 61 (Ill.App. 1996) ....................................... 9
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 5 of 35 Page ID #:1496
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28iii
CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISSTHE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Crouch v. General Electric Co., 699 F.Supp. 585 (S.D. Miss. 1988).......................... 9
D.S.A. Inc. v. Hillsboro Indep. Sch. Dist., 973 S.W.2d 662 (Tex. 1998).................. 22
Daugherty v. Am. Honda Motor Corp., 144 Cal.App.4th 824 (1999)..................10, 24
Daugherty v. Sony Elecs., Inc., 2006 WL 197090 (Tenn.App. 2006)....................... 24
Davis v. Louisiana-Pacific Corp., 2008 WL 2030495 (Cal.App. 2008).................... 12
Deburro v. Apple, Inc., 2013 WL 5917665 (W.D.Tex. 2013) .......................13, 15, 16
Deveny v. Entropin, Inc., 139 Cal.App.4th 408 (Cal.App. 2006) ............................... 3
Duquesne Light Co. v. Westinghouse Electric Corp., 66 F.3d 604 (3dCir. 1995) ........................................................................................................... 10
Eisen v. Porches Cars N. Am., Inc., 2012 WL 841019 (C.D.Cal. 2012)..............20, 21
Equistar Chems., L.P. v. Dresser-Rand Co., 240 S.W.3d 864 (Tex. 2007) ............... 22
Erickson v. Boston Scientific Corp., 846 F.Supp.2d 1085 (C.D.Cal.2011) .................................................................................................................. 21
First Union Nat. Bank v. Richmont Capital Partners I, L.P., 168 S.W.3d917 (Tex.App. 2005)........................................................................................... 24
Fortune Production Co. v. Conoco, Inc., 52 S.W.3d 671 (Tex. 2000) ...................... 24
Frith v. Guardian Life Ins. Co. of America, 9 F.Supp.2d 734 (S.D.Tex.1998) .................................................................................................................. 19
Garcia v. Sony Computer Enter. Am., LLC, 2012 WL 1610615(N.D.Cal. 2012) .................................................................................................. 19
General Motors Corp. v. Brewer, 966 S.W.2d 56 (Tex. 1998) ................................. 15
Gertz v. Toyota Motor Corp., 2011 WL 3681647 (C.D.Cal. 2011) .......................... 11
Glass v. BMW North Am., LLC, 2011 WL 6887721 (D.N.J. 2011) ........................ 16
Grodzitsky v. American Honda Motor Co., Inc., 2013 WL 2631326 ....................... 18
Horvath v. LG Electronics Mobilecomm U.S.A., Inc., 2012 WL2861160 (S.D.Cal. 2012) .................................................................................... 11
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 6 of 35 Page ID #:1497
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28iv
CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISSTHE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Hovsepian v. Apple, Inc., 2009 WL 2591445 (N.D.Cal. 2009)................................ 13
In re Ford Tailgate Litig., 2014 WL 1007066 (N.D.Cal. 2014) ................................ 25
In re General Motors Corp. “Piston Slap” Products Liab. Litig., 385F.Supp.2d 1172 (W.D.Okla. 2005) ..................................................................... 24
In re Google Phone Litig., 2012 WL 3155571 (N.D.Cal. 2012) ............................... 18
In re Parkcentral Global Litigation, 884 F.Supp.2d 464 (N.D.Tex. 2012) ................ 25
In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection HD TVTelevision Litig., 758 F.Supp.2d 1077 (S.D.Cal. 2010) .................................17, 19
Jimenez v. Superior Court, 29 Cal.4th 473 (2002) ................................................... 22
Jogani v. Superior Court, 165 Cal.App.4th 901 (2008) ............................................ 23
Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) ........................8, 18, 19, 20
Kent v. Hewlett-Packard Co., 2010 WL 2681767 (N.D.Cal. 2010).......................... 21
Klein v. Chevron U.S.A., Inc., 202 Cal.App.4th 1342 (2012) .................................. 23
Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir. 2001) ......................................... 3
Licul v. Volkswagen Group of America, Inc., 2013 WL 6328734(S.D.Fla. 2013) ..............................................................................................10, 11
MacDonald v. Ford Motor Co., 2014 WL 1340339 (N.D. Cal. 2014) ...................... 15
Mack Trucks Inc. v. BorgWarner Turbo Systems, Inc., 2012 WL6643996 (3d Cir. 2012)....................................................................................... 11
Marchante v. Sony Corp. of America, Inc., 801 F.Supp.2d 1013(S.D.Cal. 2011)................................................................................................... 17
McKesson HBOC, Inc. v. New York State Common Retirement Fund,Inc., 339 F.3d 1087 (9th Cir. 2003)..................................................................... 24
Melchior v. New Line Productions, Inc., 106 Cal.App.4th 779 (Cal.App.2003) .................................................................................................................. 23
Memorial Hermann Healthcare Sys., Inc., 524 F.3d 676 (5th Cir. 2008).................. 22
Mexia v. Rinker Boat Co., 174 Cal.App.4th 1297 (2009) ........................................ 18
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 7 of 35 Page ID #:1498
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28v
CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISSTHE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Moulton v. LG Electronics USA, Inc., 2012 WL 3598760 (D.N.J. 2012) ................ 24
Mowbray v. Avery, 76 S.W.3d 663 (Tex.App. 2002) .............................................. 23
Murray v. Ford Motor Co., 97 S.W.3d 888 (Tex.App. 2003) ................................... 22
Muss v. Mercedes-Benz of North America, Inc., 734 S.W.2d 155(Tex.App. 1987) ................................................................................................... 9
Mydlach v. DaimlerChrysler Corp., 875 N.E.2d 1047 (Ill. 2007)............................... 9
National Union Fire Insurance Co. of Pittsburgh v. Dassault Falcon JetCorp., 263 Fed.Appx 604, 2008 WL 122150 (9th Cir. 2008) .............................. 15
Neilson v. Union Bank of California, N.A., 290 F.Supp.2d 1101(C.D.Cal. 2003) .................................................................................................. 19
Oestreicher v. Alienware Corp., 544 F.Supp.2d 964 (N.D.Cal. 2008),aff’d 322 Fed. Appx. 489 (9th Cir. 2009)............................................................ 19
Osborne v. Subaru of America, Inc., 198 Cal.App.3d 646 (1988) ............................ 13
Overton v. Bird Brain, Inc., 2012 WL 909295 (C.D.Cal. 2012) ............................... 25
Oxford Fin. Co., Inc. v. Velez, 807 S.W.2d 460 (Tex.App. 1991) ........................... 23
Priebe v. Autobarn, Ltd., 240 F.3d 584 (7th Cir. 2001)............................................ 16
Rice v. Sunbeam Products, Inc., 2013 WL 146270 (C.D. Cal. 2013) ....................... 12
Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal.4th 979 (2004)....................... 22
Seifi v. Mercedes-Benz USA, LLC, 2013 WL 2285339 (N.D. Cal. 2013) ............... 15
Sharma v. BMW of North America, LLC, 2014 WL 2795512 (N.D. Cal.2014) .................................................................................................................. 22
Sheris v. Nissan North America Inc., 2008 WL 2354908 (D.N.J. 2008) .................. 16
Smith v. Ford Motor Co., 462 Fed.Appx. 660, 2011 WL 6322200 (9thCir. 2011) ........................................................................................................... 11
Smith v. LG Electronics U.S.A., Inc., 2014 WL 989742 (N.D. Cal.2014) .................................................................................................................. 13
Soares v. Lorono, 2014 WL 723645 (N.D.Cal. 2014) .............................................. 14
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 8 of 35 Page ID #:1499
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28vi
CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISSTHE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Suddreth v. Mercedes-Benz, LLC, 2011 WL 5240965 (D.N.J. 2011) ...................... 16
Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 2014 WL 211462(C.D.Cal. 2014) .................................................................................................. 15
Tait v. BSH Home Appliances Corp., 2011 WL 1832941 (C.D.Cal.2011)................................................................................................................11, 21, 24
Tasion Comm., Inc. v. Ubiquiti Networks, Inc., 2013 WL 4530470(N.D.Cal. 2013) .................................................................................................. 22
Texas Carpenters Health Ben. Fund v. Philip Morris, Inc., 21 F.Supp.2d664 (E.D.Tex. 1998) ........................................................................................... 25
Tietsworth v. Sears, 720 F.Supp.2d 1123............................................................17, 20
Vess v. Ciba-Geigy Corp., USA, 317 F.3d 1097 (9th Cir. 2003)................................ 8
Voelker v. Porsche Cars North America, Inc., 353 F.3d 516 (7th Cir.2003) .................................................................................................................. 12
Ward v. Ipex, Inc., 2009 WL 2634842 (C.D.Cal. 2009)........................................... 14
Xavier v. Philip Morris USA Inc., 787 F.Supp.2d 1075 (N.D. Cal. 2011)................ 14
Statutes and Constitutional Provisions
15 U.S.C. § 2301 . ..................................................................................................... 6
Business and Professions Code § 17200 . .................................................................. 6
Cal. Civ. Code § 1750 ............................................................................................... 6
Cal. Civ. Code § 1791...........................................................................................6, 17
Cal. Com. Code § 2725............................................................................................ 15
Tex. Bus. & Com. Code § 17.46 ............................................................................6, 7
Rules
Federal Rule of Civil Procedure 9(b) .................................................................passim
Federal Rule of Civil Procedure 12(b)(6)................................................................... 7
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 9 of 35 Page ID #:1500
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 1CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTION
Plaintiffs Shaun Sater, Michael Bright, Thomas Derrick, Scott Johnson, and
Matthew Cucullu filed this purported nationwide class action lawsuit alleging that
certain model year Dodge Ram trucks have defective steering linkage systems.
Chrysler Group moved to dismiss Plaintiffs’ Complaint based on numerous legal and
pleading deficiencies. See Doc. No. 17. Rather than respond to Chrysler Group’s
motion to dismiss, Plaintiffs filed a First Amended Complaint. See Docc. No. 25.
Numerous legal and pleading deficiencies persisted and Chrysler Group moved to
dismiss the amended complaint. See Doc. No. 27. Plaintiffs were permitted to file a
Second Amended Complaint (“SAC”) in which they added Matthew Cucullu as a
named plaintiff, a claim for alleged violations of the Song-Beverly Consumer Warranty
Act, and an expanded class definition,2 among other changes. See Doc. No. 61.
Chrysler Group’s instant motion to dismiss is directed at the SAC and the
deficiencies that still remain. By way of example, Plaintiffs again plead: express
warranty claims where they had no problems with their vehicle during the time-mileage
durational limits of the warranty and where the written warranty does not cover alleged
design defects; implied warranty claims that are barred by the statute of limitations and
a lack of privity; negligence claims that are barred by the economic loss doctrine; fraud-
based claims premised on affirmative misrepresentations without identifying what
representations were made, who made them, when they were made, or any facts
showing reliance; and unjust enrichment claims even though unjust enrichment is not an
2In their SAC, Plaintiffs plead an expanded class that includes purchasers andlessees of certain model-year 2004-2012 Ram trucks. See SAC, ¶ 131. Plaintiffs, inorder to avoid a contemplated motion by Chrysler Group to transfer the case to thebankruptcy court, previously stipulated “that the only claims they are pursing, and thatthey will pursue, against Chrysler Group in this case concern motor vehiclesmanufactured and sold on or after June 10, 2009,” except for claims for breach ofexpress warranty and violations of state “lemon laws.” See Doc. No. 16; SAC, fn. 103.To the extent that Plaintiffs are trying to circumvent their prior stipulation by way of theSAC, Chrysler Group reserves its right to seek transfer of this case to the bankruptcycourt.
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 10 of 35 Page ID #:1501
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 2CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
independent cause of action, a contract governs the subject matter of the dispute, and
there is an adequate remedy at law. For these and other reasons, the SAC should be
dismissed.
II. ALLEGED FACTS
A. Plaintiffs’ Allegations Of Defect.
Plaintiffs allege that certain model year 2004-2012 Dodge Ram
1500/2500/3500/4500/5500 trucks suffer from defects in their “steering linkage
systems,” which includes “the fracturing of their tie rods and draglink inner joint and
loosening of the steering damper bracket.” See SAC, fn. 2. Plaintiffs claim that a
“faulty or misaligned” tie rod can lead to “a loss of steering control” (id. at ¶ 26) and
that loose tie rods “can cause a vehicle to have excessive shimmy, or even worse, a
‘death wobble’, which is an extreme and sometimes uncontrollable front end vibration”
(id. at ¶ 27). Plaintiffs also claim that “a defective tie rod will also affect front end
alignment and could break, causing a vehicle to lose steering and veer suddenly off the
road or into opposing traffic.” Id.
B. Recalls Of Ram Trucks To Address The Tie Rod Defect.
Plaintiffs allege that Chrysler Group has issued seven separate recalls (Recalls
H36, H46, K28, L16, N49, N62, and N63) of certain Ram trucks to address “various
parts of the Vehicles’ steering linkage system, including its tie rod assemblies, along
with replacement parts.” See SAC ¶¶ 56-57. Only two of these recalls (L16 and N49),
however, involved the vehicles Plaintiffs actually own (or owned). Id. at ¶¶ 4-9, 60, 65,
69, 80-82.
Chrysler Group issued Recall L16 in September 2011. Id. at ¶ 71. Recall L16
involved model year 2008-2011 Ram 2500/3500 trucks. Id. at ¶ 72; SAC Ex. 3.
Chrysler Group advised owners of these vehicles that the left tie rod ball stud could
fracture under certain driving conditions. SAC Ex. 3, p. 15. Chrysler Group further
advised these owners that it would inspect their vehicles and replace the left tie rod free
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 11 of 35 Page ID #:1502
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 3CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
of charge, if necessary. Id. Finally, Chrysler Group advised these owners that if they
had already paid to repair the condition they would be reimbursed those repair costs
upon submission of proof of payment. Id. Plaintiffs do not allege whether Recall L16
was performed on their vehicles, but Chrysler Group’s records show that the remedy
provided by Recall L16 was completed on each of their vehicles.3
In December 2013, Chrysler Group issued Recall N49 for model years 2008-
2012 Ram 1500/2500/3500 trucks. Id. at ¶ 20; SAC Ex. 4; Doc. No. 1-4. The recall
notified owners that the left tie rod ball stud on their truck may fracture under certain
driving conditions. Id. Chrysler Group notified owners that it would inspect the
steering linkage system of their truck and replace it free of charge, if necessary. Id.
Chrysler Group advised owners to contact their dealer starting January 6, 2014, to
schedule an appointment to have the recall performed on their vehicle. Id. Finally,
Chrysler Group advised owners that if they had already paid to repair the condition they
would be reimbursed those costs upon submission of proof of payment. Id.
Each of the named Plaintiffs received notice of Recall N49 in December 2013.
See Doc. No. 1, ¶¶ 36-39.4 On March 7, 2014, Chrysler Group notified its authorized
dealerships that it was investigating a concern regarding difficulty of installing the part,
and that it was in the process of recertifying new parts for the recall. See Doc. No. 25,
¶ 24; Doc. No. 25-5. Chrysler Group advised authorized dealerships that the recertified
parts will begin to be available the week of April 14, 2014. Id.
3 The remedy provided by Recall L16 was provided to Plaintiff Cucullu by wayof Recall N49, which superseded Recall L16. See SAC ¶¶ 9, 77, 79 & SAC Exs. 4-6.
4 In the original Complaint, each of the Plaintiffs specifically alleged that theyreceived notice of Recall N49. See Doc. No. 1, ¶¶ 36-39. In the SAC, Plaintiffs Bright,Derrick, and Johnson delete the allegations of receiving notice of Recall N49.Regardless, this Court can consider Plaintiffs’ admissions in their original complaint.See, e.g., Lee v. City of Los Angeles, 250 F.3d 668, 682 (9th Cir. 2001) (consideringallegations of plaintiffs’ original and first amended complaints in review of a 12(b)(6)motion); Deveny v. Entropin, Inc., 139 Cal.App.4th 408, 425-26 (Cal.App. 2006)(“superseded pleadings may be used at trial as admissions against interest”).
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 12 of 35 Page ID #:1503
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 4CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
C. Plaintiffs’ Alleged Vehicle Purchases And Tie Rod Repairs.
Shaun Sater — In January 2010, Plaintiff Sater purchased a model year 2009
Dodge Ram 2500 from Frahm Dodge in Norco, California. See SAC, ¶ 4. Sater admits
that he received notice of Recall N49 “in or about December 2013.” Id. Sater alleges
that he called his dealership in December 2013 to schedule an appointment for the recall
repair and “was told the parts were ordered and the dealer would call when they
arrived.” Id. Two months later, Sater called the dealer and “was told that the parts still
had not arrived.” Id. Sater alleges that in March 2014, his vehicle’s left tie rod broke
while driving and that the wheels went in the opposite direction. Id. He claims that he
paid over $1,000 to repair the vehicle. Id. Sater admits that, as part of Recall N49,
Chrysler Group offered to reimburse any owner that had paid to repair their vehicles’ tie
rods (see Doc. No. 25-4) but he does not allege that he sought reimbursement of the
$1,000 he paid to repair his vehicle’s tie rods.5
Michael Bright — In July 2010, Plaintiff Bright purchased a model year 2010
Dodge Ram 2500 from Dublin Dodge in Dublin, California. See SAC, ¶ 5. Bright
alleges that on January 30, 2012, his vehicle’s left tie rod broke. Id. Bright alleges that
that the Putnam dealership “purported to repair the vehicle, but did not actually fix the
Defect.” Id. Bright further alleges that on “at least two separate occasions” he
“experienced loss of steering and control due to a failure of the tie rod joint,” but he
does not allege whether these incidents resulted in any damage to his vehicle or whether
the “two separate occasions” were before or after the tie rod repair. Id. Bright does not
allege that he ever paid for a repair to his vehicle’s tie rods (or anything else). Id.6
Thomas Derrick — Plaintiff Derrick purchased a used model year 2010 Dodge
Ram 3500 (mileage unknown) in May 2013 from his uncle, Roy Morrell. Id. at ¶ 7.5Chrysler Group has no records of Sater’s March 2014 tie rod repair or that
Recall N49 has been performed on his vehicle.6Chrysler Group’s records show that the tie rod repair to Bright’s truck was paid
for under warranty, and that the remedy provided by Recall N49 was performed onBright’s vehicle on January 30, 2014.
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 13 of 35 Page ID #:1504
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 5CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Derrick claims that his vehicle has “excessive play” in the steering column and that it
has “excessive wear” on the steering damper, drag link, steering box, pitman arm, and
tires due to defective tie rods. Id. Derrick alleges that he “[f]irst” called the dealership
in January 2014 and requested that it “cure the Defect.” Id. Derrick claims that the
dealership “advised [him] that it could not cure the Defect.” He then alleges that he
returned to the dealership in April 2014 for a “‘repair’ of the Defect [but] the repair did
not fix the vehicle.” Id.7
Scott Johnson — Plaintiff Johnson purchased a model year 2010 Dodge Ram
2500 in November 2011 from Benny Boyd Dodge in Lampasas, Texas. Id. at ¶ 8.
“Soon thereafter [no date or mileage is alleged], the vehicle’s left tie rod broke.” Id.
Johnson claims that “on two separate occasions” he has taken his vehicle to the
dealership “to have the Defect fixed, but the vehicle continues to suffer from excessive
shake.” Id. Johnson alleges that he “called Chrysler and requested a cure to the
Defect” in September 2013, and again in January 2014 (id.), but Chrysler Group has no
records of the alleged communications. Johnson does not allege that he paid for a tie
rod repair.8
Matthew Cucullu — Plaintiff Cucullu purchased a model year 2011 Dodge Ram
2500 in November 2013 from Emmons Motor Company in Pasadena, Texas. Id. at ¶ 9.
Cucullu alleges that in November 2013, his vehicle’s left tie-rod broke. Id. He alleges
he had his vehicle towed “to the Dodge dealership” for repair and that he was charged
$400 for the repair. Id. He alleges that “[s]oon therafter, [he] received the [Recall 49]
notice and called Chrysler to inquire about the repair.” Id. He states that he “was told
that Chrysler would reimburse him for the $400 repair bill and that the recall work had
been done on his vehicle.” Id. He alleges that the left tie rod broke again in late July
7Chrysler Group’s records show that the remedy provided by Recall N49 wasperformed on Derrick’s vehicle on May 2, 2014, and that Derrick sold his truck on June1, 2014.
8Chrysler Group has no records showing that Recall N49 has been performed onJohnson’s vehicle.
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 14 of 35 Page ID #:1505
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 6CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
2014 and that the vehicle currently remains unrepaired despite his “multiple efforts to
notify Chrysler and its agents about the Defect and give it an opportunity to cure.” Id.
D. The Express Limited Warranties That Accompanied Plaintiffs’ Vehicles.
Plaintiffs allege that Chrysler Group provided them with a “New Vehicle Limited
Warranty” that states that Chrysler Group “will repair or replace, free of charge, any
part that is defective in material or workmanship under normal use for 3 years or 36,000
miles, whichever comes first.” Id. at ¶ 118. Plaintiffs attach this express warranty to
the SAC and allege that it is “substantially identical in language for all Class Vehicles.”
See id. at fn. 102 & SAC Ex. 8.
E. Plaintiffs’ Claims, Proposed Class, And Requested Relief.
Plaintiffs assert eleven causes of action: (1) violation of the Magnuson-Moss
Warranty Act (“MMWA”), 15 U.S.C. § 2301 et seq.; (2) violations of California and
Texas express warranty statutes; (3) violations of California and Texas implied
warranty statutes; (4) violation of the Song-Beverly Warranty Act, Cal. Civ. Code
§ 1791 et seq. (brought by Plaintiffs Bright and Sater only); (5) violation of the
Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750 et seq. (brought by
Plaintiffs Bright and Sater only); (6) violation of California’s Unfair Competition Law
(“UCL”), Business and Professions Code § 17200 et seq. (brought by Plaintiffs Bright
and Sater only); (7) violation of the Texas Deceptive Trade Practices Act (“DTPA”),
Tex. Bus. & Com. Code § 17.46 et seq. (brought by Plaintiffs Derrick, Johnson, and
Cucullu only); (8) negligent failure to warn; (9) negligent failure to test; (10) negligent
misrepresentation; and (11) unjust enrichment. See SAC ¶¶ 144-247.
Plaintiffs purport to bring their claims on behalf of “[a]ll current or former
purchasers and lessees in the United States of the following Vehicles: 2008-2012
Dodge Ram 2500 4x4, 3500 4x4 and 3500 Cab Chassis 4x2 trucks, 2008 Dodge Ram
1500 Mega Cab 4x4 trucks, and 2008-2012 Dodge Ram 4500 4x4 and 5500 4x4 trucks;
and 2004-2008 Dodge RAM 2500 4x4 and 3500 4x4 trucks, 2007-2008 Dodge RAM
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 15 of 35 Page ID #:1506
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 7CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
3500 4x2 Cab Chassis trucks and 2006-2008 Dodge RAM 1500 Mega Cab 4x4 trucks
manufactured June 11, 2004 through February 13, 2008, that had a MOPAR service
part steering linkage installed.” Id. at ¶ 131. Additionally, Plaintiffs propose to
represent two similarly defined subclasses of current or former purchasers and lessees
in California and Texas. Id. at ¶ 132.
For relief, Plaintiffs seek: class certification, an order declaring the alleged
actions to be in violation of the applicable statutory law and enjoining Chrysler Group
from “continuing to engage in unlawful business practices”; punitive damages;
“damages, consequential damages, specific performance and/or rescission”; “restitution
and disgorgement of profits, or other equitable relief”; an order requiring Chrysler
Group “to notify Class Members about inaccuracies in its Recall notices and to provide
correct information to the Class”; pre-judgment and post-judgment interest; injunctive
relief; an “award of costs, including, but not limited to, discretionary costs, expert fees,
attorneys’ fees and expenses incurred in prosecuting this case”; and an “order imposing
a constructive trust over the revenues from sales of and resulting profits received by
Chrysler as a result of its wrongful conduct.” Id., “Prayer For Relief”.
III. ARGUMENT
A. The Law Governing Motions To Dismiss Under Rules 12(b)(6) And 9(b).
To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain
“enough facts to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009); Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007). “[A]
plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do.” Twombly, 550 U.S. at 555 (citation omitted). A court should
not accept as true conclusory legal allegations. Iqbal, 566 U.S. at 678.
Claims which sound in fraud, including claims brought under consumer fraud
statutes like the CLRA and UCL, are subject to the heightened pleading requirements of
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 16 of 35 Page ID #:1507
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 8CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Federal Rule of Civil Procedure 9(b). See, e.g., Kearns v. Ford Motor Co., 567 F.3d
1120, 1125 (9th Cir. 2009). This standard requires a party to plead with “particularity.”
Id. This means that any “[a]verments of fraud must be accompanied by the who, what,
when, where, and how of the misconduct charged.” Vess v. Ciba-Geigy Corp., USA,
317 F.3d 1097, 1106 (9th Cir. 2003) (citation and internal quotation marks omitted).
“The plaintiff must set forth what is false or misleading about a statement, and why it is
false.” Id.
B. Plaintiffs’ Warranty Claims Fail (Counts I-III).
1. Plaintiffs’ Express Warranty Claims Fail For Multiple Reasons.
In Count II, Plaintiffs identify two separate express warranties that they allege
Chrysler Group breached: (1) the written “New Vehicle Limited Warranty” (SAC,
¶¶ 118, 153, 165 & SAC Ex. 8); and (2) an oral express warranty that the vehicles
“were safe for ordinary use” and “free from defects” (SAC, ¶¶ 164, 168). Plaintiffs
allege that the “Vehicles failed to comply with the express warranties because they
suffered from inherent defects that, from the date of purchase forward, rendered the
Vehicles unfit for their intended use and purpose and made them not free from defects
in material and workmanship.” Id. at ¶ 167. Plaintiffs’ express warranty claims —
whether based on the written warranties or the alleged oral warranties — fail for
multiple reasons.
First, Plaintiffs’ express warranty claims are premised on the mistaken notion
that Chrysler Group promised that their vehicles were “free from defects.” See, e.g.,
SAC, ¶¶ 167, 168. But Plaintiffs’ contention that Chrysler Group promised a defect-
free vehicle cannot be reconciled with either the language of the warranty document
itself or the analyses of courts and leading commentators. The New Vehicle Limited
Warranty “covers the cost of all parts and labor needed to repair any item on your
vehicle when it left the manufacturing plant that is defective in material, workmanship
or factory preparation.” See SAC Ex. 8, p. 7. This warranty begins on the earlier of
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 17 of 35 Page ID #:1508
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 9CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
“the date you take delivery of the vehicle; or the date when the vehicle was first put into
service” and, except for certain wear items not applicable here, “lasts for 36 months
from the date it begins or for 36,000 miles on the odometer, whichever occurs first.”
See SAC Ex. 8, pp. 8-9; see also SAC, ¶ 118. The New Vehicle Limited Warranty
expressly states that “[t]he warranties contained in this booklet are the only express
warranties that Chrysler Group LLC (‘Chrysler’) makes for your vehicle.” See SAC
Ex. 8, p. 6.
By its terms, the New Vehicle Limited Warranty does nothing other than extend
Chrysler Group’s obligation to pay “the cost of all parts and labor needed to repair any
item” during the warranty’s time-mileage durational limits. See SAC Ex. 8, p. 7. It
does not promise a defect-free vehicle. See, e.g., Crouch v. General Electric Co., 699
F.Supp. 585, 594 (S.D. Miss. 1988) (“Unlike a promise that a product will satisfactorily
perform at all times or will work properly for a lifetime, which are words of warranty
going to the performance of the goods, a promise to repair and/or replace warrants not
that the goods will perform in the future but that if they do not, the supplier or
manufacturer will make the necessary repairs”); Mydlach v. DaimlerChrysler Corp.,
875 N.E.2d 1047, 1056-59 (Ill. 2007) (“a repair or replacement warranty like the one
issued by defendant here has nothing to do with the inherent quality of the goods or
their future performance”) (citing Cosman v. Ford Motor Co., 674 N.E.2d 61 (Ill.App.
1996); C. Reitz, Manufacturers’ Warranties of Consumer Goods, 75 Wash. U. L.Q. 357,
364, n. 24 (1997); L. Lawrence, Lawrence’s Anderson on the Uniform Commercial
Code § 2-625:129, at 332 (3rd ed. 2001)). Indeed, courts recognize that a promise to
repair actually acts as a warning that the product at issue may fail. See, e.g., Cosman,
674 N.E.2d at 68 (“[A] promise to repair can more honestly be read as an admission
that the thing sold might break, rather than a legally enforceable prediction that it will
never need tending to”); Muss v. Mercedes-Benz of North America, Inc., 734 S.W.2d
155 (Tex.App. 1987) (noting that warranty providing for cost-free repairs during initial
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 18 of 35 Page ID #:1509
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 10CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
24 months/24,000 miles evidenced “the likelihood that goods will fail to perform …”
(emphasis in original)).
Second, Plaintiffs’ claims premised on an alleged breach of the New Vehicle
Limited Warranty fail because no Plaintiff alleges that he sought a repair within the
time/mileage durational limits of the written warranty.9 It is well-settled that “an
express warranty does not cover repairs made after the applicable time or mileage
periods have elapsed.” Daugherty v. Am. Honda Motor Corp., 144 Cal.App.4th 824,
830 (1999) (quoting Abraham v. Volkswagen of Am., Inc., 795 F.2d 238, 250 (2d Cir.
1986)) (emphasis added); see also Clemens v. DaimlerChrysler Corp., 534 F.3d 1017,
1023 (9th Cir. 2008) (“The repairs in this case were made after the warranty period
expired. Therefore, we affirm the dismissal of the express warranty claims”); Duquesne
Light Co. v. Westinghouse Electric Corp., 66 F.3d 604 (3d Cir. 1995) (“[T]he general
rule, from which we see no reason to deviate, is that an express warranty does not cover
repairs made after the applicable time has elapsed” (citation omitted)); Alban v. BMW
of North America, LLC, 2010 WL 3636253 (D.N.J. 2010) (“[A]n express warranty does
not cover repairs made after the applicable time has elapsed. That rule applies
regardless of whether the defect existed prior to the expiration of the warranty” (internal
quotation marks and citation omitted)). This is true even where a latent defect existed
at the time of the sale, but did not cause the product to fail until after the warranty
period had expired. Daugherty, 144 Cal.App.4th at 830-31; see also Licul v.
Volkswagen Group of America, Inc., 2013 WL 6328734, *2 (S.D.Fla. 2013) (“A
defendant’s knowledge of a latent defect at the time of sale, however, does not salvage a
9Plaintiffs Sater and Derrick each admit that they did not seek a repair until afterthey had driven their vehicles for over four years. See SAC, ¶¶ 4, 7. Plaintiff Cuculluadmits he purchased his vehicle used with approximately 40,000 miles on the odometer.Id. at ¶ 9. Plaintiffs Bright and Johnson do not allege that they sought a repair beforetheir vehicle had 36,000 miles on the odometer. Id. at ¶¶ 5, 8. Moreover, PlaintiffsDerrick and Johnson do not allege that they paid for any repair of their vehicles’ tie rods(id. at ¶¶ 7, 8) and Plaintiff Cucullu and Sater admit that Chrysler Group offered toreimburse him for the repair cost he expended (id. at ¶ 9; Doc. No. 25-4).
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 19 of 35 Page ID #:1510
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 11CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
claim for breach of express warranty where the warranty has expired before the defect
manifests”). Because no Plaintiff alleges that he sought a repair during the time-
mileage durational limits of the written warranty, Plaintiffs’ express warranty claims
must be dismissed.10
Third, Plaintiffs’ express warranty claims fail because the New Vehicle Limited
Warranty does not cover design defects. Plaintiffs expressly allege that their vehicles
possessed an “inherent design defect.” See SAC, ¶ 227 (emphasis added); see also id.
at ¶¶ 117, 130, 227. The New Vehicle Limited Warranty, however, covers only defects
in “material, workmanship or factory preparation.” See SAC Ex. 8, p. 7. It does not
cover design defects. See, e.g., Horvath v. LG Electronics Mobilecomm U.S.A., Inc.,
2012 WL 2861160, *5 (S.D.Cal. 2012) (“An express warranty covering ‘materials and
workmanship’ does not include design defects.”); Gertz v. Toyota Motor Corp., 2011
WL 3681647, *3 (C.D.Cal. 2011) (dismissing express warranty claim because warranty
that covers “repairs or adjustments for defects in materials or workmanship” did not
extend to design defects); Tait v. BSH Home Appliances Corp., 2011 WL 1832941, *3
(C.D.Cal. 2011) (warranty for any defects in “materials or workmanship” did not cover
allege design defect); see also Mack Trucks Inc. v. BorgWarner Turbo Systems, Inc.,
2012 WL 6643996, **3-4 (3d Cir. 2012) (holding warranty for materials and
10Plaintiffs’ bare, conclusory allegation that the durational limits of the expresswarranty are “procedurally and substantively unconscionable” (see SAC, ¶ 155) — withno supporting facts — is a legal conclusion that is properly disregarded and of no legaleffect. Iqbal, 566 U.S. at 678. Moreover, the concept of unconscionability is notapplied to a warranty freely given by a seller, but rather where a seller restricts rights abuyer would otherwise have under the U.C.C. See, e.g., Akwright-Boston Mfg. v.Westinghouse Electric Corp., 844 F.2d 1174, 1180 n.13 (5th Cir. 1988); J. White and R.Summers, Handbook of the Law Under the Uniform Commercial Code, § 12-3 at 431n.19 (2d Ed. 1980). Here, the duration of the repair warranty does not limit the rightsPlaintiffs would otherwise have, but rather defines the extent of the repair warrantyvoluntarily provided. As such, the durational limits of the New Vehicle LimitedWarranty could never be unconscionable. Id. In any event, the Ninth Circuit has heldthat claims of unconscionability fail when a consumer could have purchased a differentvehicle or an extended warranty. See Smith v. Ford Motor Co., 462 Fed.Appx. 660,663-64, 2011 WL 6322200, *2 (9th Cir. 2011); see also Licul, 2013 WL 6328734 at *3(rejecting claim of unconscionability stating that 3-year/36,000 mile repair warrantywas “both common in the industry and routinely enforced by courts”).
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 20 of 35 Page ID #:1511
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 12CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
workmanship does not cover design defects); Voelker v. Porsche Cars North America,
Inc., 353 F.3d 516, 520, 527 (7th Cir. 2003) (same). Because the New Vehicle Limited
Warranty does not cover design defects, Plaintiffs’ express warranty claims must be
dismissed.
Fourth, Plaintiffs’ claims premised on an alleged breach of an oral promise also
fail because the New Vehicle Limited Warranty states that “[t]he warranties contained
in this booklet are the only express warranties that Chrysler Group LLC (‘Chrysler’)
makes for your vehicle.” See SAC Ex. 8, p. 6. Plaintiffs’ alleged oral warranties are
not contained in the warranty booklet and are thus excluded under the terms of the New
Vehicle Limited Warranty. Such an exclusion is valid and enforceable. Berenblat v.
Apple, Inc., 2010 WL 1460297 *4-5 (N.D.Cal. 2010) (warranty terms are binding and
consumers were bound by the limitations of the express warranty, which included a
disclaimer of other warranties, where the disclaimer was available to them prior to the
sale of the product); Davis v. Louisiana-Pacific Corp., 2008 WL 2030495 *10
(Cal.App. 2008) (“Plaintiffs cannot take from the warranty the promises and ignore the
conditions, exclusions, and disclaimers attached to them.”).
Fifth, Plaintiffs’ claims based on an alleged oral promise that the vehicles were
“safe for ordinary use” and “free from defects” (SAC, ¶¶ 164, 168) fail because
Plaintiffs do not allege sufficient facts showing the terms of the warranty or that any
such express warranty was conveyed to them. That is, Plaintiffs do not identify what
was actually said or conveyed that formed the express warranty, when it was said, who
said it, or any other details whatsoever about the alleged representations that formed the
express warranties. Nor do they allege any facts showing that they heard, saw, or relied
on any such vague representations. Without such allegations, Plaintiffs’ claims that
Chrysler Group breached an alleged oral express warranty are not plausible and must be
dismissed. Rice v. Sunbeam Products, Inc., 2013 WL 146270 *12 (C.D. Cal. 2013)
(plaintiff’s express warranty claim was “without merit” where allegations supporting
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 21 of 35 Page ID #:1512
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 13CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
the same were insufficient, resting on a single, indefinite representation that was “not
the sort of unequivocal statement that can give rise to contractual obligation”).
Finally, even if Plaintiffs adequately plead the terms and conveyance of the
alleged express warranty (which they have not), their vague allegations that the vehicle
is “safe for ordinary use” and that Chrysler Group made representations “concerning the
quality and durability of Class Vehicles” (SAC ¶¶ 164, 238) is mere puffing. It is well-
settled that statements that can be categorized only as puffing do not create an express
warranty. See, e.g., Smith v. LG Electronics U.S.A., Inc., 2014 WL 989742, *5 (N.D.
Cal. 2014) (finding puffing statements could not support claim for breach of warranty
because “[v]ague statements regarding reliability, dependability, and safety are not
actionable express warranties”); Osborne v. Subaru of America, Inc., 198 Cal.App.3d
646, 660 fn.8 (1988) (noting that even if advertisements could create a warranty, those
advertisements that are just “puff” do not).
2. Plaintiffs’ Implied Warranty Claims Fail For Multiple Reasons.
In Count III, Plaintiffs allege that Chrysler Group breached the implied warranty
of merchantability by selling trucks with defective tie rods. See SAC, ¶¶ 174-183.
Plaintiffs’ implied warranty claims fail for multiple reasons.
First, Chrysler Group’s written warranty expressly limited all implied warranties
applicable to Plaintiffs’ vehicles “to the time periods covered by the express written
warranties contained in this booklet.” See SAC Ex. 8, p. 6. This limitation of the
implied warranties is valid. See, e.g., Hovsepian v. Apple, Inc., 2009 WL 2591445, *8
(N.D.Cal. 2009) (holding that manufacturers may impose limits on implied warranties);
Deburro v. Apple, Inc., 2013 WL 5917665, *6 (W.D.Tex. 2013) (upholding limitation
of implied warranty to “the duration of the express warranty”). As demonstrated above,
Plaintiffs’ vehicles performed without incident throughout the duration of the express
warranty, and thus throughout the duration of the implied warranty. Thus, no breach of
an implied warranty occurred.
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 22 of 35 Page ID #:1513
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 14CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Second, Plaintiffs Sater’s and Bright’s implied warranty claims fail because they
are not in privity with Chrysler Group. Sater admits that he purchased his truck from
the Frahm Dodge dealership in Narco, California, and Bright admits that he purchased
his truck from the Dublin Dodge dealership in Dublin California. See SAC, ¶¶ 4-5.
California requires privity in order to assert a UCC implied warranty claim. See, e.g.,
Clemens, 534 F.3d at 1023 (California law requires “vertical contractual privity” for
claims of breach of implied warranty, meaning that a buyer and seller must be “in
adjoining links of the distribution chain,” and an “end consumer [who] buys from a
retailer is not in privity with a manufacturer”); Xavier v. Philip Morris USA Inc., 787
F.Supp.2d 1075, 1083-84 (N.D. Cal. 2011) (finding that, due to a lack of privity,
purchasers at retail cannot sue a remote manufacturer); Blanco v Baxter Healthcare
Corp, 158 Cal.App.4th 1039, 1058-59 (2008) (privity required for implied warranty
claim). Because neither Sater nor Bright are in privity with Chrysler Group, their
implied warranty claims must be dismissed.11
Third, the facts pleaded make clear that Plaintiff Sater’s implied warranty claim
is barred by the statute of limitations. The statute of limitations for a claim for breach
11 Plaintiffs argue that privity is not required because they are a “third-partybeneficiary” of some unidentified contract that can be substituted for the requirement ofprivity. See SAC, ¶ 152. Plaintiffs’ argument is directly contrary to Ninth Circuitprecedent. See Clemens, 534 F.3d at 1023-24 (9th Cir. 2008). In Clemens, the courtupheld the dismissal of the plaintiff vehicle buyer’s breach of implied warranty claimbrought against the vehicle manufacturer. Id. The court reasoned that there are onlylimited express exceptions to the privity requirement (reliance on labels andadvertisements, and for foodstuffs, pesticides, pharmaceuticals, and employees of apurchaser), and as a federal court sitting in diversity it could not expand thoseexceptions so that a vehicle purchaser can bring an implied warranty claim against amanufacturer. Id. This District, analyzing Clemens, has expressly found that a “third-party beneficiary” exception to the privity requirement does “not exist in the Californiajurisprudence” and that “[n]o reported California decision has held that the purchaser ofa consumer product may dodge the privity rule by asserting that he or she is a third-party beneficiary of the distribution agreements linking the manufacturer to the retailerwho ultimately made the sale.” Xavier, 787 F.Supp.2d 1075, 1083 (N.D.Cal. 2011); seealso Soares v. Lorono, 2014 WL 723645, *4 (N.D.Cal. 2014) (citing Clemens anddismissing breach of implied warranty claim for lack of privity); Ward v. Ipex, Inc.,2009 WL 2634842 (C.D.Cal. 2009) (based on Ninth Circuit’s holding in Clemens, courtrejected argument that third-party beneficiary status alleviated need for privity to bringan implied warranty claim).
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 23 of 35 Page ID #:1514
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 15CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
of implied warranty is four years, and the limitations period begins to run upon delivery
of the product at issue (i.e., the limitations period began to run at the time of the original
sale). See, e.g., National Union Fire Insurance Co. of Pittsburgh v. Dassault Falcon Jet
Corp., 263 Fed.Appx 604, 607, 2008 WL 122150, *2 (9th Cir. 2008); see also Cal.
Com. Code § 2725.12 Plaintiff Sater admits that he took delivery of his truck in January
2010. See SAC, ¶ 4. This case was not filed until April 9, 2014. Accordingly, Sater’s
implied warranty claim is barred by the statute of limitations and should be dismissed.
Finally, Plaintiffs’ implied warranty claims fail because they admit that they
drove their vehicles for tens of thousands of miles without incident. The implied
warranty of merchantability promises nothing more than that the goods furnished are
“fit for the ordinary purpose for which such goods are used.” Deburro, 2013 WL
5917665 at *7; General Motors Corp. v. Brewer, 966 S.W.2d 56, 57 (Tex. 1998). It
provides only for “a minimum level of quality.” American Suzuki Motor Corp. v.
Superior Court, 37 Cal.App.4th 1291, 1296 (1995). It is well-established that a
“product which performs its ordinary function adequately does not breach the implied
warranty of merchantability merely because it does not function as well as the buyer
would like, or even as well as it could.” Deburro, 2013 WL 5917665 at *7 (quoting
Brewer, 966 S.W.2d at 57).
“[I]in the case of automobiles, the implied warranty of merchantability can be
breached only if the vehicle manifests a defect that is so basic it renders the vehicle
unfit for its ordinary purpose of providing transportation.” American Suzuki, 27
Cal.App.4th at 1296; see also Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 2014
WL 211462, *13 (C.D.Cal. 2014) (analyzing breach of implied warranty claim, court
12 The only exception to this well-established rule is that if a warranty extends tofuture performance the statute of limitations will not begin to run until the time ofperformance; however, this exception is not applicable to the statutorily-created impliedwarranty. See, e.g., MacDonald v. Ford Motor Co., 2014 WL 1340339, **10-11 (N.D.Cal. 2014); Seifi v. Mercedes-Benz USA, LLC, 2013 WL 2285339, **5-6 (N.D. Cal.2013).
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 24 of 35 Page ID #:1515
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 16CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
found that the “basic inquiry” was “whether the vehicle was fit for driving”); Glass v.
BMW North Am., LLC, 2011 WL 6887721 *13 (D.N.J. 2011) (same). When it is
uncontroverted that a motor vehicle has been driven for an extended period of time
and/or for tens of thousands of miles, a breach of implied warranty claim cannot
survive. See, e.g., Deburro, 2013 WL 5917665 at *7 (stating that “there is no
requirement that goods must last forever in order to be merchantable,” and dismissing
implied warranty claims where laptops functioned without incident for several years);
Glass, 2011 WL 6887721 at *15 (no implied warranty claim where car was driven for
five years); Suddreth v. Mercedes-Benz, LLC, 2011 WL 5240965, *5 (D.N.J. 2011) (“It
is simply not plausible that a motor vehicle could be classified as not merchantable
when it has been used for its intended purpose for 4 years and 50,000 miles”); Sheris v.
Nissan North America Inc., 2008 WL 2354908 (D.N.J. 2008) (dismissing implied
warranty claim where plaintiff drove his vehicle “for 20,618 miles and for about two
years before he needed to replace his brake pads and rotors,” finding that the vehicle
“was fit for its ordinary purpose of providing basic transportation”); Priebe v. Autobarn,
Ltd., 240 F.3d 584, 588 (7th Cir. 2001) (despite allegations that plaintiff “lost faith” in
his vehicle, fact that he drove it more than 30,000 miles negated merchantability claim).
Here, Plaintiffs admit that they drove their vehicles for years before ever needing a
repair. See SAC, ¶¶ 4-9. Under such circumstances, Plaintiffs’ claims for breach of the
implied warranty of merchantability cannot survive.
3. Plaintiffs’ Alleged Violations Of The MMWA Fall With Their Claims
For Breach Of Express and Implied Warranties.
In Count I, Plaintiffs allege a violation of the MMWA. Their MMWA claim is
based on the exact same alleged breach of state law express and implied warranty
claims set forth in Counts II and III. See SAC, ¶¶ 149, 150, 153. To state a claim under
the MMWA, Plaintiffs must adequately plead a cause of action for breach of written or
implied warranty under state law. See, e.g., Clemens, 534 F.3d at 1022 (noting that
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 25 of 35 Page ID #:1516
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 17CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
“claims under the Magnuson–Moss Act stand or fall with his express and implied
warranty claims under state law”). Because Plaintiffs do not state a claim for state law
breach of express or implied warranty (see Sections III.B.1 & III.B.2, supra), their
MMWA claim must also be dismissed.
C. Plaintiffs’ Implied Warranty of Merchantability Claim Under The Song-
Beverly Consumer Warranty Act Claim Also Fails.
In Count IV, Plaintiffs Sater and Bright allege violations of the Song-Beverly
Consumer Warranty Act. These claims should be dismissed as time-barred under the
Act: “The duration of the implied warranty of merchantability and where present the
implied warranty of fitness shall be coextensive in duration with an express warranty
which accompanies the consumer goods, provided the duration of the express warranty
is reasonable; but in no event shall such implied warranty have a duration of less than
60 days nor more than one year following the sale of new consumer goods to a retail
buyer.” Cal. Civ. Code § 1791.1(c) (emphasis added).
“Subject to a sixty-day minimum and one-year maximum, implied warranties
exist for as long as express warranties.” Marchante v. Sony Corp. of America, Inc., 801
F.Supp.2d 1013, 1021 (S.D.Cal. 2011) (holding that the implied warranty at issue had a
one year duration to match that of the express warranty) (quoting Cal. Civ. Code
§ 1791.1(c)). And, where an express warranty is one year or more, “[t]he duration of an
implied warranty of merchantability is one year.” Tietsworth v. Sears, 720 F.Supp.2d
1123, 1142 (“plaintiff’s implied warranty claim was time-barred because the condition
complained of did not occur until after the one-year express warranty period ended); see
also In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection HD TV
Television Litig., 758 F.Supp.2d 1077, 1100-01 (S.D.Cal. 2010) (holding that the
plaintiffs had failed to state a claim for a breach of implied warranty because they did
not sufficiently allege that the defendant breached the implied warranty within the one-
year warranty period).
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 26 of 35 Page ID #:1517
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 18CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
In Grodzitsky v. American Honda Motor Co., Inc., the plaintiffs alleged that the
window regulators of their vehicles were defective and sought to pursue an implied
warranty of merchantability claim under the Song-Beverly Act. 2013 WL 2631326,
**1-2 (C.D.Cal. 2013). The defendant moved to dismiss the claim under the Act’s time
limitation of implied warranties to no more than “one year following the sale of new
consumer goods to a retail buyer.” Id. at *10 (quoting Cal. Civ. Code § 1791.1(c)). In
response, the plaintiffs relied on Mexia v. Rinker Boat Co., 174 Cal.App.4th 1297
(2009), for the position that the Act’s durational provision did not apply because the
defect was alleged to have existed at the time of the sale. The Grodzitsky court
determined that the Mexia holding was contrary to established California case law.
Grodzitsky, 2013 WL 2631326 at *10 (collecting cases). The court found that the
plaintiffs’ Song-Beverly Act claim was time-barred and dismissed the plaintiffs’ claim
with prejudice “[b]ecause the windows at issue … did not begin to fail until well more
than a year after they were purchased.” Id. at *11.
Here, like Grodzitsky, the alleged defect did not cause Plaintiffs Sater’s and
Bright’s left tie rods to break until well after the one-year time limitation of the Song-
Beverly Act. Accordingly, Plaintiffs have failed to state a claim under the Act because
they have not sufficiently alleged that Chrysler Group breached the implied warranty
within that time limitation.
D. Plaintiffs’ Consumer Fraud And Negligent Misrepresentation Claims Do
Not Satisfy Rule 9(b) (Counts V, VI, IX, and X).
Under Rule 9(b), Plaintiffs are required to “state with particularity the
circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9 (b). Both the CLRA
and the UCL sound in fraud, and the Ninth Circuit has “specifically ruled that
Rule 9(b)’s heightened pleading standards apply to claims for violations of the CLRA
and UCL.” Kearns, 567 F.3d at 1125. This is true regardless of whether such claims
are based on affirmative statements or fraudulent omissions. Id. at 1127; see also In re
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 27 of 35 Page ID #:1518
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 19CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Google Phone Litig., 2012 WL 3155571, *9 (N.D.Cal. 2012). Claims brought under
the DTPA are likewise subject to the heightened pleading requirements of Rule 9(b).
See, e.g., Frith v. Guardian Life Ins. Co. of America, 9 F.Supp.2d 734, 742 (S.D.Tex.
1998). Finally, Plaintiffs’ negligent misrepresentation claim is also subject to Rule
9(b)’s heightened pleading requirements. See, e.g., Neilson v. Union Bank of
California, N.A., 290 F.Supp.2d 1101, 1141 (C.D.Cal. 2003) (“It is well-established in
the Ninth Circuit that both claims for fraud and negligent misrepresentation must meet
Rule 9(b)’s particularity requirements”).
Under Rule 9(b), a plaintiff alleging consumer fraud or a misrepresentation claim
based upon affirmative representations must allege and describe in detail “the particular
circumstances surrounding such representations” — i.e., “the who, what, when, where,
and how” of the supposedly fraudulent statements. Kearns, 567 F.3d at 1126. “In other
words, ‘the circumstances of the alleged fraud must be specific enough to give
defendants notice of the particular misconduct so that they can defend against the
charge and not just deny that they have done anything wrong.’” Garcia v. Sony
Computer Enter. Am., LLC, 2012 WL 1610615, *3 (N.D.Cal. 2012) (quoting Vess, 317
F.3d at 1106).
The only statements that Plaintiffs allege with any particularity whatsoever
concern general statements on Chrysler Group’s website regarding “safety” of Chrysler
vehicles (see SAC, ¶¶ 114-117) that can be characterized as nothing but non-actionable
puffery. See, e.g., In re Sony Grand Wega KDF–E A10/A20 Series Rear Projection
HDTV Television Litig., 758 F.Supp.2d 1077, 1089 (S.D.Cal. 2010) (representations of
a product’s “high” or “superior” quality amounted to puffery); Oestreicher v. Alienware
Corp., 544 F.Supp.2d 964, 973-74 (N.D.Cal. 2008), aff’d 322 Fed. Appx. 489 (9th Cir.
2009) (“generalized and vague statements of product superiority” were not actionable);
Anunziato v. eMachines, Inc., 402 F.Supp.2d 1133, 1139-41 (C.D.Cal. 2005)
(representations of a “high quality,” “reliable,” “high performance” notebook with the
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 28 of 35 Page ID #:1519
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 20CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
“latest technology” amounted to non-actionable puffery); Tietsworth v. Sears, Roebuck
& Co., 720 F.Supp.2d 1123, 1137 (N.D.Cal. 2003) (defendant’s representations that
product was “designed, manufactured and tested for years of dependable operations ...
are mere puffery”). Moreover, there are no allegations of fact supporting the notion that
Plaintiffs ever heard or saw any of these “puffing” statements or otherwise relied on
them. Plaintiffs also allege that Chrysler Group made the “false statement[]” that the
defect “was limited to ‘low speed parking lot maneuvers’ and only limited to certain
models and model years of the Vehicles” (SAC, ¶ 19), but do not provide the who,
when, where, or how the statement was made or that they relied on it.
All of the other alleged affirmative misrepresentations made by Chrysler Group
are the most general statements regarding “safety,” “quality,” and “durability” of
Chrysler vehicles (see SAC ¶¶ 114, 164, 168, 197, 200, 238), that are completely
devoid of the who, what, when, where and how required under Rule 9(b). Plaintiffs do
not describe the “representations” or when or how they were conveyed or who
conveyed them. Nor are there any allegations of fact supporting the notion that
Plaintiffs ever heard or saw any of these “representations” or otherwise relied on them.
Plaintiffs’ vague and conclusory allegations are not sufficient to satisfy the Rule 9(b)
standard, and will not allow them to avoid the dismissal of their CLRA, UCL, DTPA,
and negligent misrepresentation claims. See, e.g., Kearns, 567 F.3d at 1126.
Plaintiffs’ claims based upon alleged fraudulent omissions fare no better. In
order to plead the circumstances of a fraudulent omission with the specificity required
by Rule 9(b), a plaintiff “must describe the content of the omission and where the
omitted information should or could have been revealed as well as provide
representative samples of advertisements, offers, or other representations that plaintiff
relied on to make her purchase and that failed to include the allegedly omitted
information.” Eisen v. Porches Cars N. Am., Inc., 2012 WL 841019, *3 (C.D.Cal.
2012) (quotingMarolda v. Symantec Corp., 672 F.Supp.2d 992, 1002 (N.D.Cal. 2009));
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 29 of 35 Page ID #:1520
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 21CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
see also Erickson v. Boston Scientific Corp., 846 F.Supp.2d 1085, 1093 (C.D.Cal.
2011). A plaintiff must also describe with particularity facts showing how and why the
product is defective, how the defendant discovered the defect before the plaintiff’s
purchase, the specific steps the defendant took to conceal the defect from the plaintiff
and other consumers, the plaintiff’s reliance upon particular materials containing the
omission, and the basis for the defendant’s affirmative duty to disclose the information.
Eisen, 2012 WL 841019 at *3; Tait v. BSH Home Appliances Corp., 2011 WL
1832941, *3 (C.D.Cal. 2011); Kent v. Hewlett-Packard Co., 2010 WL 2681767, *12
(N.D.Cal. 2010); Berenblat v. Apple, Inc., 2010 WL 1460297, **8-9 (N.D.Cal. 2010).
Counts V, VI, IX, and X are devoid of any allegations which even arguably meet
the pleading requirements of Rule 9(b). Plaintiffs only allege that “Chrysler actively
concealed the Defects from consumers” (SAC, ¶ 91), but they plead no facts supporting
this bare legal conclusion.13There is nothing in the SAC describing precisely what
information was withheld from Plaintiffs or where the omitted information could or
should have been revealed. Plaintiffs do not identify any representation that they relied
upon that failed to include the allegedly omitted information, nor do they plead any
other facts showing reliance. Nor do they plead sufficient facts showing that Chrysler
Group had an affirmative duty to disclose the alleged defect to consumers.
Plaintiffs’ failure to comply with Rule 9(b) requires dismissal of their consumer
fraud and negligent misrepresentation claims.
E. Plaintiffs’ Negligence Claims Are Barred By The Economic Loss Rule
(Counts VII-IX).
Plaintiffs seek purely economic losses stemming from the purchase of their
vehicles. See, e.g., SAC, ¶¶ 121, 122, 125, 126, 160, 192, 213. They do not allege any
physical injury or damage to any property other than their vehicles (and for most
13It is noteworthy that the Ninth Circuit has expressly stated that “[i]n the context
of post-warranty failures, California courts have viewed fraudulent concealment actionsunder [the UCL] with some skepticism.” Clemens, 534 F.3d at 1026.
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 30 of 35 Page ID #:1521
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
2822
CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISSTHE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Plaintiffs there is not even an allegation that their vehicles have resulted in their
expenditure of any money that could even arguably be classified as “damage”).
Because California and Texas tort law prohibit recovery of purely economic damages
absent physical injury or damage to property other than the product itself, Plaintiffs’
negligence claims are foreclosed as a matter of law.
“[I]n Texas, the economic loss rule bars plaintiffs from ‘recover[ing] economic
losses resulting from a defective product based on a negligence theory.’” Memorial
Hermann Healthcare Sys., Inc., 524 F.3d 676, 678 (5th Cir. 2008) (quoting Hininger v.
Case Corp., 23 F.3d 124, 126 (5th Cir. 1994)). The economic loss rule applies to
preclude tort claims brought to recover economic losses against the manufacturer or
seller of a defective product where the defect damages only the product itself and does
not cause personal injury or damage to other property. Equistar Chems., L.P. v.
Dresser-Rand Co., 240 S.W.3d 864, 867 (Tex. 2007); Coastal Conduit & Ditching, Inc.
v. Noram Energy Corp., 29 S.W.3d 282, 285-86 (Tex.App. 2000). “Where a product
injures a consumer economically and not physically, the consumer may recover under
the warranties provided by the Uniform Commercial Code,” but not under negligence or
strict liability theories. Murray v. Ford Motor Co., 97 S.W.3d 888, 891 (Tex.App.
2003); see also D.S.A. Inc. v. Hillsboro Indep. Sch. Dist., 973 S.W.2d 662, 664 (Tex.
1998) (applying economic loss rule to negligent misrepresentation claim). The law of
California is similar. See, e.g., Sharma v. BMW of North America, LLC, 2014 WL
2795512, *6 (N.D. Cal. 2014); Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal.4th
979, 988 (2004) (economic loss rule bars tort recovery for economic loss due to
“disappointed expectations”); Jimenez v. Superior Court, 29 Cal.4th 473, 482-83
(2002); Aas v. Superior Court, 24 Cal.4th 627, 640 (2000).14
14Chrysler Group acknowledges that California law may provide for tort
recovery where a component part (e.g., a window) causes damage to the product intowhich it has been incorporated (e.g., a house) (see, e.g., Jimenez, 29 Cal.4th at 483),but that is generally under circumstances in which the component part can beconsidered “a distinct and separate product” as opposed to “part of one integratedsystem” (Tasion Comm., Inc. v. Ubiquiti Networks, Inc., 2013 WL 4530470, *6
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 31 of 35 Page ID #:1522
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 23CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Here, Plaintiffs seek only economic losses — overpayment for their vehicle,
repair costs, loss of use of their vehicle, and diminution in value of their vehicle. See,
e.g., SAC, ¶¶ 121, 122, 125, 126, 160, 192, 213. Because Plaintiffs do not allege any
physical injury or damage to property other than their vehicles, their negligent claims
are barred by the economic loss rule and must be dismissed.
F. Plaintiffs’ Unjust Enrichment Claims Fail (Count XI).
In Count XI, Plaintiffs assert claims for unjust enrichment. See SAC, ¶¶ 243-
247. Plaintiffs’ unjust enrichment claims fail for multiple reasons.
First, Texas and California do not recognize unjust enrichment as an independent
cause of action. See, e.g., Mowbray v. Avery, 76 S.W.3d 663, 679 (Tex.App. 2002)
(“unjust enrichment is not a distinct independent cause of action but simply a theory of
recovery”) (citing Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex.App. 1997));
Oxford Fin. Co., Inc. v. Velez, 807 S.W.2d 460, 465 (Tex.App. 1991); City of Corpus
Christi v. Heldenfels Brothers, Inc., 802 S.W.2d 35, 40 (Tex.App. 1990)); see also
Melchior v. New Line Productions, Inc., 106 Cal.App.4th 779, 793 (Cal.App. 2003)
(“there is no cause of action in California for unjust enrichment”); Jogani v. Superior
Court, 165 Cal.App.4th 901, 911 (2008) (following Melchior and dismissing unjust
enrichment claim).15
Second, an unjust enrichment claim is barred where, as here, there is an express
contract governing the subject matter of the dispute. See, e.g., Klein v. Chevron U.S.A.,
Inc., 202 Cal.App.4th 1342, 1389-90 (2012) (the parties’ sales contract precluded the
plaintiffs’ claim under the theory of unjust enrichment); California Med. Ass’n, Inc. v.
(N.D.Cal. 2013)). See, e.g., Agricola Baja Best, S. De. R.L. de C.V. v. Harris MoranSeed Co., 2014 WL 4385450, *10 (S.D.Cal. 2014).
15Chrysler Group acknowledges that some courts have permitted a Plaintiff toassert an unjust enrichment claim as a separate cause of action. These situations,however, appear to be limited to circumstances in which a party would be without aremedy if a cause of action for unjust enrichment were not recognized. Here, Plaintiffshave claims available for restitutionary relief, such as their claims for violations of theCLRA, UCL, and DTPA.
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 32 of 35 Page ID #:1523
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 24CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
Aetna U.S. Healthcare of California, Inc., 94 Cal.App.4th 151, 172 (2001); First Union
Nat. Bank v. Richmont Capital Partners I, L.P., 168 S.W.3d 917, 931 (Tex.App. 2005)
(“Unjust enrichment claims are … predicated on the absence of an express contract
controlling the circumstances.”); Fortune Production Co. v. Conoco, Inc., 52 S.W.3d
671, 684-85 (Tex. 2000). A warranty is a contract, and the existence of a warranty thus
precludes a claim for unjust enrichment regardless of whether the warranty is still viable
or expired. See, e.g., Tait, 2011 WL 1832941 at *6 (finding that “alleg[ing] the
existence of a written warranty agreement … is equivalent to alleging the existence of a
written contract” and dismissing plaintiffs’ unjust enrichment claim as precluded by a
warranty even though it did not cover defects at issue”); Daugherty, 144 Cal.App.4th at
830 (“warranty is a contractual promise”); Moulton v. LG Electronics USA, Inc., 2012
WL 3598760, *4 (D.N.J. 2012) (dismissing unjust enrichment claim based on existence
of expired warranty); In re General Motors Corp. “Piston Slap” Products Liab. Litig.,
385 F.Supp.2d 1172, 1176 (W.D.Okla. 2005) (applying Texas law and holding that
where a complaint alleged the existence of a warranty covering the parts at issue, “the
available contractual remedy precludes the plaintiff’s unjust enrichment claim”);
Daugherty v. Sony Elecs., Inc., 2006 WL 197090, *6 (Tenn.App. 2006) (dismissing
unjust enrichment claim based on existence of expired warranty). Here, the allegations
of the SAC establish the existence of a written warranty between Plaintiffs and Chrysler
Group relating to the subject matter of their claims. See, e.g., SAC, ¶¶ 118, 165; SAC
Ex. 8. Because Plaintiffs plead the existence of a contract covering the subject matter
of their claims, they cannot pursue a claim for unjust enrichment.
Third, an equitable claim like unjust enrichment also fails when the plaintiff has
an adequate remedy at law. See, e.g., McKesson HBOC, Inc. v. New York State
Common Retirement Fund, Inc., 339 F.3d 1087, 1093-94 (9th Cir. 2003) (affirming
dismissal of unjust enrichment claim on the pleadings where plaintiff alleged he had
been “bamboozled” into deal at issue because there were “potential legal claims”
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 33 of 35 Page ID #:1524
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 25CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS
THE SECOND AMENDED COMPLAINT ANDMEMORANDUM OF POINTS AND AUTHORITIES
available to the plaintiff); Bailey v. O’Donnell, 980 F.2d 1445, **2-3 (5th Cir. 1992)
(unjust enrichment claim “foreclosed” where adequate remedy at law existed, even
where contractual claims were untenable). And it is beyond dispute that this element of
“no adequate remedy at law” is part and parcel of the law of California and Texas. In re
Ford Tailgate Litig., 2014 WL 1007066, *5 (N.D.Cal. 2014) (dismissing unjust
enrichment claims, and finding “[i]f plaintiffs claim they were damaged as a result of
consumer deception, the proper remedy is under their respective state consumer
protection statutes”); Overton v. Bird Brain, Inc., 2012 WL 909295, *7 (C.D.Cal.
2012); In re Parkcentral Global Litigation, 884 F.Supp.2d 464, 483 (N.D.Tex. 2012)
(motion to dismiss granted where court found that “[p]laintiffs have an adequate
remedy at law, and thus cannot pursue a claim for unjust enrichment”); Texas
Carpenters Health Ben. Fund v. Philip Morris, Inc., 21 F.Supp.2d 664, 678-79
(E.D.Tex. 1998).
Here, the SAC makes it abundantly clear that Plaintiffs have adequate remedies
at law, including claims for violations of the CLRA, UCL, and DTPA (even if they are
untenable and deficient in their own respect). Accordingly, Plaintiffs’ claims for unjust
enrichment must be dismissed.
IV. CONCLUSION
For the reasons outlined herein, Defendant Chrysler Group LLC respectfully
requests that this Court dismiss Plaintiffs’ Second Amended Complaint in its entirety.
DATED: November 13, 2014 Respectfully submitted,
THOMPSON COBURN LLPBy: /s/ Rowena Santos
KATHY A. WISNIEWSKIJOHN W. ROGERSROWENA SANTOSAttorneys for DefendantCHRYSLER GROUP LLC
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 34 of 35 Page ID #:1525
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 26CHRYSLER GROUP LLC’S NOTICE OFMOTION AND MOTION TO DISMISS THE SECOND AMENDEDCOMPLAINT; ANDMEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OFMOTION TO
DISMISS
CERTIFICATE OF SERVICE
I am employed in the County of Los Angeles, State of California. I am over theage of 18 and not a party to the within action. My business address is 2029 CenturyPark East, Suite 1900, Los Angeles, CA 90067. A true and correct copy of the foregoingdocument described as:
CHRYSLER GROUP LLC’S NOTICE OF MOTION ANDMOTION TODISMISS SECOND AMENDED COMPLAINT; AND MEMORANDUM OFPOINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS
will be served or was served (a) on the judge in chambers in the form and mannerrequired by Local Rules and (b) in the manner indicated below.
(TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONICFILING (“NEF”) – Pursuant to controlling General Order(s) and Local Rule(s), theforegoing document will be served by the Court via NEF and hyperlink to the document.On November 13, 2014, I checked the CM/ECF docket for this case and determined thatthe following persons are on the Electronic Mail Notice List to receive NEFtransmission at the email address(es) indicated below:
Robert G. LoewyLaw Offices of Robert G Loewy1101 Quail Street Suite 1200Newport Beach, CA [email protected]
Steven L. MarchbanksPremier Legal Center APC2550 Fifth Avenue 9th FloorSan Diego, CA [email protected]
Elizabeth A. ShonsonJanine D. ArnoMark J. DearmanStuart A. DavidsonRobbins Geller Rudman and Dowd LLP120 East Palmetto Park Road, Suite 500Boca Raton, FL [email protected]@[email protected]@rgrdlaw.com
I declare under penalty of perjury under the laws of the United States of Americathat the foregoing is true and correct. Executed on November 13, 2014, at Los Angeles,California.
Michelle A. Wessman /s/ Michelle A. Wessman(Type or print name) (Signature)
X
Case 5:14-cv-00700-VAP-DTB Document 65 Filed 11/13/14 Page 35 of 35 Page ID #:1526