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finding differences in scienter requirements between states’ consumer protection laws material
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Case No. SA CV 19-839-MWF (MAAx)
03-06-2020
Nestor MOSQUEDA, et al. v. AMERICAN HONDA MOTOR COMPANY, INC.
Mark Samuel Greenstone, Greenstone Law APC, Danielle Leigh Manning, Lionel Zevi Glancy, Marc L. Godino, Glancy Prongay and Murray LLP, Los Angeles, CA, for Nestor Mosqueda, et al. Amir M. Nassihi, Shook Hardy and Bacon LLP, San Francisco, CA, Darlene M. Cho, Shook Hardy and Bacon LLP, Los Angeles, CA, for American Honda Motor Company, Inc.
Mark Samuel Greenstone, Greenstone Law APC, Danielle Leigh Manning, Lionel Zevi Glancy, Marc L. Godino, Glancy Prongay and Murray LLP, Los Angeles, CA, for Nestor Mosqueda, et al.
Amir M. Nassihi, Shook Hardy and Bacon LLP, San Francisco, CA, Darlene M. Cho, Shook Hardy and Bacon LLP, Los Angeles, CA, for American Honda Motor Company, Inc.
Proceedings (In Chambers): ORDER RE: DEFENDANT'S MOTION TO DISMISS PLAINTIFFS' FIRST AMENDED CLASS ACTION COMPLAINT [28]
The Honorable MICHAEL W. FITZGERALD, U.S. District Judge
Before the Court is Defendant American Honda Motor Co., Inc.'s ("Honda") Motion to Dismiss Plaintiffs Nestor Mosqueda and Todd Collras's First Amended Class Action Complaint (the "Motion"), filed on October 24, 2019. (Docket No. 28). Plaintiffs filed an Opposition on December 12, 2019. (Docket No. 34). Honda filed a Reply on January 10, 2020. (Docket No. 35).
The Motion was noticed to be heard on January 27, 2020. The Court read and considered the papers on the Motion and deemed the matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78(b) ; Local Rule 7-15. The hearing was therefore VACATED and removed from the Court's calendar.
For the reasons set forth below, the Motion is GRANTED in part and DENIED in part as follows:
• GRANTED to the extent Honda challenges the nationwide claims as such.
• DENIED to the extent Honda challenges all claims for failure to identify a defect. Plaintiffs have alleged sufficient facts to plead an automated braking defect.
• DENIED as to the Third Claim for Relief based on the Song-Beverly Consumer Warranty Act and as to the Fifth Claim for Relief based on the Magnuson-Moss Warranty Act. Plaintiffs have sufficiently alleged that their vehicles are unmerchantable.
• GRANTED without leave to amend as to the Fourth Claim for Relief. Plaintiffs have not adequately alleged a breach of Honda's New Vehicle Limited Warranty.
• DENIED as to the First and Second Claims for Relief. Plaintiffs have sufficiently alleged that Honda had exclusive knowledge of the alleged defect in the braking system and they have sufficiently alleged Honda did not disclose the defect. Therefore,
Plaintiffs have sufficiently alleged the consumer fraud claims.
• GRANTED without leave to amend as to the Sixth Claim for fraudulent omission, which is barred by the economic loss rule.
• GRANTED with leave to amend to the extent Plaintiffs seek injunctive relief. Plaintiffs' allegations do not establish that there is no adequate remedy at law available.
I. BACKGROUND
Plaintiffs commenced this action on May 6, 2019. (Complaint (Docket No. 1)). The First Amended Class Action Complaint ("FAC") was filed on September 26, 2019. (Docket No. 23).
Plaintiffs represent a proposed class of all persons who purchased or leased Class Vehicles. (FAC ¶ 1). Class Vehicles are defined as 2016-2019 Honda Accords. (Id. ¶ 14).
Plaintiffs assert the following Claims for Relief: (1) violation of the Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750, et seq. ; (2) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200, et seq. ; (3) breach of implied warranty under the Song-Beverly Consumer Warranty Act, Cal. Civ. Code §§ 1792 and 1791.1, et seq. and Cal. Comm. Code § 2314 ; (4) breach of express warranty under Cal. Comm. Code § 2313 ; (5) breach of implied warranty under the Magnuson-Moss Warranty Act, 154 U.S.C. § 2301 et seq. ; and (6) fraudulent omission. (Id. ¶¶ 67-130).
The FAC alleges the following facts, which the Court takes as true and construes in the light most favorable to Plaintiffs. See, e.g., Schueneman v. Arena Pharm., Inc. , 840 F.3d 698, 704 (9th Cir. 2016) (restating generally-accepted principle that "[o]rdinarily, when we review a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), we accept a plaintiff's allegations as true ‘and construe them in the light most favorable’ to the plaintiff") (quoting Zucco Partners, LLC v. Digimarc Corp. , 552 F.3d 981, 989 (9th Cir. 2009) ).
Plaintiffs are consumers who purchased new Honda Accords with the Collision Mitigation Braking System ("CMBS") intended to "reduce the likelihood that a vehicle will collide with another vehicle or pedestrian" or "reduce the vehicle's speed to help minimize the severity of the collision." (FAC ¶¶ 7-8, 20). Plaintiffs allege that the CMBS suffers from a defect that causes the "Class Vehicles' brakes to engage at random for no reason, resulting in sudden and unexpected stopping, loss of speed and/or shuddering/jerking." (Id. ¶ 2). Specifically, during Honda's three-year, 36,000 miles New Vehicle Limited Warranty, Plaintiffs experienced improper braking and their vehicles' CMBS indicator light displayed an error message stating "Collison Mitigation Braking System Problem. See Your Dealer. " (Id. ¶¶ 8, 11) (emphasis in FAC).
Plaintiffs allege that Honda has long known that the CMBS system is dangerously defective due in large part to testing conducted by Honda before Class Vehicles were sold. (Id. ¶¶ 24-29). Despite Honda's knowledge of these defects, Honda failed to warn prospective customers of the defects and failed to offer sufficient repair services despite repeated requests. (Id. ¶ 43).
A. Plaintiff Mosqueda's Claims
In approximately July 2018, Plaintiff Nestor Mosqueda purchased a new 2018 Honda Accord from Freeway Honda in Santa Ana, California. (FAC ¶ 7). Plaintiff Mosqueda spoke with the dealer sales representative, inspected the sticker on the side of the vehicle, and test drove the vehicle. (Id. ). Sometime after he purchased the vehicle, Plaintiff Mosqueda experienced "the CMBS Defect" and brought his vehicle to Freeway Honda in October 2018 "to complain of the problems he was experiencing." (Id. ¶ 8). Freeway Honda then performed a "computer update," but Plaintiff Mosqueda's vehicle "continued to experience the CMBS defect after this visit." (Id. ).
"Approximately a month or two later," Plaintiff Mosqueda "informed Freeway Honda that he wished to trade in his vehicle" but "decided not to trade the vehicle in due to the cost." (Id. ). "Mosqueda was not offered any further repairs or servicing to remedy his CMBS problems" and believes "further repair attempts would have been futile given Defendant's steadfast refusal to acknowledge the CMBS Defect and provide an adequate remedy." (Id. ).
B. Plaintiff Collras's Claims
In approximately February 2019, Plaintiff Todd Collras purchased a 2018 Honda Accord from Keyes Honda in Sherman Oaks, California. (Id. ¶ 10). Plaintiff Collras spoke with dealership personnel about the vehicle, inspected the sticker on the side of the vehicle, and test drove the vehicle before making his purchase. (Id. ).
While driving his vehicle, Plaintiff Collras's Accord suddenly applied the brakes without warning with no vehicles or objects close by. (Id. ¶ 11). This sudden braking "occurred more frequently when he switched lanes and while making turns." (Id. ). In June 2019, "Collras brought his vehicle to Keyes Honda to complain of the problems he was experiencing." (Id. ). After an inspection, Keyes Honda "claimed that the problem was due to a dirty sensor which it cleaned" but Plaintiff Collras "continued to experience the CMBS defect." (Id. ). Like Plaintiff Mosqueda, Plaintiff Collras alleges that "further repair attempts would have been futile given Defendant's steadfast refusal to acknowledge the CMBS Defect and provide an adequate remedy." (Id. ). Plaintiff Collras's vehicle remains within the scope of Honda's New Vehicle Limited Warranty. (Id. ).
II. REQUEST FOR JUDICIAL NOTICE
In conjunction with its Motion, Honda requests that the Court take judicial notice of five documents, including information regarding Honda Accords, warranty information, and articles which are referenced in the FAC. (Request for Judicial Notice ("RJN") (Docket No. 28-5)). Honda also requests that the Court take judicial notice of an excerpt of the request for judicial notice filed by Honda in Fain v. Am. Honda Motor Co., Inc. , C.D. Cal. CV 19-02945 MWF (PJWx) on the grounds that it constitutes a court filing subject to judicial notice. (Id. ). Plaintiffs do not oppose Honda's RJN.
As a general rule, "a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion." Lee v. City of Los Angeles , 250 F.3d 668, 688 (9th Cir. 2001). An exception to this general rule exists for (1) materials that are attached to or necessarily relied upon in the complaint, and (2) matters of public record. Id. at 688–89. Relatedly, a court may take judicial notice of court filings. Reyn's Pasta Bella, LLC v. Visa USA, Inc. , 442 F.3d 741, 746 n.6 (9th Cir. 2006) (taking judicial notice of pleadings, memoranda, and other court filings).
Plaintiffs do not and cannot contest that the documents in Honda's RJN are referenced in the FAC or constitute court filings for which this Court may take judicial notice. Accordingly, Honda's RJN is GRANTED . III. LEGAL STANDARD
"Dismissal under Rule 12(b)(6) is proper when the complaint either (1) lacks a cognizable legal theory or (2) fails to allege sufficient facts to support a cognizable legal theory." Somers v. Apple, Inc. , 729 F.3d 953, 959 (9th Cir. 2013). " Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests ...." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson , 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ).
In ruling on the Motion under Rule 12(b)(6), the Court follows Twombly , Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), and their Ninth Circuit progeny. "To survive a motion to dismiss, a complaint must contain sufficient factual matter ... to ‘state a claim to relief that is plausible on its face.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). The Court must disregard allegations that are legal conclusions, even when disguised as facts. See id. at 681, 129 S.Ct. 1937 ("It is the conclusory nature of respondent's allegations, rather than their extravagantly fanciful nature, that disentitles them to the presumption of truth."); Eclectic Props. E., LLC v. Marcus & Millichap Co. , 751 F.3d 990, 996 (9th Cir. 2014). "Although ‘a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof is improbable,’ plaintiffs must include sufficient ‘factual enhancement’ to cross ‘the line between possibility and plausibility.’ " Id. at 995 (quoting Twombly , 550 U.S. at 556-57, 127 S.Ct. 1955 ) (internal citations omitted).
The Court must then determine whether, based on the allegations that remain and all reasonable inferences that may be drawn therefrom, the complaint alleges a plausible claim for relief. See Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ; Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc. , 637 F.3d 1047, 1054 (9th Cir. 2011). "Determining whether a complaint states a plausible claim for relief is ‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.’ " Ebner v. Fresh, Inc. , 838 F.3d 958, 963 (9th Cir. 2016) (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ). Where the facts as pleaded in the complaint indicate that there are two alternative explanations, only one of which would result in liability, "plaintiffs cannot offer allegations that are merely consistent with their favored explanation but are also consistent with the alternative explanation. Something more is needed, such as facts tending to exclude the possibility that the alternative explanation is true, in order to render plaintiffs' allegations plausible." Eclectic Props. , 751 F.3d at 996-97 ; see also Somers , 729 F.3d at 960.
Fraud-based allegations are governed by Rule 9(b). "Rule 9(b) demands that, when averments of fraud are made, the circumstances constituting the alleged fraud be specific enough to give defendants notice of the particular misconduct so that they can defend against the charge[.]" Vess v. Ciba-Geigy Corp. USA , 317 F.3d 1097, 1106 (9th Cir. 2003) (internal citations omitted). Under Rule 9(b), fraud allegations must include the "time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Swartz v. KPMG LLP , 476 F.3d 756, 764 (9th Cir. 2007) (citing Edwards v. Marin Park, Inc. , 356 F.3d 1058, 1066 (9th Cir. 2004) ). In other words, "[a]verments of fraud must be accompanied by ‘the who, what, when, where, and how’ of the misconduct charged." Vess , 317 F.3d at 1106. Such averments 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." Id. (quoting Bly–Magee v. California , 236 F.3d 1014, 1019 (9th Cir. 2001) ).
Whereas allegations concerning the circumstances of fraud must include the "the who, what, when, where, and how of the misconduct charged," Vess , 317 F.3d at 1106 (internal quotation marks and citations omitted), issues of "[m]alice intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). "When a claim rests on allegations of fraudulent omission ... the Rule 9(b) standard is somewhat relaxed because ‘a plaintiff cannot plead either the specific time of [an] omission or the place, as he is not alleging an act, but a failure to act.’ " Asghari v. Volkswagen Grp. of Am., Inc. , 42 F. Supp. 3d 1306, 1325 (C.D. Cal. 2013) (quoting Cirulli v. Hyundai Motor Co. , No. SACV 08-00854 AG (MLGx), 2009 WL 5788762, at *4 (C.D. Cal. June 12, 2009) ).
IV. DISCUSSION
A. Plaintiffs' Nationwide Allegations
As a preliminary matter, Honda argues that Plaintiffs cannot assert nationwide class claims under California law. (Motion at 4-11).
Under California's choice-of-law rules, "[t]he party advocating the application of a foreign state's law bears the burden of identifying the conflict between that state's law and California's law on the issue, and establishing that the foreign state has an interest in having its law applied." Pokorny v. Quixtar, Inc. , 601 F.3d 987, 995 (9th Cir. 2010) ; see also Bruno v. Eckhart Corp. , 280 F.R.D. 540, 545 (C.D. Cal. 2012) ("[T]he California Supreme Court has expressly held that California's choice-of-law analysis, also referred to as the ‘governmental interest test,’ places the burden on the defendant to show that another state's law, rather than California law, should apply to class claims.") (italics in original).
In support of its argument, Honda cites Mazza v. American Honda Motor Co. , in which the Ninth Circuit considered whether California law should apply to consumer protection claims brought by non-California plaintiffs for transactions that occurred outside of California. 666 F.3d 581 (9th Cir. 2012). The Ninth Circuit explained that "California law may only be used on a classwide basis if the interests of other states are not found to outweigh California's interest in having its law applied." Id. at 590 (internal quotation marks omitted).
To determine whether the interests of other states outweigh California's interest, courts look to a three-step government interest test:
First, the court determines whether the relevant law of each of the potentially affected jurisdictions with regard to the particular issue in question is the same or different.
Second, if there is a difference, the court examines each jurisdiction's interest in the application of its own law under the circumstances of the particular case to determine whether a true conflict exists.
Third, if the court finds that there is a true conflict, it carefully evaluates and compares the nature and strength of the interest of each jurisdiction in the application of its own law to determine which state's interest would be more impaired if its policy were subordinated to the policy of the other state, and then ultimately applies the law of the state whose interest would be more impaired if its law were not applied.
Id. (citing McCann v. Foster Wheeler LLC , 48 Cal. 4th 68, 81-82, 105 Cal. Rptr. 3d 378, 225 P.3d 516 (2010) ). With respect to the first prong, "[a] problem only arises if differences in state law are material, that is, if they make a difference in this litigation." Id.
Plaintiffs argue that this choice of law analysis is premature because "[g]iven that no discovery has been exchanged, it is unclear what, if any, differences between California's laws and other states' laws would be material to Plaintiffs' class claims." (Opposition at 7). Plaintiffs note that the Ninth Circuit in Mazza applied the choice-of-law analysis at the certification stage and cite authority to support that striking class allegations at the pleading stage is generally disfavored. Id. (citing Grodzitsky v. Am. Honda Motor Co. , 2013 WL 690822, at *10 (C.D. Cal. Feb. 19, 2013) ; Barber v. Johnson & Johnson Co. , 2017 WL 2903255, at *9 (C.D. Cal. Apr. 4, 2017) ).
The Court is unpersuaded, however, as the Ninth Circuit in Mazza determined that California's interest in applying its law to residents of foreign states was attenuated even though Honda is headquartered in California, the advertisements at issue were produced in California, and one-fifth of all proposed class members lived in California. Mazza , 666 F.3d at 590, 594.
Furthermore, "numerous district courts in this Circuit have rendered the decision to reject ... CLRA, UCL, and FAL claims in the context of a motion to dismiss where the named plaintiff purchased the defendant's product outside of California, despite the fact that Mazza was decided in relation to a motion for class certification." Schepler v. Am. Honda Motor Co. , No. CV 18-06043-GW (AFMx), 2019 WL 398000, at *6 (C.D. Cal. Jan. 29, 2019) (collecting cases).
Here, Honda has gone to great lengths to analyze and substantiate the material differences between the relevant state laws and Plaintiffs offer no substantive rebuttal. (Compare Motion at 4-9 with Opposition at 29-30). For instance, Honda highlights that consumer protection acts in Colorado, Delaware, Kentucky and several other states require scienter, but that scienter is not required under California's CLRA and UCL or the relevant consumer fraud statutes in Texas, North Carolina, and Georgia. (Motion at 4-5). Indeed, "[a]s recognized in Mazza , the other 49 states' consumer protection statutes differ significantly from California's UCL, FAL, and CLRA." Darisse v. Nest Labs, Inc. , No. 5:14-CV-01363-BLF, 2016 WL 4385849, at *9 (N.D. Cal. Aug. 15, 2016) ; see also, e.g., Davison v. Kia Motors Am., Inc. , No. 15-00239, 2015 WL 3970502, at *2 (C.D. Cal. June 29, 2015) (holding that differences in scienter and other "essential requirements to establish a claim" are material). Honda further notes that California's three-year statute of limitations for fraud claims differs markedly from other states' applicable statutes, which range from one to ten years. (Motion at 4-5).
The Court further determines that each of the states at issue here has predominant interests in having their laws applied to vehicle purchases that occurred within their borders. Darisse , 2016 WL 4385849, at *14 ("[A]ll 50 states have an interest in having their own laws applied to the consumer transactions that took place within their borders[.]").
Finally, while the Court determines that California has a significant interest in applying its laws to the consumer transactions that took place within its borders, California's interest in applying its laws to residents of other states who purchased the Class Vehicles is much more attenuated. "Indeed, California law states that ‘with respect to regulating or affecting conduct within its borders, the place of the wrong has the predominant interest.’ " Id. at *15 (quoting Hernandez v. Burger , 102 Cal. App. 3d 795, 802, 162 Cal.Rptr. 564 (1980) ). "California considers the geographic location of the omission or where the misrepresentations were communicated to the consumer as the place of the wrong." Id. And other states have a compelling interest in setting the scope of recovery for consumers under their own laws. Id. The Court thus concludes that each state at issue would be impaired in its ability to protect consumers within its borders if California law were applied to all claims of the nationwide class.
Accordingly, the Court determines that Plaintiffs may not assert nationwide claims under California law.
B. Failure to Identify a Defect
Honda next argues that all of Plaintiffs' claims should be dismissed because Plaintiffs do not adequately allege any defect in their vehicles. (Motion at 11-14). The parties primarily dispute the level of detail necessary for Plaintiffs to allege a product defect.
"The Ninth Circuit has not squarely addressed the level of detail necessary under these circumstances." DeCoteau v. FCA US LLC , No. 2:15-CV-00020-MCE (EFB), 2015 WL 6951296, at *3 (E.D. Cal. Nov. 10, 2015). "Nor is there any consensus at the district level." Id. ; see also Zuehlsdorf v. FCA US LLC , No. EDCV 18-01877-JGB, 2019 WL 2098352, at *6 (C.D. Cal. Apr. 30, 2019) (same). "Faced with divergent district court holdings, the Court looks to the general guidance provided by the Ninth Circuit." Zuehlsdorf , 2019 WL 2098352, at *6. Accordingly, "[a] complaint must ‘contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively,’ and those allegations ‘must plausibly suggest an entitlement to relief[.]’ " Id. (citing Starr v. Baca , 652 F.3d 1202, 1216 (9th Cir. 2011) ).
Here, Honda argues that Plaintiffs have failed to meet their burden because they "allege no facts as to what component(s) they think failed to work properly, let alone explain why that occurs." (Motion at 12). Plaintiffs argue that this Court should reject Honda's proposed level of heightened specificity and find that Plaintiffs are only required to generally plead the existence of a defect and the cause of said defect to survive a motion to dismiss. (Opposition at 9). Plaintiffs point to allegations in their FAC claiming that Honda's automated braking system is prone to false alarms, which in turn causes "the Class Vehicles' brakes to engage at random for no reason, resulting in sudden and unexpected stopping, loss of speed, and/or shuddering/jerking." (Id. at 8-9). Plaintiffs attribute this braking issue to "an inability to correctly process the sensor inputs" which further results in vehicles displaying the same prominent dashboard error message. (Id. at 8 (citing FAC ¶¶ 2-3, 8, 11, 22)). To further support that false alarms are caused by a defect, Plaintiffs attach numerous NHTSA complaints to the FAC concerning the same types of vehicle defects reported by Plaintiffs Mosqueda and Collras. (FAC ¶ 47, Ex. 9). While some of these NHSTA complaints pertain to different alleged defects and vehicles, several of the complaints attached to the FAC and recounted therein expressly reference the false alarms and braking problems at issue in this case. (FAC ¶ 47 (citing NHTSA ID Nos. 11002642, 11101711, 11120677, 1124024, 11048125, 11123613, 11128098)).
The Court agrees with Plaintiffs that these allegations are sufficient to plead a defect, as this Court and numerous courts considering a 12(b)(6) motion to dismiss have also determined. See, e.g., Zuehlsdorf , 2019 WL 2098352, at *6 ("[W]hile Plaintiff does not indicate how the alleged defect caused the reported symptoms, the Court finds his identification of the particular [Continuously Variable Transmission] affected ... and description of the problems allegedly caused by the defect are sufficient" to state a claim); Hardt v. Chrysler Grp. LLC , No. SACV 14-01375 SJO (VBKx), 2015 WL 12683965, at *5 (C.D. Cal. June 15, 2015) ("The Court finds that Plaintiffs' allegation that ‘the Manual Transmission contains one or more design and/or manufacturing defects,’ combined with a description of the symptoms of the alleged defect ... and the vehicle's subsequent failure to accelerate or decelerate, provides Chrysler sufficient notice of the defect at issue."); Asghari v. Volkswagen Group of America, Inc. , 42 F. Supp. 3d 1306, 1326 n.72 (C.D. Cal. 2013) (finding that plaintiffs have sufficiently identified a purported defect where the complaint alleged that the engines consumed excessive oil and quoted numerous consumer complaints concerning the oil consumption defect).
Honda's authority intended to support its argument that Plaintiffs insufficiently identify a defect is distinguishable. (Motion at 13-14 (citing Yagman v. Gen. Motors Co. , No. CV 14-04696-MWF (AGRx), 2014 WL 4177295 (C.D. Cal. Aug. 22, 2014) ; Callaghan v. BMW of N. Am., LLC , No. 13-CV-04794-JD, 2014 WL 6629254 (N.D. Cal. Nov. 21, 2014) ). As the court in Zuehlsdorf recognized, "the plaintiff in Yagman not only failed to adequately describe the defect, but failed to allege one altogether." 2019 WL 2098352, at *3. Similarly, in Callaghan , the plaintiffs alleged only that their vehicles' transmissions were "prone to premature failure" without alleging details regarding the nature of the alleged failure. 2014 WL 6629254, at *3 (noting that these "allegations never descended below this 10,000 foot level of generality, and it is impossible to discern from the allegations the specific nature of" the defect).
As shown above, Plaintiffs here have adequately stated facts showing a defect exists, unlike the plaintiffs in Yagman, Callaghan , and the remaining inapposite authority Honda relies on. Accordingly, the Court determines that Plaintiffs have adequately pleaded a defect.
C. Breach of Implied Warranty of Merchantability (Third and Fifth Claims for Relief)
Plaintiffs plead implied warranty claims under the Song-Beverly Consumer Warranty Act and the Magnuson-Moss Warranty Act. (FAC ¶¶ 96-102, 111-121). Aside from the requirement of privity discussed below, the parties appear to agree that the analysis of Plaintiffs' Magnuson-Moss claim is essentially identical to Plaintiffs' Song-Beverly claim. Clemens v. DaimlerChrysler Corp. , 534 F.3d 1017, 1022 (9th Cir. 2008) ("[T]he claims under the Magnuson–Moss Act stand or fall with [plaintiff's] express and implied warranty claims under state law... Therefore, this court's disposition of the state law warranty claims determines the disposition of the Magnuson–Moss Act claims.") (internal citations omitted). The Court, therefore, begins with analysis of Plaintiffs' breach of implied warranty claim under the Song-Beverly Consumer Warranty Act.
The Song-Beverly Consumer Warranty Act provides for an implied warranty of merchantability that the consumer goods are "fit for the ordinary purposes for which such goods are used." Cal. Civ. Code § 1791.1(a). The implied warranty of merchantability "provides for a minimum level of quality." Am. Suzuki Motor Corp. v. Superior Court , 37 Cal. App. 4th 1291, 1295-96, 44 Cal.Rptr.2d 526 (1995). "Such fitness is shown if the product is in safe condition and substantially free of defects." Brand v. Hyundai Motor America , 226 Cal. App. 4th 1538, 1546, 173 Cal. Rptr. 3d 454 (2014) (internal citation and quotation marks omitted).
First , Honda argues that Plaintiffs provide insufficient facts about the alleged defect to create an inference that their vehicles are unsafe to drive. (Motion at 22-23). In response, Plaintiffs assert that the threshold for what rises to the level of a safety hazard is low at the pleading stage and that their allegations easily satisfy that standard. (Opposition at 26-27). The Court agrees with Plaintiffs.
Plaintiffs have alleged that their vehicles applied the brakes without warning with no vehicles or objects close by and that this braking inexplicably occurred more frequently when switching lanes or making turns. (FAC ¶ 11). This allegation is sufficient to raise a question of fact for the jury as to whether the problem posed enough of a safety risk that the vehicles at issue could not be said to provide safe and reliable transportation. See e.g., Brand , 226 Cal. App. 4th at 1547, 173 Cal.Rptr.3d 454 (2014) (a reasonable jury could conclude that a vehicle sunroof that opens and closes on its own creates substantial safety hazard); Barakezyan v. BMW of N. Am. 715 F. App'x 762, 763 (9th Cir. 2018) (plaintiff has plausibly pleaded a safety hazard when he alleged that his vehicle emits loud, long, high-pitched noise that has distracted him, other drivers, and nearby pedestrians); In re MyFord Touch Consumer Litig. , 46 F. Supp. 3d 936, 980 (N.D. Cal. 2014) (claims that malfunctions in the MyFord Touch system that caused the driver to become distracted were sufficient to state a claim for breach of implied warranty).
Second , Honda argues that Plaintiffs' breach of implied warranty claim "under Cal. Comm. Code § 2314 fails for lack of privity." (Motion at 22-23). Plaintiffs admit that they lack privity with Honda but argue that they are excepted from the privity requirement as third-party beneficiaries permitted to assert breach of implied warranty claims against Honda. (Opposition at 27). Honda responds that the third-party beneficiary exception is not recognized in the context of an implied warranty claim brought under the California Commercial Code and that the Ninth Circuit's decision in Clemens is inconsistent with such an exception. (Reply at 11). Again, the Court agrees with Plaintiffs.
The Ninth Circuit in Clemens did not expressly consider the third-party beneficiary exception but dismissed an implied warranty claim for lack of privity, noting that "California courts have painstakingly established the scope of the privity requirement under California Commercial Code [§] 2314, and a federal court sitting in diversity is not free to create new exceptions to it." 534 F.3d 1017, 1024. Since Clemens , "California district courts are split on the application of the third party beneficiary exception to the rule of privity." Snyder v. TAMKO Bldg. Prod., Inc. , No. 1:15-CV-01892-TLN-KJN, 2019 WL 4747950, at *7 (E.D. Cal. Sept. 30, 2019) (citations omitted). "Some courts have declined to recognize the third-party beneficiary exception because Clemens did not expressly recognize it and refused to create any new exceptions to privity." Bhatt v. Mercedes-Benz USA, LLC , No. CV 16-03171-TJH (RAOx), 2018 WL 5094932, at *2–3 (C.D. Cal. Apr. 16, 2018) (citations omitted). But "the clear weight of authority compels a conclusion that where plaintiffs successfully plead third-party beneficiary status, they successfully plead a breach of implied warranty claim." In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prod. Liab. Litig. , 754 F. Supp. 2d 1145, 1184 (C.D. Cal. 2010) (citations omitted); see also In re MyFord Touch Consumer Litig. , 46 F. Supp. 3d at 980 ("Although Clemens , like this case, involved a plaintiff who bought a car from a dealership and then sued the manufacturer for a defect with the car, it is not clear whether the plaintiff argued for application of the third-party beneficiary exception specifically.").
While the applicability of the third-party beneficiary exception to consumers like Plaintiffs is unsettled, the Court concurs with many of the courts in the Ninth Circuit to consider the issue and determines that where a plaintiff sufficiently pleads that he or she is a third-party beneficiary to a contract that gives rise to the implied warranty of merchantability, he or she may assert a claim for the warranty's breach. Here, Plaintiffs allege that they purchased Class Vehicles from a network of authorized dealers who are Honda's agents and additional facts tending to support that they are third-party beneficiaries of Honda's implied warranty of merchantability with respect to Class Vehicles. (FAC ¶¶ 7, 10, 15, 96-102, 111-121). Hence, Plaintiffs' breach of implied warranty claim is not precluded by lack of privity.
Because Plaintiffs have sufficiently alleged that their vehicles are unmerchantable, the Motion is DENIED as to the Third and Fifth Claims for Relief.
D. Breach of Express Warranty (Fourth Claim for Relief)
Plaintiffs' express warranty claim under California Commercial Code § 2313 is based on alleged breach of Honda's New Vehicle Limited Warranty. (FAC ¶¶ 7, 10, 105, 106).
"To prevail on a breach of express warranty claim under California law, a plaintiff must prove that: (1) the seller's statements constitute an affirmation of fact or promise or a description of the goods; (2) the statements was part of the basis of the bargain; and (3) the warranty was breached. In Re ConAgra Foods, Inc. , 90 F. Supp. 3d 919, 984 (C.D. Cal. 2015). The plaintiff must allege the "exact terms of the warranty." Nabors v. Google, Inc. , No. 5:10-CV-03897 EJD PSG, 2011 WL 3861893, at *4 (N.D. Cal. Aug. 30, 2011) (citations omitted). "At the least, [the plaintiff] must identify the particular commercial or advertisement upon which he relied and must describe with the requisite particularity the content of the particular commercial or advertisement. Id. (citing Baltazar v. Apple, Inc. , CV-10-3231-JF, 2011 WL 588209, at *2 (N.D. Cal. Feb. 10, 2011) ).
The parties do not dispute that the New Vehicle Limited Warranty promises that Honda will replace or repair defective parts within the applicable period. (Motion at 21; Opposition at 28). In relevant part, the New Vehicle Limited Warranty provides that Honda "will repair or replace any part that is defective in material or workmanship under normal use." (RJN, Ex. 6 at 9).
Plaintiffs argue that Honda breached the New Vehicle Limited Warranty because "Honda knew of the CMBS defect for years, but steadfastly refused to acknowledge the problem or provide an adequate remedy." (Opposition at 28 (citing FAC ¶¶ 5, 8, 11, 28, 43)). Specifically, Plaintiffs allege that Plaintiff Mosqueda requested repair of the CMBS defect, but Honda installed an ineffective software update. (Opposition at 28). Plaintiff Mosqueda then returned to Honda to trade in his vehicle but decided against doing so because of the cost. (Id. ). Plaintiffs further allege that Plaintiff Collras "took his vehicle into a Honda dealer seeking a repair of the CMBS defect, and was told the problem was caused by a dirty sensor, which they cleaned." (Id. at 29). Plaintiff Collras sought no further repairs, alleging that any such efforts would be futile. (FAC ¶ 11).
Honda argues that the experiences of Plaintiffs Mosqueda and Collras "show compliance with the warranty, not a breach" because Honda's New Vehicle Limited Warranty does not "guarantee (or even suggest) that a dealership's initial repair attempt will resolve the issue permanently or that a follow-up service will never be necessary." (Motion at 21).
The Court determines that Plaintiffs' allegations are insufficient to support a claim that Honda breached the New Vehicle Limited Warranty. Although the FAC alleges that Plaintiffs brought their vehicles to their respective dealerships for servicing on multiple occasions, these visits do not constitute a basis for breach. As Honda notes, it "has no obligation to repair or replace parts that are never presented to it or its dealerships for warranty coverage" and Plaintiffs' FAC only details one or two repair attempts as to each Plaintiff (for instance, if the Court construes Plaintiff Mosqueda's trade-in request as an attempt to initiate a repair of the CMBS defect). (Motion at 21-22). According to the FAC, Honda did not refuse any request for repair during these visits but attempted to diagnose and remedy the problem. That the alleged CMBS defect persisted after only one or two repair attempts is insufficient to constitute breach of the New Vehicle Limited Warranty. Bros. v. Hewlett-Packard Co. , No. C-06-02254, 2006 WL 3093685, at *7 (N.D. Cal. Oct. 31, 2006) (dismissing breach of express warranty claim where plaintiff alleged manufacturer attempted to repair the product but that it later failed); Cadena v. Am. Honda Motor Co. , No. CV 18-04007 MWF (PJWx), 2018 WL 8130613, at *7 (C.D. Cal. Nov. 14, 2018) (dismissing breach of express warranty claim premised on allegation that dealer's earlier attempted repair was unsuccessful).
Accordingly, the Motion is GRANTED without leave to amend as to the Fourth Claim for Relief.
E. Fraud Claims (First, Second, and Sixth Claims)
The CLRA prohibits "unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer." Cal. Civ. Code § 1770(a). "A fraudulent omission is actionable under the CLRA if the omission is ‘of a representation actually made by the defendant, or an omission of a fact the defendant was obliged to disclose.’ " In re Toyota Motor Corp. Unintended Acceleration Mktg. , 754 F. Supp. 2d at 1172-73 (citing Daugherty v. American Honda Motor Co. , 144 Cal. App. 4th 824, 835, 51 Cal. Rptr. 3d 118 (2006) ). "To allege a duty to disclose, a plaintiff must show that the defendant (1) is in a fiduciary relationship with the plaintiff; (2) had exclusive knowledge of material facts not known to the plaintiff; (3) actively conceals a material fact from the plaintiff; or (4) makes partial representations but also suppresses some material fact." Id. (citing LiMandri v. Judkins , 52 Cal. App. 4th 326, 336, 60 Cal. Rptr. 2d 539 (1997) ). Given that the same standard applies to the UCL, the CLRA, and fraud by omission, courts often consider such claims under the fraudulent prong together. See Punian v. Gillette Co. , No. 14-CV-05028-LHK, 2016 WL 1029607, at *5 (N.D. Cal. Mar. 15, 2016) (citing cases). The Court will do so here.
Plaintiffs generally argue that Honda had a duty to disclose based on its exclusive knowledge of material facts and its active concealment. (Opposition at 11-22). Plaintiffs specifically claim that Honda had a duty to disclose the alleged defect because it had "exclusive knowledge" of the problem. (FAC ¶¶ 4, 43, 50, 71, 74, 87-91, 125-128). But a review of the FAC reveals that Plaintiffs' allegations in support of an "active concealment" theory constitute bare legal conclusions and re-cast accusations that rely solely on Plaintiffs' facts tending to support Honda's exclusive knowledge. (See, e.g. , FAC ¶ 125 ("Defendant concealed from and failed to disclose to Plaintiff and Class Members the defective nature of the Class Vehicles and their CMBS.")).
Accordingly, the Court determines that Plaintiffs have not sufficiently established Honda's duty to disclose based on active concealment and only examines whether Plaintiffs have sufficiently alleged that Honda had a duty to disclose based on its exclusive knowledge of a material fact.
1. Knowledge of a Material Fact
Under the CLRA, "plaintiffs must sufficiently allege that a defendant was aware of a defect at the time of sale to survive a motion to dismiss." Wilson v. Hewlett-Packard Co. , 668 F.3d 1136, 1145 (9th Cir. 2012).
Plaintiffs argue that Honda had knowledge of the issue because (1) it conducted extensive pre-sale testing; (2) it received warranty claims information, driver complaints, and repair data; (3) it monitors NHTSA complaints; (4) its own Safety Recall Report and Technical Service Bulletins evidence such knowledge; and (5) it sent a message to the dealers in February 2017 regarding an issue regarding the automated braking system. (Opposition at 11-19).
Of the five sources of information, Plaintiffs rely most heavily on the first one, Honda's pre-sale testing. Plaintiffs allege that Honda exposed the vehicles to lengthy and comprehensive physical testing that reveals how the vehicles and the component systems (including the CMBS) would perform over the span of many miles of driving. (FAC ¶¶ 25-29). Honda's testing also featured a test driver, who drove around various targets to see if the automated braking system reacted as intended. (Id. ). Honda described this process as "endless testing of sudden braking." (Id. ). Honda also asserted that its repeated tests made test drivers carsick after repeatedly experiencing sudden braking. (Id. ). According to Plaintiffs, Honda acknowledges that testing of Class Vehicles resulted in "failure after failure" with respect to the CMBS and argue that this testing supports that Honda had extensive knowledge regarding the alleged safety defect. (Opposition at 10 (citing NHTSA complaints)).
Honda argues that much of the testing detailed in the FAC pertains to vehicles not purchased by Plaintiffs. (Motion at 13). Honda further paraphrases articles relied on by Plaintiffs for the proposition that such testing "confirms the far more likely and logical inference: that Honda gained confidence in the system through pre-release testing..." (Id. ) (emphasis in Motion).
Although Honda cites a number of district court cases, it cites only one Ninth Circuit case addressing the issue: Wilson v. Hewlett-Packard Company. 668 F.3d 1136 (9th Cir. 2012). There, plaintiffs alleged that HP had knowledge of a defect in part because HP had access to the aggregate information and data regarding the risk of overheating and customer complaints. Id. at 1146. The court held that this allegation was not sufficient to establish knowledge. Id. In doing so, the Ninth Circuit contrasted the situation to that in Cirulli v. Hyundai Motor Co. , where the district court held that the plaintiff sufficiently pleaded knowledge based on allegations of testing data and customer complaints to be sufficient. No. SACV 08-00854 AG (MLGx), 2009 WL 5788762, at *2 (C.D. Cal. June 12, 2009). In Cirulli , the plaintiff additionally alleged that Hyundai was aware that its vehicles were "unusually vulnerable to premature oxidation and corrosion" and it "constantly tracked the National Highway Traffic Safety Administration." Id. at *4. In contrast, the plaintiffs in Wilson failed to make a similar factual showing to support an inference of knowledge. 668 F.3d at 1146-47.
The situation here appears to be closer to Cirulli than Wilson . Plaintiffs allege that Honda was aware of potential problems with the automated braking system due to its communications to dealers in February 2017. (Opposition at 14). Plaintiffs also allege that Honda: (1) "actively monitored complaints posted on NHTSA and on the Internet"; (2) "pays close attention to NHTSA safety reviews of its vehicles, which it touts on its website"; and (3) was aware of negative reviews that Plaintiffs' FAC describes in detail. (FAC ¶¶ 29, 46-47). Because Plaintiffs have provided a more robust set of allegations than those provided in Wilson , Wilson is not conclusive here.
At the district-court level, there appears to be a split among cases on whether allegations like the ones here are sufficient to establish knowledge. Compare Zuehlsdorf , 2019 WL 2098352, at *9 ("Plaintiff gives several plausible explanations of how Honda became aware of the alleged defect, including ‘pre-production testing, design failure mode analysis, calls to its customer service hotline, and customer complaints made to dealers[,]' and alleges that ‘this knowledge and information was exclusively in the possession of FCA US and its network of dealers.") with Mandani v. Volkswagen Group of Am. , No. 17-cv-07287-HSG, 2019 WL 652867, at *8 (N.D. Cal. Feb. 15, 2019) ("Plaintiffs' conclusory allegations of pre-purchase knowledge based on ‘pre-sale design and testing’ are insufficient to establish knowledge); Blissard v. FCA US LLC , No. CV 18-02765-JAK (JEMx), 2018 WL 6177295, at *13 (C.D. Cal. Nov. 9, 2018) (same).
Even if the testing data is not sufficient to allege knowledge, Plaintiffs argue that there are additional bases for inferring Honda's knowledge, as noted above. Plaintiffs allege that Honda issued a "Tech Line Article" in November 2017 concerning CMBS problems in Class Vehicles. (Opposition at 4-5). This article stated that Honda knew the vehicles were experiencing problems with the "Collision Mitigation Braking System," requests dealers' "help to collect as much vehicle data on this issue as possible," and concludes with Honda's assurance that "[w]e'll let you know when we have a solution available." (Id. at 5).
Plaintiffs persuasively argue that the communications from Honda to its dealers further support an inference of Honda's knowledge of a safety risk. Plaintiffs are further correct that such allegations evidencing an unreasonable safety risk are sufficient to establish materiality at the pleading stage. (Opposition at 5 (citing Keegan v. Am. Honda Motor Co., Inc. , 838 F. Supp. 2d 929, 944 (C.D. Cal. 2012) ). Although Honda argues that the problems detailed in the dealer communications are not the same as a sudden activation of a vehicle's brakes, both are related to the CMBS. Moreover, as Plaintiffs argue, it is plausible that a defect resulting in a vehicle shuddering and jerking is related to a defect in the CMBS causing abrupt braking. (Opposition at 15).
Taking all of Plaintiffs' allegations together, the Court concludes that Plaintiffs have sufficiently alleged Honda's knowledge of a material fact.
2. Exclusive Knowledge of the Information
Even if Plaintiffs sufficiently alleged Honda's knowledge of a material fact, Honda argues that this information was not within its exclusive knowledge, as the information was already available in the public sphere. (Motion at 18-19). Specifically, Honda notes that a website cited by Plaintiffs disclosed the alleged defect more than two years before Plaintiffs' purchases and points to additional publicly available documents, which disclosed the potential of false alarms and other issues related to the CMBS system well before Plaintiffs purchased their vehicles. (Id. ). Honda argues that it cannot be liable because "[i]nformation about the limitations of automatic braking systems like the CMBS, specifically including the possibility of false alarms, has also been publicly available from... the Owner's Manual." (Motion at 19). Honda specifically points to sections of the Owner's Manual which describe examples where the CMBS may activate "when there is no vehicle ahead." (Id. ).
Honda's arguments are not persuasive. "Generally, courts have not defined ‘exclusive’ literally, but have found such claims cognizable if the defendant had ‘superior’ knowledge of a defect that was not readily apparent and there is no or only ... limited publicly available information about the defect." Salas v. Toyota Motor Sales, U.S.A., Inc. , No. CV 15-08629 FMO, 2016 WL 7486600, at *10 (C.D. Cal. Sept. 27, 2016). Moreover, courts have routinely rejected Honda's argument that the ability of a purchaser to find complaints on the internet precludes a finding of exclusivity. See, e.g., Falk v. Gen. Motors Corp. , 496 F. Supp. 2d 1088, 1097 (N.D. Cal. 2007) ("It is true that prospective purchasers, with access to the Internet, could have read the many complaints about the failed speedometers (as quoted in the complaint).... But GM is alleged to have known a lot more about the defective speedometers, including information unavailable to the public."); Daniel v. Ford Motor Co. , No. 2:11-02890 WBS EFB, 2016 WL 2899026, at *5 (E.D. Cal. May 18, 2016) ("[T]he ability of a prospective purchaser to find complaints made to the NHTSA on the Internet does not preclude a finding of exclusivity.").
Relatedly, the owner's manual's disclosures concerning limitations and conditions of the CMBS does not, at this stage, defeat Plaintiffs' allegations regarding the defect, as it does not give sufficient notice as to what constitutes an "activation" because "activate" may simply mean the warning lights would come on, not that the car would brake itself. (See RJN, Ex. 3). Honda's argument is further belied by the fact that Plaintiffs' FAC does not allege that Plaintiffs even received the owner's manual when they purchased their vehicles, let alone that such manuals were available to Plaintiffs before said purchases. Asghari v. Volkswagen Grp. of Am., Inc. , 42 F. Supp. 3d 1306, 1328 n.74 (C.D. Cal. 2013) ("The complaint does not allege that plaintiffs received owners' manuals from defendants or otherwise had access to them prior to purchasing their vehicles.... The owners' manuals do not, therefore, disprove plaintiffs' allegations that defendants omitted and/or concealed information about [a] ... defect prior to plaintiffs' purchases of their vehicles.").
Plaintiffs have therefore sufficiently alleged that Honda had exclusive knowledge of a material fact that gave rise to its duty to disclose.
3. Economic Loss Rule
Honda argues that Plaintiffs' fraudulent omission claim fails for the additional reason that it violates California's economic loss rule. (Motion at 24).
The economic loss rule bars tort claims that merely restate contractual obligations. Aas v. Superior Court , 24 Cal. 4th 627, 643, 101 Cal. Rptr. 2d 718, 12 P.3d 1125 (2000), superseded by statute on other grounds ("A person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligation."); see also Robinson Helicopter Co. v. Dana Corp. , 34 Cal. 4th 979, 988, 22 Cal. Rptr. 3d 352, 102 P.3d 268 (2004) ("the economic loss rule prevents the law of contract and the law of tort from dissolving one into the other.") (internal quotation marks and citation omitted). The economic loss rule does not apply where the contract was induced by affirmative fraudulent misrepresentations. Robinson Helicopter Co. , 34 Cal. 4th at 989, 22 Cal.Rptr.3d 352, 102 P.3d 268.
Plaintiffs do not dispute that they solely seek to recover for economic losses but argue that Honda "failing to disclose the CMBS Defect to consumers" and "downplaying the scope of the Defect" constitute fraudulent inducement barring application of the economic loss rule. (Opposition at 26).
But Plaintiffs allege no affirmative representations made by Honda, let alone do they plead any such misrepresentation with particularity. Instead, Plaintiffs' common law fraud claim is premised on Honda's alleged "omissions" regarding the CMBS defects. (FAC ¶¶ 124-129).
The California Supreme Court in Robinson noted that the exception it created to the economic loss rule was "limited to a defendant's affirmative misrepresentations..." Robinson Helicopter Co. , 34 Cal. 4th at 989, 22 Cal.Rptr.3d 352, 102 P.3d 268. And courts construing Robinson have limited the exception to fraudulent inducement claims based on affirmative misrepresentations, not omissions. See, e.g., Hammond v. BMW of N. Am., LLC , No. CV 18-00226 DSF (MRWx), 2019 WL 2912232, at *3 (C.D. Cal. June 26, 2019) ("As Plaintiff has not alleged, or argued, that Defendant made any affirmative misrepresentations, Robinson Helicopter does not apply.") (collecting cases).
Because Plaintiffs concede that they seek only economic damages and premise their fraud claim on alleged omissions, the Court agrees with Honda that Plaintiffs' fraudulent omission claim is barred by the economic loss rule.
Accordingly, the Motion is DENIED as to the First and Second Claims for Relief and GRANTED without leave to amend as to the Sixth Claim for Relief.
F. Injunctive Relief
Under Plaintiffs' First Claim for Relief for CLRA violations, Plaintiffs seek "an order enjoining the acts and practices described above" and "any other relief that the Court deems proper under section 1780(a) of the CLRA pursuant to Civil Code Section 1782(d)..." (FAC ¶¶ 80-81). Under Plaintiffs' Second Claim for Relief pursuant to California's Unfair Competition Law, Plaintiffs allege that Honda "should be required to make restitution to Plaintiffs and Class Members pursuant to sections 17203 and 17204 of the Business & Professions Code." (Id. at ¶ 95). Plaintiffs' FAC concludes with a request for various additional forms of injunctive relief, mainly under Plaintiffs' consumer fraud claims. (Id. at ¶ 131).
Honda primarily argues that Plaintiffs have "an adequate remedy at law" and therefore are not entitled to equitable relief. (Motion at 19-20). In response, Plaintiffs point to their allegation that monetary compensation will not make Plaintiffs whole because they are "current owners or lessees who rely on their vehicles on a daily basis." (Opposition at 24 (citing FAC ¶ 51)). Plaintiffs further argue that the FAC alleging "a remedial scheme which also makes available a fix and/or warranty extension is necessary to make Class Members whole" differentiates this case from similar authority precluding prayers for equitable relief under the UCL and CLRA. (Id. at 25 (citing FAC ¶ 51)).
Aside from this vague prayer for a "remedial scheme," however, Plaintiffs' FAC does not clarify what injunctive relief Plaintiffs are seeking and fails to provide sufficient facts for this Court to determine that legal damages would not make Plaintiffs whole. While Plaintiffs are correct that the availability of monetary damages does not necessarily preclude equitable relief under the UCL and CLRA, Plaintiffs fail to address that a "plaintiff seeking equitable relief in California must establish that there is no adequate remedy at law available." Philips v. Ford Motor Co. , 2015 WL 4111448, *16 (N.D. Cal. July 7, 2015).
The Court determines that Plaintiffs' FAC fails to satisfy this minimal burden. Plaintiffs, however, are entitled to amend their deficient FAC to specifically allege the equitable relief that they are seeking and why legal relief is not adequate to address Plaintiffs' alleged harms. LaFontaine v. Mitsubishi Motors No. Am., Inc. , No. SACV 16-00943 JVS (FFMx), 2017 WL 8220705, at *7 (C.D. Cal. Feb. 23, 2017) (dismissing UCL claim without prejudice in part because plaintiff "has not plead that he does not have an adequate remedy at law..."). Because Plaintiffs have not shown that legal remedies are inadequate, the Court need not address Honda's additional arguments concerning Plaintiffs' prayer for injunctive relief.
Accordingly, Honda's Motion is GRANTED with leave to amend to the extent Plaintiffs seek injunctive relief.
V. CONCLUSION
For the foregoing reasons, the Motion is DENIED in part and GRANTED in part as follows:
• GRANTED , to the extent Honda challenges the nationwide claims as such.
• DENIED to the extent Honda challenges all claims for failure to identify a defect. Plaintiffs have alleged sufficient facts to plead an automated braking defect.
•DENIED as to the Third Claim for Relief based on the Song-Beverly Consumer Warranty Act and as to the Fifth Claim for Relief based on the Magnuson-Moss Warranty Act. Plaintiffs have sufficiently alleged that their vehicles are unmerchantable.
• GRANTED without leave to amend as to the Fourth Claim for Relief. Plaintiffs have not adequately alleged a breach of Honda's New Vehicle Limited Warranty.
• DENIED as to the First and Second Claims for Relief. Plaintiffs have sufficiently alleged that Honda had exclusive knowledge of the alleged defect in the braking system and they have sufficiently alleged Honda did not disclose the defect. Therefore, Plaintiffs have sufficiently alleged the consumer fraud claims.
• GRANTED without leave to amend as to the Sixth Claim for fraudulent omission, which is barred by the economic loss rule.
• GRANTED with leave to amend to the extent Plaintiffs seek injunctive relief. Plaintiffs' allegations do not establish that there is no adequate remedy at law available.
Plaintiffs may file a Second Amended Complaint on or before March 23, 2020 . Defendant shall file a response to the operative Complaint by April 6, 2020 . However, the Court notes that there is currently a pending Motion to Consolidate Cases, filed in Cadena v. American Honda Motor Co. , CV18-4007 MWF (PJWx), which seeks to consolidate this case with four other cases with similar factual allegations. (Docket No. 38). In light of this motion, the parties may stipulate to continue the dates to file the SAC and the date to respond in this action until the Motion to Consolidate Cases is ruled upon. However, absent such stipulation, the parties should expect to follow the deadlines stated above.
IT IS SO ORDERED.