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finding allegations that the defendant "was provided data from consumers and dealerships identifying the alleged Defect" sufficient to support an inference of knowledge
Summary of this case from Cho v. Hyundai Motor Co.Opinion
CV 19-1148 DSF (KESx)
2020-05-07
Dominique PARRISH, etc., et al., Plaintiffs, v. VOLKSWAGEN GROUP OF AMERICA, INC., Defendant.
Cody R. Padgett, Tarek H. Zohdy, Trisha Kathleen Monesi, Steven R. Weinmann, Mark A. Ozzello, Capstone Law APC, Los Angeles, CA, Amey J. Park, Pro Hac Vice, Russell D. Paul, Pro Hac Vice, Berger Montague PC, Philadelphia, PA, for Plaintiffs Dominique Parrish, Evan Wood. Cody R. Padgett, Steven R. Weinmann, Tarek H. Zohdy, Trisha Kathleen Monesi, Capstone Law APC, Los Angeles, CA, for Plaintiffs Ludwig Combrinck, Trine Utne. Homer B. Ramsey, Pro Hac Vice, Michael B. Gallub, Pro Hac Vice, Herzfeld and Rubin PC, New York, NY, Craig L. Winterman, Herzfeld and Rubin LLP, Los Angeles, CA, for Defendant.
Cody R. Padgett, Tarek H. Zohdy, Trisha Kathleen Monesi, Steven R. Weinmann, Mark A. Ozzello, Capstone Law APC, Los Angeles, CA, Amey J. Park, Pro Hac Vice, Russell D. Paul, Pro Hac Vice, Berger Montague PC, Philadelphia, PA, for Plaintiffs Dominique Parrish, Evan Wood.
Cody R. Padgett, Steven R. Weinmann, Tarek H. Zohdy, Trisha Kathleen Monesi, Capstone Law APC, Los Angeles, CA, for Plaintiffs Ludwig Combrinck, Trine Utne.
Homer B. Ramsey, Pro Hac Vice, Michael B. Gallub, Pro Hac Vice, Herzfeld and Rubin PC, New York, NY, Craig L. Winterman, Herzfeld and Rubin LLP, Los Angeles, CA, for Defendant.
Order GRANTING in Part and DENYING in Part Defendant's Motion to Dismiss (Dkts. 47, 62)
Dale S. Fischer, United States District Judge
Defendant Volkswagen Group of America, Inc. moves to dismiss the Third Amended Complaint (TAC) filed by Plaintiffs Dominique Parrish, Valerie Wood, Ludwig Combrinck, and Trine Utne in its entirety. Dkt. 62 (Mot.). Plaintiffs oppose. Dkt. 65 (Opp'n). The Court deems this matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78 ; Local Rule 7-15.
Defendant initially moved to dismiss the TAC on November 13, 2019. Dkt. 47. After briefing was complete, see Dkts. 52, 55, the Court ordered the parties to resubmit their briefing citing to appropriate state law sources, Dkt. 61. Because the parties submitted fully revised briefs, the Court refers only to the refiled briefing in this Order.
The Court also notes that in many instances the parties still failed to cite relevant and controlling state law cases, either omitting state court cases entirely or adding irrelevant cases to a string cite in an apparent effort to appease the Court. It is not the Court's role to independently research and develop answers to difficult legal questions that the parties have not adequately addressed. See Bretford Mfg., Inc. v. Smith Sys. Mfg. Corp., 419 F.3d 576, 581 (7th Cir. 2005) ("Although [plaintiff] contends that [defendant] committed the tort of unfair competition under both Illinois and Texas law, its brief does not cite any statute or decision of either state's judiciary. A reference to one federal district court's understanding of Texas law, in a treatment less than a page long, does not preserve a contention.... It is not our job to do the legal research that [the plaintiff] has omitted.").
I. BACKGROUND
Plaintiffs, who purchased or leased vehicles manufactured, marketed, distributed, and sold by Defendant, bring this action on behalf of themselves and a putative class. Dkt. 43 (TAC) ¶¶ 1, 3, 16, 24, 34, 42. Plaintiffs allege that the 2019 to present Volkswagen Jetta and the 2018 to present Volkswagen Tiguan are equipped with a defective transmission (the Transmission). Id. ¶¶ 1, 3. Specifically, Defendant "calibrated the Transmission's software to engage higher gears at insufficient speeds and insufficient revolutions per minute (‘RPMs’) and likewise programmed the torque converter to lock up at insufficient speeds and at insufficient RPMs." Id. ¶ 7. As a result of this alleged defect, "the Transmission grates, scuffs, scrapes, grinds, suffers hard and sudden shifts, delayed acceleration, hesitation, banging into gear, and ultimately suffers broken seals and oil leaks, resulting in catastrophic failure" (the Defect). Id. Each named plaintiff experienced issues allegedly caused by the Defect after purchasing or leasing his or her Volkswagen.
Parrish and Combrinck, who are California citizens that purchased or leased their vehicles in California, TAC ¶¶ 15-16, 33-34, bring claims for violation of the California Consumer Legal Remedies Act (CLRA), breach of implied warranty under the Song-Beverly Consumer Warranty Act (Song-Beverly Act), and violation of the California Unfair Competition Law (UCL). Wood, a Pennsylvania resident who purchased his vehicle in Pennsylvania, TAC ¶¶ 23-24, brings claims for violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL), breach of express warranty, and breach of implied warranty of merchantability. Utne, a Utah citizen who leased her vehicle in Utah, TAC ¶¶ 41-42, brings claims for violation of the Utah Consumer Sales Practices Act (UCSPA) and breach of implied warranty of merchantability. Plaintiffs also bring claims for breach of express and implied warranty under the Magnuson-Moss Warranty Act (MMWA) and for unjust enrichment.
The TAC alleged that Wood purchased his vehicle in "Easton, California." TAC ¶ 24. However, as Defendant points out, this is a typographical error—there is a Volkswagen dealership in Easton, Pennsylvania. Mot. at 2 n.1.
II. LEGAL STANDARD
Rule 12(b)(6) allows an attack on the pleadings for failure to state a claim on which relief can be granted. "[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint." Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per curiam). However, a court is "not bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ " Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955 ) (alteration in original) (citation omitted). A complaint must "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570, 127 S.Ct. 1955. This means that the complaint must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. There must be "sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively ... and factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
Ruling on a motion to dismiss will be "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]'—'that the pleader is entitled to relief.’ " Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 (alteration in original) (citation omitted) (quoting Fed. R. Civ. P. 8(a)(2) ).
As a general rule, leave to amend a complaint that has been dismissed should be freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when "the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986).
III. DISCUSSION
A. Violation of State Consumer Statutes (First, Sixth, and Ninth Causes of Action)
Plaintiffs bring claims under the California, Pennsylvania, and Utah consumer protection statutes. The CLRA prohibits "unfair methods of competition and unfair or deceptive acts or practices" including "[r]epresenting that goods ... have ... characteristics ... which they do not have" or "that goods ... are of a particular standard, quality, or grade, ... if they are of another." Cal. Civ. Code § 1770(a). The UTPCPL prohibits "[u]nfair methods of competition" and "unfair or deceptive acts or practices," including "[e]ngaging in any ... fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding." 73 Pa. Stat. Ann. §§ 201-3, 201-2(4)(xxi). The UCSPA prohibits any "deceptive act or practice" including "knowingly and intentionally ... indicat[ing] that the subject of a consumer transaction has sponsorship, approval, performance characteristics, accessories, uses, or benefits, if it has not" or "that the subject of a consumer transaction is of a particular standard, quality, grade, style, or model, if it is not." Utah Code Ann. § 13-11-4(2)(a)-(b).
Defendant contends these claims should be dismissed because 1) they fail to adequately allege an actionable false statement or omission and 2) they fail to adequately allege entitlement to certain remedies.
1. False Statements or Omissions
Defendant contends that Wood's UTPCPL claim fails to allege an actionable misrepresentation and all three consumer statute claims fail to allege an actionable omission.
Plaintiffs do not dispute Defendant's characterization that the CLRA (and UCL) and UCSPA "claims are premised solely upon alleged failure to disclose." Mot. at 8 n.3.
a. Misrepresentations
Wood alleges that Defendant violated the UTPCPL, in part, "by marketing its vehicles as safe, reliable, easily operable, efficient, and of high quality." FAC ¶ 293. Defendant argues that the terms "safe," "reliable," "easily operable," and "high quality," are "non-actionable puffery that cannot support a claim of misrepresentation or deceptive conduct under the UTPCPL." Mot. at 8. Defendant is correct that puffery is non-actionable under the UTPCPL, but Defendant fails to address Commonwealth by Shapiro v. Golden Gate Nat'l Senior Care LLC, 648 Pa. 604, 194 A.3d 1010 (2018), the Pennsylvania Supreme Court case that held that "whether a statement is deemed puffery is a question of fact to be resolved by the finder of fact except in the unusual case where the answer is so clear that it may be decided as a matter of law." Id. at 626, 194 A.3d 1010. "Determination of whether a statement is puffery requires consideration of the overall impression of the statement and the context in which it is made." Id. at 627, 194 A.3d 1010. Without having the specific advertisements before it, the Court cannot conclude that the alleged marketing statements are puffery as a matter of Pennsylvania law.
The cases cited by Defendant all pre-date Golden Gate Nat'l Senior Care, which constituted a change in the law. For example, Fusco v. Uber Techs., Inc., No. CV 17-00036, 2018 WL 3618232 (E.D. Pa. July 27, 2018) relied on the lower court decision in Golden Gate Nat'l Senior Care, which the Supreme Court reversed, in holding that "[w]hether a statement is puffery is a legal question that may be determined from the allegations in the complaint." Id. at *5 (citing Commonwealth v. Golden Gate Nat'l Senior Care LLC, 158 A.3d 203, 216 (Pa. Commw. Ct. 2017) ). It is troubling that Defendant failed to find – or at least failed to cite – the Pennsylvania Supreme Court pronouncement on this topic. Further failure to advise the Court of binding precedent that questions or contradicts the cases cited by Defendant will result in sanctions.
Defendant also argues that even if those statements are not puffery, Wood has failed to plead justifiable reliance. Mot. at 9 (citing Yocca v. Pittsburgh Steelers Sports, Inc., 578 Pa. 479, 501, 854 A.2d 425 (2004) ). The Court agrees. Here, Wood has alleged that "[b]efore making his purchase, [he] watched television ads, visited Defendant's website to research the 2019 Jetta, ... test drove his vehicle with a dealership salesperson[,] ... and even spoke with the service manager of Young Volkswagen, Inc. who recommended the vehicle." TAC ¶ 26. However, it is not clear from the TAC whether any of these sources provided the alleged misrepresentations regarding safety or reliability or even what those alleged misrepresentations were. For example, simply recommending the vehicle, without more, is not an actionable misstatement. Plaintiffs contend that under certain circumstances, reliance can be presumed. Opp'n at 15 (quoting Wilson v. Parisi, 549 F. Supp. 2d 637, 668 (M.D. Pa. 2008) ). While this may be true for UTPCPL claims based on omissions, see Zwiercan v. Gen. Motors Corp., 58 Pa. D. & C.4th 251 (Com. Pl. 2002) ("where ... a [p]laintiff can demonstrate that they would not have purchased a product had they been aware of the defect, reliance on the defendant's omission can be presumed"), Plaintiffs do not provide any authority that the same is true for a claim based on a misrepresentation. Therefore, Wood has failed to adequately allege a UTPCPL claim based on any affirmative misrepresentations.
The Sixth Cause of Action, to the extent it is based on affirmative misrepresentations, is DISMISSED with leave to amend.
b. Omissions
Plaintiffs' consumer fraud claims are based primarily on alleged fraudulent omissions. See, e.g., FAC ¶¶ 224, 228, 290, 293, 348; see also Opp'n at 14 ("[T]he heart of Plaintiff Wood's UTPCPL claim is a failure to disclose under the UTPCPL's catchall provision that proscribes ‘any other fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding.’ " (quoting 73 P.S. § 201-2(4)(xxi) )). Defendant contends that it could not have failed to disclose any information it did not know, and Plaintiffs have failed to "adequately plead that defendant had pre-sale knowledge of the same ‘defect’ alleged by Plaintiffs." Mot. at 9-10; see also Dkt. 66 (Reply) at 7 n.2. "The Twombly plausibility standard ... does not prevent a plaintiff from pleading facts alleged upon information and belief where the facts are peculiarly within the possession and control of the defendant." Park v. Thompson, 851 F.3d 910, 928 (9th Cir. 2017) (alteration in original) (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010) ). Even for fraud-based claims, heightened pleading does not apply to allegations regarding a defendant's knowledge or state of mind. Fed. R. Civ. P. 9(b) ("Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally"); cf. Odom v. Microsoft Corp., 486 F.3d 541, 554 (9th Cir. 2007) (where a plaintiff must make "a showing of the defendants' state of mind, general rather than particularized allegations are sufficient.").
Defendant does not address whether it had a duty to disclose any alleged defect under California, Pennsylvania, or Utah law, instead relying solely on the fact that Plaintiffs have not adequately alleged it knew about the Defect prior to Plaintiffs' purchases or leases.
Customer Complaints. Plaintiffs allege the existence of more than 100 complaints to the National Highway Traffic Safety Administration (NHTSA) between March 28, 2018 and October 7, 2019, TAC ¶¶ 64-163, 171-181, and other complaints posted on third-party websites, id. ¶¶ 183-197. Defendant contends these complaints are not sufficient because 1) most of them are dated after Plaintiffs purchased or leased their vehicles, 2) they are not all complaining about the same defect, and 3) they were not made directly to Defendant. Mot. at 11-14.
Defendant's repeated characterization of these complaints as "anonymous hearsay" is not compelling—the rules of evidence do not apply to the facts alleged on a motion to dismiss.
First, the Court addresses the number of pre-sale complaints. Parrish purchased a 2019 Jetta on May 18, 2018, TAC ¶16, and Combrinck leased a 2018 Tiguan on May 30, 2018, id. ¶ 34. Only one complaint contained in the TAC was posted before Parrish's purchase and Combrinck's lease. See id. ¶ 64. Wood purchased a 2019 Jetta on January 1, 2019, id. ¶ 24, and Utne leased a 2019 Tiguan on February 23, 2019, id. ¶ 42. About 30 complaints in the TAC pre-dated Wood's purchase and more than 40 complaints pre-dated Utne's lease. See TAC ¶¶ 64-85, 102-120.
Defendant contends that the number of complaints that pre-date the vehicle purchases or leases is not sufficiently high to constitute "knowledge," particularly where the complaints "do not share the same claimed issues." Mot. at 11-12. Relying on the Ninth Circuit's decision in Williams v. Yamaha Motor Co., 851 F.3d 1015 (9th Cir. 2017), Defendant contends that "pleading pre-sale knowledge by consumer complaints requires an ‘unusually high level[ ]’ of complaints along with other plausible facts to show that the company ‘itself saw this number as significant and beyond the norm.’ " Mot. at 11-12 (quoting Williams, 851 F.3d at 1027 & n.8.). This overstates Williams. In Williams, the Ninth Circuit held that the allegations of 40 to 50 complaints and the setting up of an internal complaint-tracking system was sufficient at the motion to dismiss stage and "provide[d] an even stronger basis for finding presale knowledge" than cases like Cirulli v. Hyundai Motor Co., No. SACV 08-0854 AG MLGX, 2009 WL 5788762, at *1 (C.D. Cal. June 12, 2009), which relied on complaints to the National Highway Traffic Safety Administration in the five years after plaintiff purchased his vehicle. 851 F.3d at 1027. It did not hold that allegations of a certain number of complaints was required, only that what was alleged was sufficient. In addition, the complaint in Williams "gave at least approximate timing for the complaints," but there is no indication that all 40 to 50 complaints were made before plaintiffs' purchases. Id. Therefore, Williams does not stand for the proposition that there must have been an unusually high number of complaints prior to a plaintiff's purchase to raise the inference of pre-sale knowledge.
On the other end of the spectrum, the Ninth Circuit held that twelve undated complaints and two complaints that post-dated the plaintiff's purchase by two years were not sufficient. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1148 (9th Cir. 2012). In Wilson, there were no pre-sale complaints to consider, and the post-sale complaints were years after the sale. The Court does not interpret Williams and Wilson to require an "unusually high level" of pre-sale complaints to survive a motion to dismiss. Other district courts have held that two or three pre-sale complaints were sufficient. See, e.g., Borkman v. BMW of N. Am., LLC, No. CV 16-2225 FMO (MRWx), 2017 WL 4082420, at *5 (C.D. Cal. Aug. 28, 2017) (finding allegations sufficient where "three complaints pre-date plaintiff's purchase of her vehicle"); Myers v. BMW of N. Am., LLC, No. 16-CV-00412-WHO, 2016 WL 5897740, at *4 (N.D. Cal. Oct. 11, 2016) (finding allegations sufficient where "two of these complaints are dated prior to the time Meyers must have purchased her car"); but see Fisher v. Honda N. Am., Inc., No. LA CV13-09285 JAK, 2014 WL 2808188, at *5 (C.D. Cal. June 12, 2014) ("It is not plausible to suggest that [defendant] was on notice of the defect ‘at the time of sale’ based on one customer complaint" (citing Wilson, 668 F.3d at 1147-48 )).
Relatedly, Defendant asserts that one, or even 29 or 40 complaints, cannot be an "unusually high level" of complaints when there are thousands of potential class vehicles. Mot. at 12. But the TAC need not include every single complaint. Plaintiff has alleged that there was a "disproportionate number of ... complaints" about the Defect and that the complaints were consistent. TAC ¶ 169. Together with the 100-plus complaints that Plaintiffs did include, this allegation is sufficient.
Next the Court addresses Defendant's challenge to the content of the pre-sale complaints. Defendant contends that the complaints that do pre-date the sale or lease of the Plaintiffs' vehicles are not sufficiently similar to imply knowledge of the Defect. Mot. at 11 & n.7, 12. For example, the one complaint that pre-dated Parrish's purchase and Combrinck's lease identified that "the transmission is jerking" in the 2018 Tiguan. TAC ¶ 64. Defendant argues this complaint is insufficient as to Parrish because 1) he had a Jetta, not a Tiguan, and 2) he brought his vehicle in because of a "coffee grinder noise" coming from the transmission, id. ¶ 20, not because the transmission was jerking. These distinctions miss the point. If a consumer complaint that the transmission was jerking caused Defendant to learn of the Defect with the Transmission, it does not matter that Parrish had a different vehicle model or complained about a noise rather than a jerking. If Defendant knew of the Defect with Parrish's vehicle's transmission prior to the sale, that is sufficient.
Defendant does not critique the complaint's relevance to Combrinck who had a Tiguan and brought his vehicle in for repair in part because of a "hard shift" between gears, although it notes that Combrinck had other issues not addressed by this complaint, including a noise and an oil leak. Mot. at 13; see also TAC ¶ 38. Wood and Utne also complained about issues relating to the transmission and changing gears or speeds. Id. ¶¶ 28-30 (Wood initially complained of a "growl noise" and on his third trip to the dealership also complained that the "transmission was up shifting into too high of a gear and you have to put [t]he foot to the floor to make the car accelerate."); Id. ¶ 47 (Utne complained that her transmission was having issues and that there was a "one or t[w]o second delay before [the] car accelerates."). And as to the other complaints, Defendant acknowledges that "22 of the 41 complaints that pre-date Plaintiff Utne's lease mention delayed acceleration/hesitation" and "seven of the 29 complaints that pre-date Plaintiff Wood's purchase mention any grinding noise, and ... one mentions ‘shifting into too high of a gear.’ " Mot. at 13.
Defendant contends that the differing claimed issues "do not establish the existence of any uniform systemic ‘defect’ shared by all Plaintiffs' and putative class vehicles." Mot. at 11. Plaintiffs contend that they have alleged a uniform Defect with the Transmission that caused each of the "symptoms" identified in the complaints and that the complaints were varied because "different drivers may emphasize different symptoms when reporting the defect to NHTSA and VW, and, of course, different symptoms may manifest themselves at different times." Opp'n at 9 (citing TAC ¶ 7). Specifically, Plaintiffs allege the Defect was caused when Defendant "calibrated the Transmission's software to engage higher gears at insufficient speeds and insufficient revolutions per minute (‘RPMs’) and likewise programmed the torque converter to lock up at insufficient speeds and at insufficient RPMs." TAC ¶ 7. This programing is alleged to have stressed the torque converter which results in a Transmission that "grates, scuffs, scrapes, grinds, suffers hard and sudden shifts, delayed acceleration, hesitation, banging into gear, and ultimately suffers [from] broken seals and oil leaks, resulting in catastrophic failure." Id.; see also id. ¶ 62. Because Plaintiffs allege that the Defect affects the Transmission in the Tiguan and the Jetta, and because they allege that the Defect causes both noises and issues with acceleration, it does not negate an inference of knowledge that each complaint does not cite exactly the same thing. At this stage, the Court must accept Plaintiffs' allegations that the same Defect caused each of the symptoms described in the complaints as true.
Defendant cites to Victorino v. FCA US LLC, No. 16CV1617-GPC(JLB), 2018 WL 1083395, at *8 (S.D. Cal. Feb. 27, 2018), on reconsideration, No. 16CV1617-GPC(JLB), 2018 WL 2149223 (S.D. Cal. May 10, 2018) as holding that "the defendant must have knowledge of the specific defect alleged, not a general defect." Mot. as 12. In Victorino, the district court decided on summary judgment, not at the motion to dismiss stage, that where the warranty claims concerning the defective part "deal with a number of different root causes," the supporting "documents do not provide Defendants notice concerning the specific defects of the slave cylinder being bathed in leaching plasticizer by the reservoir hose or an issue with the plastic base used for the CSC." 2018 WL 1083395 at *9. Plaintiffs allege the opposite is happening here. There is one root cause that leads to differing symptoms. While Plaintiffs' claims may ultimately be incorrect, the Court assumes they are true for purposes of this motion.
Victorino did cite to a district court case dealing with a motion to dismiss. In Sloan v. Gen. Motors LLC, No. 16-CV-07244-EMC, 2017 WL 3283998 (N.D. Cal. Aug. 1, 2017), the district court held that "81 consumer complaints to NHTSA and consumer forums about excessive oil consumption and consequential engine damage" were insufficient to raise the inference of pre-sale knowledge because "none of the complaints explicitly states that the cause of the excessive oil consumption was the Low-Tension Oil Ring Defect." Id. at *7. It is hardly surprising that a lay person's complaint would not "explicitly state[ ]" the technical cause of the issues he or she is having with his or her car. That simply cannot be the standard of what is required to allege pre-sale knowledge. Additionally, the Plaintiffs here have also alleged that Defendant conducted testing "in response to those consumer complaints" and thereby did or should have discovered the Defect, TAC ¶ 199, even if the complaints themselves did not specifically identify the Defect.
Additionally, much of the reasoning on this issue in Victorino was redacted.
Finally, the Court addresses the recipient of the pre-sale complaints. Defendant contends that "[t]here are no pleaded facts establishing that any such complaints were received or viewed by Defendant." Mot. at 11. It is not necessary for the complaints to have been made directly to Defendant. In Cirulli, 2009 WL 5788762, cited with approval by Wilson, 668 F.3d at 1146, the district court held it was sufficient to allege that the defendant "constantly tracked the National Highway Traffic Safety Administration ... database to track reports of defective Sonata sub-frames." Id. at *4 (alteration in original); see also Myers v. BMW of N. Am., LLC, No. 16-CV-00412-WHO, 2016 WL 5897740, at *4 (N.D. Cal. Oct. 11, 2016) ("[I]t is reasonable to infer that BMW has knowledge of and is aware of the complaints submitted by consumers to the NHTSA"). Plaintiffs make similar allegations here. See TAC ¶¶ 168-169 ("automakers monitor NHTSA databases for consumer complaints regarding their automobiles as part of their ongoing obligation to identify potential defects in their vehicles" and therefore Defendant "knew or should have known of the many complaints about the Transmission Defect.").
Defendant cites Cadena v. Am. Honda Motor Co., No. CV 18-4007-MWF (PJWx), 2019 WL 3059931 (C.D. Cal. May 29, 2019), which suggested that a plaintiff must allege not only that defendant "had a legal obligation to track these complaints" but that defendant " in fact complied with this alleged obligation." Id. at *12. But without the benefit of discovery, Plaintiffs cannot know whether Defendant "in fact" reviewed the complaints on the NHTSA, and a complaint must only allege facts "that allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. The TAC does this. In any event, some of the cited complaints stated that the consumer was going to, or did, contact Defendant directly. See, e.g., TAC ¶¶ 66, 73, 90, 109, 111, 117, 138. And the TAC additionally alleges that there were "calls to [Defendant's] customer service hotline[ ] and customer complaints made to dealers." Id. ¶ 11.
Defendant notes that these comments "post-date Parrish and Combrinck's lease/purchase." Reply at 6 n.1. However, Plaintiffs need only allege facts sufficient to raise the inference that Defendant was aware of the complaints. That consumers who posted complaints on public sites also contacted Defendant supports the inference that consumers who complained prior to Parrish and Combrinck's purchase and lease also complained directly to Defendant.
Testing and Data. Plaintiffs allege the Defendant conducted pre-release testing and additional testing in response to consumer complaints and had access to data from dealerships about the problem, including the "inordinately high volume of replacement part sales." TAC ¶ 199. Specifically, Defendant "conducts tests, including pre-sale durability testing, on incoming components, including the Transmission, to verify the parts are free from defect and align with [Defendant's] specifications" and "collects and analyzes field data including, but not limited to, repair requests made at dealerships, technical reports prepared by engineers who have reviewed vehicles for which warranty coverage is being requested, parts sales reports, and warranty claims data." Id. ¶¶ 200-01. Defendant argues that these allegations are insufficient, relying on Grodzitsky v. Am. Honda Motor Co., No. 2:12-CV-1142-SVW-PLA, 2013 WL 690822 (C.D. Cal. Feb. 19, 2013), which held that the plaintiffs had failed to adequately allege knowledge based on similar allegations. Id. at *6. In Grodzitsky, the plaintiffs alleged that knowledge of the defect could be inferred because of "pre-release testing data, early consumer complaints to Honda and dealers, testing done in response to complaints, replacement part sales data, aggregate data from Honda dealers, and other internal sources" as well as "online complaints and their allegation that customers ‘communicated their dissatisfaction directly to Honda, Honda dealerships, or Honda Service Centers.’ " Id. The district court likened the allegations of pre-release testing data and aggregate data from Honda dealers to the aggregate data rejected as insufficient in Wilson. The Court respectfully disagrees with this comparison. In Wilson, the plaintiffs alleged that defendant "had ‘access to the aggregate information and data regarding the risk of overheating.’ " 668 F.3d at 1147. The court found this allegation to be insufficient because it did not "suggest how any tests or information could have alerted [defendant] to the defect." Id. The court then distinguished the adequate allegations in Falk v. Gen. Motors Corp., 496 F. Supp. 2d 1088 (N.D. Cal. 2007) that "[o]nly GM had access to the aggregate data from its dealers[,] only GM had access to pre-release testing data[, and] only GM had access to the numerous complaints from its customers." Id. (alterations in original). Unlike in Wilson, and like Falk and Grodzitsky, the allegations here go beyond general data that is not tied to the defendant. Plaintiffs allege that the Defendant was provided data from consumers and dealerships identifying the alleged Defect.
As another district court has recognized, the existence of a Technical Tip (TT) or Technical Service Bulletin (TSB) lends additional factual support to allegations about testing and review of aggregate data. See Majdipour v. Jaguar Land Rover N. Am., LLC, No. 2:12-CV-07849 WHW, 2013 WL 5574626, at *18 (D.N.J. Oct. 9, 2013) ("[T]he TSB ... supports Plaintiffs' allegations that [defendant] engaged in internal testing and otherwise maintained internal sources of aggregate information about the problem.").
For the same reason, the Court finds unpersuasive the other case cited by Defendant. See Blissard v. FCA US LLC, No. LA CV18-02765 JAK (JEMx), 2018 WL 6177295, *13 (C.D. Cal. Nov. 9, 2018) (reaching a similar conclusion as Grodzitsky based on its interpretation of Wilson and holding that allegations of knowledge based on "pre-sale testing" and internal records was insufficient as speculative).
The court in Grodzitsky later found plaintiffs had sufficiently alleged pre-sale knowledge in their amended complaint by adding allegations that defendant "monitored NHSTA databases as ‘part of their ongoing obligation to identify potential defects in their vehicles’ " and including a sample of complaints made to NHSTA. Grodzitsky v. Am. Honda Motor Co., No. 2:12-CV-1142-SVW-PLA, 2013 WL 2631326, at *6 (C.D. Cal. June 12, 2013) (Grodzitsky II ). Like in Grodzitsky II, here Plaintiffs' allegations consist of complaints, testing, and dealer data.
Technical Tip. Plaintiffs allege Defendant released a Technical Tip (TT) on October 26, 2018 that states:
Scraping, grating or scuffing noise from between the engine and transmission when at lower speeds in higher gears. Commonly heard when shifting into 5th gear at speeds of 20-25 mph, under light load. Noise can be heard in most gear changes under the right conditions.
TAC ¶ 166. The TT noted that this was a "normal operating characteristic of the torque converter stator as the torque clutch is applied" and "[n]o actual repairs were suggested or allowed." Id. ¶ 167. Defendant contends that 1) the TT is not informative as to Combrinck's and Utne's Tiguan vehicles because it applies only to Jetta vehicles and addresses an issue different from that complained of by Utne and Combrinck and 2) the TT is not informative as to Parrish's vehicle because it was issued after purchase. Mot. at 14-15. First, for the reasons stated above, the Court does not find it material that the TT addressed only Jetta vehicles while some Plaintiffs have Tiguan vehicles because Plaintiffs allege both models had the same Defect with the same Transmission. See MacDonald v. Ford Motor Co., 37 F. Supp. 3d 1087, 1093 (N.D. Cal. 2014) ("Although the first TSB related only to the 2005 Ford Escape Hybrids, it is plausible that Ford knew of the defect in other model years because Plaintiffs allege the allegedly defective part in their vehicles is the same."); Majdipour, 2013 WL 5574626, at *18 (Although "the TSB, by its terms, only applies to vehicles through model year 2004," it is relevant because plaintiffs "allege that all vehicles for model years 2003 through 2006 contain the same Defect.").
Second, Defendant cites to Mandani v. Volkswagen Grp. of Am., Inc., No. 17-CV-07287-HSG, 2019 WL 652867 (N.D. Cal. Feb. 15, 2019), which held that a TSB "which only noted ‘[c]lacking or knocking noises directly after a load change’ " was not sufficient to allege pre-sale knowledge for a plaintiff who "has claimed that his car began ‘bucking and jerking.’ " Id. at *7 (alteration in original); see also Granillo v. FCA US LLC, No. CV 16-153 (FLW)(DEA), 2016 WL 9405772, at *9 (D.N.J. Aug. 29, 2016) ("[E]ven though some of the symptoms described in the TSBs are similar to those experienced by Plaintiffs, Plaintiffs have failed to allege facts indicating that the software defects addressed in the TSBs are related to the alleged Transmission Defect they experienced."). Here, however, as explained above, Plaintiffs have alleged that both the noises and the shifting and acceleration issues were caused by the Defect and that Defendant knew that fact but purposefully concealed it in the TT, instead stating the noise was "normal." See TAC ¶¶ 7, 10; see also Opp'n at 10 ("Plaintiffs plead the mechanical details regarding how the defect occurs and why scraping and grinding noises are among its symptoms, and therefore why VW's TSB identifying those grinding and scraping noises supports VW's knowledge of the Transmission Defect."). Additionally, the complaints included in the TAC noted that customers "experience the grinding noise and delayed hesitation in tandem." Opp'n at 9-10 (citing TAC ¶ 181). And Plaintiffs allege that before releasing the TT, Defendant "received numerous reports regarding the Transmission Defect" and conducted "testing ... in response to those consumer complaints. Id. ¶¶ 199, 201. Accepting all of these allegations as true, one plausible inference that can be drawn from the TT is that Defendant knew of the Defect with the Transmission, specifically that the Transmission "engage[s] higher gears at insufficient speeds ... and likewise ... the torque converter ... lock[s] up at insufficient speeds," leading to "stress in the torque converter which causes noises, hard and sudden shifts, and delayed acceleration," id. ¶7, because it knew that a "[s]craping, grating or scuffing noise" came "from between the engine and transmission when at lower speeds in higher gears," and was a "characteristic of the torque converter stator as the torque clutch is applied," id. ¶¶ 166-67. The TT identified an issue (noises) with the torque converter at lower speeds and higher gears. Plaintiffs allege an issue (noises, hard shifts, delayed acceleration) with the torque converter at lower speeds and higher gears. That the torque converter caused a noise or scraping sound sufficiently concerning for Defendant to investigate and then release the TT plausibly raises the inference that Defendant was aware of the Defect, even if the TT described only one of the issues that results from that Defect.
Defendant contends that because the TT stated the noise was "normal," it could not establish knowledge of a defect. Mot. at 15 (citing Blissard, 2018 WL 6177295, at *13 (holding that the STAR Case Reports "demonstrate awareness of a build-up of sludge in the heater system, but there is no indication in these reports that [the defendant] knew that the cause of such build-up was manufacturer-installed coolant")). In Blissard, the court found that the identification of the symptom without identification of the cause was insufficient "[i]n the absence of other information from which an inference of knowledge can be drawn." 2018 WL 6177295, at *13. There, there were no complaints that pre-dated one of the plaintiff's purchases and the court found the testing allegations to be speculative. Id. Here, however, there are additional allegations that, taken together, support an inference of knowledge. Further, other district courts have found that a defendant's assertion that the cause of a symptom was an entirely unrelated defect should not negate pre-sale knowledge at the pleading stage. See McCarthy v. Toyota Motor Corp., No. 8:18-CV-00201-JLS-KES, 2019 WL 3220579, at *4 (C.D. Cal. Apr. 9, 2019) (holding that even where Defendant has stated a defect had one cause unrelated to a plaintiff's claims, plaintiff's allegations of an alternative cause common to the class vehicles and the previously discovered defect can support pre-sale knowledge at the pleading stage).
The district court in Hardt v. Chrysler Grp. LLC, No. SACV 14-01375 SJO (VBKx), 2015 WL 12683963 (C.D. Cal. Mar. 16, 2015), cited by Plaintiffs, reached a similar conclusion. In Hardt v. Chrysler had issued a TSB for the Dodge Journey, noting that the customers " ‘may experience the clutch pedal going to full travel (to the floor)’ and adds that this condition ‘may be caused by the hydraulic clutch damper (‘damper’) leaking fluid.’ " Id. at *5. The court found this sufficient to allege pre-sale knowledge where "[o]ne plausible inference that can be drawn from the TSB is that Chrysler knew of the problems affecting the Class Vehicles equipped with the Manual Transmission because the Dodge Journeys featuring the same Manual Transmission experienced the same or very similar problems affecting the clutch pedal." Id. Even though the complaint also alleged "that the Transmission Defect caused drivability and safety issues that go beyond the clutch pedal falling to the floor, ... the TSB indicates that the Dodge Journey and the Class Vehicles, which Plaintiffs allege have the same Manual Transmission, were both affected by problems with the clutch pedal being inoperative or falling to the floor." Id.
Third, as to timing, the TT was released five months after Parrish purchased his vehicle. Although Defendant cites a New Jersey district court case holding that "TSBs issued after Plaintiffs purchased their vehicles do not indicate that Defendant had pre-sale knowledge of the content of those TSBs," Granillo v. FCA US LLC, No. CV 16-153 (FLW)(DEA), 2016 WL 9405772, at *9 (D.N.J. Aug. 29, 2016), other courts have reasonably assumed that the manufacturer knew of the defect before the TSB was released. In Falco v. Nissan N. Am. Inc., No. CV 13-00686 DDP MANX, 2013 WL 5575065 (C.D. Cal. Oct. 10, 2013), for example, the court held that a 2007 TSB and a 2006 or 2007 redesign of the allegedly defective part "permit plausible inferences that [the defendant] was aware of the defect at the time they sold the vehicles in 2005 and 2006 and that [the defendant] acquired this knowledge through the sorts of internal data Plaintiffs allege." 2013 WL 5575065, at *6. In MacDonald, the court found knowledge was sufficiently alleged where there was a pre-sale TSB relating to another vehicle with the same allegedly defective part and post-sale TSBs "issued only five and nine months after the last relevant purchase in this case, and less than two years after the first purchase." 37 F. Supp. 3d at 1094. Because a manufacturer must receive complaints or data raising an issue and then must investigate the issue before issuing a TT or TSB, it is reasonable to infer that manufacturers know of the issue prior to the release of the TT or TSB. The Court finds a five-month period between knowledge of the Defect and release of the TT to be plausible at this stage.
Taken together, the Court finds that a sampling of more than 100 complaints, some of which describe contacts directly with Defendant, in combination with Plaintiffs' additional allegations regarding testing, aggregate data, and the TT permit a reasonable inference of pre-sale knowledge. See In re MyFord Touch Consumer Litig., 46 F. Supp. 3d 936, 958 (N.D. Cal. 2014) (court can reasonably infer existence of defendant's knowledge of consumer complaints where there was a TSB issued a few months after the rollout of the allegedly defective product, where there were NHTSA complaints, and where plaintiffs "began taking in their cars for servicing almost immediately"); Mui Ho v. Toyota Motor Corp., 931 F. Supp. 2d 987, 998 (N.D. Cal. 2013) (finding sufficient allegations that "Defendants had non-public, internal data about the Class Vehicles' headlamp problems, including ‘pre-release testing data, early consumer complaints about the defect to Defendants' dealers who are their agents for vehicle repairs, dealership repair orders, testing conducted in response to those complaints, and other internal sources.’ "); Price v. Kawasaki Motors Corp., USA, No. SACV 10-01074-JVS, 2011 WL 10948588, at *5 (C.D. Cal. Jan. 24, 2011) (plaintiffs sufficiently alleged pre-sale knowledge based on "internal research, receipt of consumer complaints, knowledge of lawsuits, and information from dealers.").
Defendant's motion to dismiss the First, Sixth, and Ninth Causes of Action based on fraudulent or deceptive omissions is DENIED.
2. Remedies
a. Damages
Defendant contends that Combrinck's CLRA claim for damages "must be dismissed for failure to comply with the CLRA's notice requirement." Mot. at 6. The CLRA requires plaintiffs to provide notice and a demand for repair "[t]hirty days or more prior to the commencement of an action for damages." Cal. Civ. Code § 1782(a). "That requirement exists in order to allow a defendant to avoid liability for damages if the defendant corrects the alleged wrongs within 30 days after notice, or indicates within that 30-day period that it will correct those wrongs within a reasonable time." Morgan v. AT&T Wireless Servs., Inc., 177 Cal. App. 4th 1235, 1261, 99 Cal.Rptr.3d 768 (2009). Therefore, where "a damages claim is filed without the requisite notice ... the claim must simply be dismissed until 30 days or more after the plaintiff complies with the notice requirements." Id.
Plaintiffs allege that they provided "Defendant with notice of its violations of the CLRA pursuant to California Civil Code § 1782(a)." TAC ¶ 235. Defendant requests judicial notice of the two pre-suit letters sent on behalf of Parrish and Combrinck. Dkt. 63 (RJN); Dkt. 64-3 (Parrish Letter); Dkt. 64-4 (Combrinck Letter). The Court grants Defendant's unopposed request. Fed. R. Evid. 201(b)(2). The Parrish Letter is dated Mary 22, 2019 and notifies Defendant that the "Seventh Generation (A7) Volkswagen Jetta" is "equipped with a defective transmission that poses a public safety risk." Id. at 1. The Combrinck Letter is dated October 1, 2019 and notifies Defendant that "Volkswagen Tiguan vehicles equipped with an Aisin AWF8F35 8-Speed Automatic Transmission ... are equipped with a defective transmission that poses a public safety risk." Id. at 1.
First, Plaintiffs contend the Parrish Letter was sent "on behalf of a class of individuals with the same transmission, so Combrinck (and class members) were entitled to state CLRA damages claims as of June 2019." Opp'n at 1-2. Defendant contends the Parrish Letter is insufficient notice of Combrinck's claims because Combrinck leased a Tiguian and not a Jetta. Mot. at 7. The Court agrees. Contrary to Plaintiffs' position, the Parrish Letter was not sent "on behalf of a class of individuals with the same transmission." Opp'n at 1. It was sent "on behalf of all persons ... who purchased or leased ... any Seventh Generation (A7) Volkswagen Jetta." Parrish Letter at 1. Combrinck is not in that class. Plaintiffs state that a Section 1782(a) notice sent by a putative named plaintiff applies to all "similar[ly] situated consumers." Opp'n at 2 (quoting Asghari v. Volkswagen Grp. of Am., Inc., 42 F. Supp. 3d 1306, 1317 (C.D. Cal. 2013) and citing Kagan v. Gibraltar Sav. & Loan Assn., 35 Cal. 3d 582, 595, 200 Cal.Rptr. 38, 676 P.2d 1060 (1984) ). Therefore, because both the Jetta and the Tiguan are equipped with the same transmission, "Parrish's valid pre-suit CLRA letter put VW on notice that Combrinck and class members intended to bring suit regarding the subject transmission." Id. However, Asghari supports the contrary conclusion. In Asghari, the district court noted that notice sent on behalf of "owners or lessees of any 2007 through 2012 model year Audi or Volkswagen vehicles equipped with a 2.0 liter turbocharged engine" would not cover "2013 models of any vehicles manufactured by defendants." 42 F. Supp. 3d at 1318 & n.35. This is consistent with the other cases cited by Defendant. See, e.g., Sotelo v. Rawlings Sporting Goods Co., Inc., No. CV 18-9166-GW(MAAX), 2019 WL 3240098, at *5 (C.D. Cal. May 2, 2019) (collecting cases and holding that the plaintiff "cannot recover for products he did not expressly identify in the CLRA notice"). Therefore, the Parrish Letter provides notice only for class members who purchased the Jetta.
Second, although Plaintiffs concede the TAC was filed only 25 days after the Combrinck Letter, they contend that the Combrinck Letter should suffice because "sixty-six days have elapsed since Combrinck sent his valid October 1, 2019 pre-suit CLRA notice letter ... yet VW has undertaken none of the requisite actions enumerated in the statute that would prevent Combrinck from bringing an action for damages." Opp'n at 2. Defendant notes that this Court has previously commented that strict compliance with the 30-day notice requirement is required. Mot. at 6 (citing Jenkins v. j2 Glob., Inc., No. CV 13-9226 DSF (MRWx), 2014 WL 12687417, at *3 (C.D. Cal. May 23, 2014) ). However, the Ninth Circuit has noted that "there is a split in authority on whether the CLRA requires strict compliance with its notice provision" and has declined to "weigh in on this issue." Janda v. T-Mobile USA, Inc., 378 F. App'x 705, 708-09 (9th Cir. 2010). And in Jenkins, the plaintiffs conceded that they did not provide notice at all. 2014 WL 12687417, at *3. In addressing a pre-suit notice requirement under the California Tort Claims Act, the California Supreme Court distinguished between cases that "involved the premature filing of a complaint against a public entity even though the plaintiff had submitted a timely claim to the entity" and cases where the complaint "fail[ed] to allege compliance or circumstances excusing compliance." State of California v. Superior Court, 32 Cal. 4th 1234, 1243-44, 13 Cal.Rptr.3d 534, 90 P.3d 116 (2004) (emphasis in original). The Supreme Court noted that in the former situation, California courts did not dismiss the prematurely filed claims "because the plaintiffs had substantially complied with the claim presentation requirement" and "satisfied the purpose behind the requirement—to give the entity the opportunity to investigate and settle the claim before suit was brought." Id. at 1244, 13 Cal.Rptr.3d 534, 90 P.3d 116. The same is true here. Combrinck provided pre-suit notice, but prematurely filed the TAC five days early. Particularly because the 30-days ran two weeks before Defendant filed its motion to dismiss, the Court finds that Combrinck has substantially complied with the notice requirement. Cf. Cory v. City of Huntington Beach, 43 Cal. App. 3d 131, 136, 117 Cal.Rptr. 475 (1974) ("[T]he city could not have been prejudiced by the premature filing of the action since ... the defect had ceased to exist before the city was even formally notified that suit had been brought"); Taylor v. City of Los Angeles, 180 Cal. App. 2d 255, 263, 4 Cal.Rptr. 209 (1960) (Although "the complaint was ... filed ... several days before the rejection of the claim[,] ... [a]t the time the answer of the city was filed, the city had received every benefit which a provision for rejection prior to suit is intended to serve").
Defendant does not identify any cases requiring a contrary conclusion. O'Brien v. Camisasca Auto. Mfg., Inc., 161 Cal.App.4th 388, 73 Cal.Rptr.3d 911 (2008) has been de-published. The plaintiffs in Lafferty v. Wells Fargo Bank, 213 Cal. App. 4th 545, 153 Cal.Rptr.3d 240 (2013), as modified on denial of reh'g (Feb. 27, 2013), had described in and attached to their complaint a letter sent to the defendant ten months prior to filing a lawsuit and the court held that in any event a "demurrer is not the procedural vehicle for proving that [notice was deficient]." Id. at 565-66, 153 Cal.Rptr.3d 240. In Shein v. Canon U.S.A., Inc., No. CV 08-07323 CAS EX, 2009 WL 1774287 (C.D. Cal. June 22, 2009), the court dismissed the CLRA claim because the plaintiffs had filed their second amended complaint 11 days after the CLRA notice "without prejudice to its being renewed after full compliance with the required notice procedures has been achieved." 2009 WL 1774287, at *6, *8. The plaintiffs filed a third amended complaint a few weeks later. Shein v. Canon U.S.A., Inc., No. CV 08-07323 CAS, 2009 WL 3109721, at *1 (C.D. Cal. Sept. 22, 2009). The defendant moved to dismiss again on the grounds that "plaintiffs did not serve an additional CLRA notice and demand letter on defendant, but filed a TAC that included a CLRA claim for money damages premised upon the [original] demand letter." Id. at *4. The court rejected defendant's argument, holding that "the [original] demand letter constitutes timely CLRA notice." Id. at *6. Following the procedure in Shein here would require Plaintiffs to wait five days before re-filing an identical complaint. The Court does not believe that course of action is required by law or an efficient use of resources given the circumstances.
Defendant's motion to dismiss Combrinck's CLRA claim for damages is DENIED.
b. Equitable Remedies
In addition to damages, Parrish and Combrinck seek injunctive and equitable relief under the CLRA. TAC ¶ 235. Defendant contends that Parrish and Combrinck are not entitled to seek equitable relief because they have "failed to allege the absence of any adequate remedy at law" and "asserted various legal claims for damages." Mot. at 8. While it is true that Plaintiffs cannot ultimately obtain equitable relief if they have an adequate remedy at law, as another district court recently noted, "there is an ‘intra-circuit split’ on the issue of whether it is appropriate to dismiss ... claims [for equitable relief] at the pleading stage when they are based on identical facts as other claims providing the legal remedy of damages." Eason v. Roman Catholic Bishop of San Diego, 414 F. Supp. 3d 1276, 1282 (S.D. Cal. 2019) (collecting cases). The Court agrees with the other district courts that have noted that barring claims for equitable relief at the pleading stage is inconsistent with the federal rules that permit pleading in the alternative. See, e.g., id. ("This Court agrees with the decisions allowing plaintiffs to plead a UCL claim as an alternative legal remedy" and "[n]o controlling authority prevents a plaintiff from pleading alternative legal remedies"); Marshall v. Danone US, Inc., 402 F. Supp. 3d 831, 834 (N.D. Cal. 2019) (declining to dismiss UCL claim on the basis it seeks only equitable relief, because permitting legal and equitable claims to be alleged in the alternative "appears more consistent with ordinary pleading principles"); Wildin v. FCA US LLC, No. 3:17CV-02594-GPC-MDD, 2018 WL 3032986, at *7 (S.D. Cal. June 19, 2018) ("Dismissal of the [plaintiffs'] claims at this stage is premature, as there is no procedural bar to a federal court plaintiff pleading alternative remedies" and "[d]iscovery may reveal that the [plaintiffs'] claims providing legal remedies are inadequate for any number of reasons, despite the fact that their allegations appear adequate."); Adkins v. Comcast Corp., No. 16-CV-05969-VC, 2017 WL 3491973, at *3 (N.D. Cal. Aug. 1, 2017) (declining to dismiss claims seeking equitable relief because "this Court is aware of no basis in California or federal law for prohibiting the plaintiffs from pursuing their equitable claims in the alternative to legal remedies at the pleadings stage").
Defendant's motion to dismiss Parrish's and Combrinck's CLRA claim for equitable relief is denied.
For the same reasons, the Court declines to dismiss the UCL and unjust enrichment claims on this basis.
c. Class Remedies
Defendant also contends that the class damages claim under the UCSPA must be dismissed because it does not fall into one of the three limited circumstances where such a claim is permissible. Mot. at 15 (citing Utah Code Ann. § 13-11-19 ). Plaintiff does not dispute this, but instead argues that this provision conflicts with Rule 23 and therefore does not apply. Opp'n at 24 (citing Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 406, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010) ). In Shady Grove, the Supreme Court held that a New York statute that precluded class actions seeking penalties did not apply in diversity suits in federal courts because it conflicted with, and was therefore preempted by, Rule 23. 559 U.S. at 398-99, 130 S.Ct. 1431 ; see also In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 565 (9th Cir. 2019) ( Shady Grove "explain[ed] that if a proposed class meets Rule 23's criteria, state law cannot prohibit certification").
Defendant identifies a Utah district court that held that Shady Grove's analysis does not apply to the UCSPA. See Callegari v. Blendtec, Inc., No. 2:18-CV-308-DB, 2018 WL 5808805, at *4 (D. Utah Nov. 6, 2018) ("[T]he court finds no conflict between Federal Rule of Civil Procedure 23 and Utah Code Ann. § 13-11-19(4)(a)" and therefore "the court need not proceed under the Shady Grove analysis"). The Callegari court reasoned that Rule 23 is "permissive" and "does not explicitly set forth exclusive procedural requirements for maintaining a class action." Id. However, this directly conflicts with the statement in Shady Grove that "[t]he discretion suggested by Rule 23's ‘may’ is discretion residing in the plaintiff: He may bring his claim in a class action if he wishes." 559 U.S. at 400, 130 S.Ct. 1431. The Court concludes that Section 13-11-19 does not bar Utne's class claims at this time.
Defendant also cites another Utah district court case that analyzed whether the plaintiff satisfied both Rule 23 and Section 13-11-19. Miller v. Basic Research, LLC, 285 F.R.D. 647, 654 (D. Utah 2010). Because the court found that the plaintiffs did meet one of the exceptions set out Section 13-11-19 (and because plaintiffs did not raise the issue), it did not consider whether Rule 23 preempts Section 13-11-19.
A number of district court cases have declined to decide at the motion to dismiss stage whether the UCSPA limits the relief sought. See, e.g., In re Volkswagen "Clean Diesel" Mktg., Sales Practices, & Prod. Liab. Litig., 349 F. Supp. 3d 881, 920 (N.D. Cal. 2018) ("The Court will therefore wait until the class certification stage to address whether ... Utah's class action limits apply" because defendant's "arguments focus on whether Plaintiffs can pursue class claims under certain state consumer laws, not on whether the claims themselves are well pled" which is the only "question is at issue in a Rule 12(b)(6) motion to dismiss."); In re Insulin Pricing Litig., No. 317CV699BRMLHG, 2020 WL 831552, at *6 (D.N.J. Feb. 20, 2020) ("[T]he Court ... deems these issues [whether the UCSPA claim should be dismissed to the extent its seeks damages] better suited for disposition later in the litigation.").
Defendant's motion to dismiss the First and Ninth Causes of Action is DENIED. The motion to dismiss the Sixth Cause of Action is GRANTED in part, with leave to amend, and DENIED in part.
B. UCL (Third Cause of Action)
The UCL prohibits acts or practices that are (1) fraudulent, (2) unlawful, or (3) unfair. Cal. Bus. & Prof. Code § 17200. Defendant first contends Parrish and Combrinck have failed to allege a violation under the fraudulent prong for the same reasons as alleged above—failure to adequately plead pre-sale knowledge. See Mot. at 9. However, the Court found that Plaintiffs adequately pleaded pre-sale knowledge. Second, Defendant argues that Plaintiffs have failed to allege a UCL violation under the unlawful prong because "Plaintiffs have failed to sufficiently plead a violation of any statute including the CLRA, Song-Beverly, or breach of express warranty." Mot. at 10 n.4. However, because the Court found otherwise, Defendant's motion to dismiss the Third Cause of Action is DENIED.
C. Breach of Implied Warranty (Second, Eighth, and Tenth Causes of Action)
1. Pre-Suit Notice
Defendant contends that the Pennsylvania and Utah implied warranty claims must be dismissed because the respective Plaintiffs did not provide pre-suit notice. Mot. at 16. The relevant statutes require a buyer to "notify" a seller within a "reasonable" time after the buyer discovers the breach. Utah Code Ann. § 70A-2-607(3)(a) ("[T]he buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy"); 13 Pa. Stat. and Cons. Stat. Ann. § 2607(c)(1) (same) ).
Defendant makes the same argument as to the express warranty claims brought by the Utah and Pennsylvania Plaintiffs. Mot. at 22.
Utne alleges she complained about transmission issues to a dealership on at least two separate occasions in July and August 2019, TAC ¶¶ 46-47, before being added to the Second Amended Complaint (SAC) on September 4, 2019, Dkt. 35 (SAC). Wood alleges he complained three times about the Defect to different dealerships in April and May 2019, TAC ¶¶ 28-30, before filing the initial complaint in June 2019, Dkt. 1 (Compl.). Plaintiffs contend the filing of the respective complaints were sufficient notification of the claimed breaches. Opp'n at 19.
Neither party identifies a case explicitly addressing this issue under Utah law. In Mawhinney v. Jensen, 120 Utah 142, 232 P.2d 769 (1951), the Utah Supreme Court stated that "timely notice is a vital condition precedent to an action for breach of warranty." Id. at 154, 232 P.2d 769. There plaintiff had filed a complaint seeking damages for breach of warranty 32 months after entering into the relevant contract. Id. at 147, 232 P.2d 769. The Court held that 32 months was "an unreasonable delay under the circumstances of this case" as a matter of law. Id. at 154-55, 232 P.2d 769. The Court did not, however, hold that the filing of the complaint was insufficient to constitute notice; to the contrary, it used the filing of the complaint as the date on which notice was provided to determine if notice was timely. In Christopher v. Larson Ford Sales, Inc., 557 P.2d 1009 (Utah 1976), the Court again addressed only whether notice was timely, not whether a complaint constituted notice. Id. at 1012.
In Christopher, notice was otherwise provided when the plaintiffs attempted to return the motor home two months after they bought it and the defendant refused. 557 P.2d at 1012.
Defendant cites a Utah district court case, Callegari, 2018 WL 5808805, holding that " Section 70A-2-607 places an affirmative burden on a would-be plaintiff prior to his filing suit, rather than merely requiring that a defendant be on notice of a breach." Id. at *6. But Callegari does not explicitly address whether a complaint constitutes notice either. Rather, it holds only that "knowledge of the falsity of statements" about the product is not sufficient because a statute requiring a buyer to notify a seller requires the buyer to take some action; it is not enough for the seller to merely have "notice." Id. Under Utah law:
A person "notifies" ... another person by taking such steps as may be reasonably required to inform the other person in ordinary course, whether or not the other person actually comes to know of it.
Utah Code Ann. § 70A-1a-202(4). There is nothing in this provision that would exclude the filing of a complaint from the definition of "notifies." The Court, therefore, cannot conclude that Utne's failure to provide Defendant with notice prior to filing her complaint bars her claim as a matter of law.
Pennsylvania law is also unclear. The Pennsylvania Supreme Court has noted that "the law of this Commonwealth is neither ‘well-settled’ nor self-evident" regarding "what constitutes reasonable notice" and whether "the consumer [must] provide an opportunity to cure before filing suit for breach of warranty." Samuel-Bassett v. Kia Motors Am., Inc., 613 Pa. 371, 415 n.17, 34 A.3d 1 (2011). The Court noted that the cases cited by the defendant in that case, including Beneficial Commercial Corp. v. Brueck, 23 Pa. D. & C.3d 34 (Pa. Com. Pl. 1982), the only state court case cited by Defendant here, evidenced the lack of consensus. Id. One of the other cases cited by Defendant similarly acknowledged that there is a split in authority regarding whether "the filing of a complaint provides sufficient pre-litigation notice under Pennsylvania law." In re 5-Hour ENERGY Mktg. & Sales Practices Litig., No. MDL 13-2438 PSG (PLAx), 2015 WL 12734796, at *10 (C.D. Cal. Jan. 22, 2015).
Because it found there was sufficient notice, the Court "offer[ed] no opinion as to whether" notice and opportunity to cure are in fact "necessary to establish a claim for breach of warranty." Samuel-Bassett, 613 Pa. at 415 n.17, 34 A.3d 1.
A Pennsylvania appellate court has held that under "a similar ‘notice’ provision" for rejection of goods, the filing of a complaint constituted adequate notice. Yates v. Clifford Motors, Inc., 283 Pa. Super. 293, 309 & n.8, 423 A.2d 1262 (1980). The court also noted that "[w]e can discern no reason to treat the filing of a complaint differently for purposes of rejection than is the custom with either revocation of acceptance or rescission." Id. at 309, 423 A.2d 1262 n.10. A district court in Pennsylvania later held that "[b]ased on Yates " and "[a]s there is no indication that the Pennsylvania Supreme Court would rule otherwise," "the filing of a civil complaint satisfies the requirement of providing breach of warranty notice under section 2607." Bednarski v. Hideout Homes & Realty, Inc., A Div. of U.S. Homes & Properties, Inc., 709 F. Supp. 90, 94 (M.D. Pa. 1988) ; see also Solarz v. DaimlerChrysler Corp., No. 2033 APRILTERM 2001, 2002 WL 452218, at *12 (Pa. Com. Pl. Mar. 13, 2002) (agreeing with Bednarski and holding that "DaimlerChrysler received proper notice of the plaintiffs' breach of warranty claims when the plaintiffs filed their original Complaint in May 2001"); In re Nexus 6P Prod. Liab. Litig., 293 F. Supp. 3d 888, 914 (N.D. Cal. 2018) ("Pennsylvania state courts have held that the filing of a complaint may satisfy the notice requirement for a breach of warranty claim." (citing Precision Towers, Inc. v. Nat-Com, Inc., No. 2143 APRIL TERM 2002, 2002 WL 31247992, at *5 (Pa. Com. Pl. Sept. 23, 2002) and Yates, 283 Pa. Super. at 309, 423 A.2d 1262 )). Although more than 30 years have passed since Bednarski was decided, Yates appears to be the best indication of Pennsylvania law on this issue. Therefore, the filing of the complaint constituted notice and the Court declines to dismiss Wood's warranty claims on this basis.
The parties also cite competing district court cases on the issue of whether notice of the defect is sufficient. Compare Schmidt v. Ford Motor Co., 972 F. Supp. 2d 712, 718 (E.D. Pa. 2013) ("actual or constructive notice of the defect on the part of the manufacturer is irrelevant; the plaintiff must provide notification independently"), and Am. Fed'n of State Cty. & Mun. Employees v. Ortho-McNeil-Janssen Pharm., Inc., No. 08-CV-5904, 2010 WL 891150, at *6 (E.D. Pa. Mar. 11, 2010) ("To ‘notify’ under the UCC requires the affirmative act of notification .... Plaintiffs' ‘constructive notice’ argument does not address whether Plaintiffs ever actually and affirmatively notified Defendants of the breach"), with Martin v. Ford Motor Co., 765 F. Supp. 2d 673, 683 (E.D. Pa. 2011) (where "class members took the affirmative step of ‘notifying’ Defendant of the breach by complaining ‘about this very issue to Defendant ,’ ... Plaintiff has satisfied the ‘notification’ requirement of § 2607(c)(1)"). Because the Court has concluded that filing the complaint constitutes notice under Pennsylvania law, it need not resolve this issue. The Court notes, however, that in Samuel-Bassett, 613 Pa. 371, 34 A.3d 1, the Pennsylvania Supreme Court held that notice was adequate where the defendant "was on notice since late 1998 (more than two years before this action was filed) that Sephias, beginning with the 1997 model, had defective front brakes." Id. at 414, 34 A.3d 1. Additionally, Schmidt distinguished Martin on the grounds that in Schmidt, "Plaintiffs seek to recover based on different alleged defects in several different products" and "Plaintiffs have not alleged that identical components are used in each of those different vehicles." 972 F. Supp. 2d at 719. Here, Plaintiffs allege that two different models suffer from the same defect cause by an identical transmission.
2. Breach
Defendant contends that the California and Pennsylvania warranty claims fail because the Defect did not render Plaintiffs' vehicles inoperable, "drastically undermine[ ] the vehicle's operability," or lead to a safety risk. Mot. at 18. An implied warranty of merchantability under the Song-Beverly Act means that the product is "fit for the ordinary purposes for which such goods are used." Cal. Civ. Code § 1791.1(a)(2) ; see also 13 Pa. Stat. and Cons. Stat. Ann. § 2314(b)(3) (same).
Defendant contends that the issues complained of by Parrish, Combrinck, and Wood do not render their vehicles inoperable or unsafe and therefore do not constitute a breach of the implied warranty. Mot. at 18-19. Under California law, "a vehicle that is capable of providing transportation from point A to point B does not necessarily fulfill the implied warranty of merchantability." Gutierrez v. Carmax Auto Superstores California, 19 Cal. App. 5th 1234, 1247, 248 Cal.Rptr.3d 61 (2018), as modified on denial of reh'g (Feb. 22, 2018). "A vehicle that smells, lurches, clanks, and emits smoke over an extended period of time is not fit for its intended purpose." Isip v. Mercedes-Benz USA, LLC, 155 Cal. App. 4th 19, 27, 65 Cal.Rptr.3d 695 (2007). Similarly, "a vehicle sunroof that opens and closes on its own creates a substantial safety hazard" by "creating a dangerous distraction." Brand v. Hyundai Motor Am., 226 Cal. App. 4th 1538, 1547, 173 Cal.Rptr.3d 454 (2014), as modified on denial of reh'g (July 16, 2014). Therefore, the Court concludes that a vehicle that repeatedly makes a "coffee grinder noise" or a "clunk noise," TAC ¶¶ 20, 38, might shock or surprise not only the driver of the vehicle, but also other drivers on the road, causing distractions and safety hazards. See Brand, 226 Cal. App. 4th at 1547, 173 Cal.Rptr.3d 454 ("This minimum guarantee in the implied warranty of merchantability protects not only the vehicle purchaser, but other motorists, passengers, pedestrians, and the public generally."). And surely a "hard shift" and "jerk" that "feels like [the vehicle is] being rear ended," TAC ¶¶ 38-39, could cause a dangerous distraction.
It is not relevant to this motion that the mechanics were "unable to verify" the claimed issues or that the "noise complaints ... were not found to be abnormal" by Defendant's authorized repair shops. Mot. at 18-19. That mechanics could not verify a defect does not mean it did not exist and statements that the noise was normal, based on the TT Plaintiffs claim was fraudulent, are not sufficient to overcome Plaintiffs' allegations to the contrary at this stage. In the case cited by Defendant holding otherwise, the court granted defendant's motion for nonsuit against the implied warranty claims. Orichian v. BMW of N. Am., LLC, 226 Cal. App. 4th 1322, 1328, 172 Cal.Rptr.3d 876 (2014), as modified (July 1, 2014). Additionally, Plaintiffs were not required to "await a seller's attempt to make repairs," Brand, 226 Cal. App. 4th at 1548, 173 Cal.Rptr.3d 454, or show that they could no longer use the vehicle, see Gutierrez, 19 Cal. App. 5th at 1247 ; see also In re MyFord Touch Consumer Litigation, 291 F. Supp. 3d 937, 947 (N.D. Cal. 2018).
Defendant does not address Isip or Brand, instead citing to a district court case holding that the plaintiffs had not sufficiently alleged a breach of the implied warranty by pleading that failures in the heating and cooling systems prevented them from driving their vehicles in extremely cold or extremely warm conditions. Blissard, 2018 WL 6177295, at *8. The court noted that "the nature of th[is] defect might be viewed as a mere ‘annoyance’ not something that interferes with Plaintiffs' ‘ability to drive [their] car[s].’ " Id. (second and third alteration in original) (quoting Mooradian v. FCA US, LLC, No. 1:17-CV-1132, 2017 WL 4869060, at *7 (N.D. Ohio Oct. 27, 2017) ). In the other case Defendant cites, the court held that "peeling chrome trim on certain interior car components, such as the gear shifter and cup holder" did not constitute a breach of the implied warranty. Avedisian v. Mercedes-Benz USA, LLC, 43 F. Supp. 3d 1071, 1074, 1079 (C.D. Cal. 2014). However, unlike Blissard and Avedisian, here the defect manifests suddenly while driving the vehicle.
Plaintiffs do not address Pennsylvania law, and in the only case cited by Defendant, the plaintiff had not alleged the defects were present at the time of sale. See Smith v. Newman Motors, Inc., 2011 Pa. Dist. & Cnty. Dec. LEXIS 394, *17-18. To the extent Smith correctly states that law, an implied warranty under Pennsylvania law "requires that vehicles be substantially free of defects and fit for safe, reliable travel." Id. at *17. The Court cannot conclude that a car that makes a "growl noise" and has trouble accelerating, TAC ¶¶ 28-30, is fit for safe and reliable travel as a matter of law. See Victorino, 2018 WL 1083395, at *7, *11 (safety concern that plaintiff "was unable to accelerate as he was entering the freeway"); Falk v. Nissan North America, Inc., 2018 WL 2234303, at *3 (N.D. Cal. May 16, 2018) ("The vehicles' unreliable acceleration alone, based on the allegations, poses a risk for any driver on the road.").
The Court declines, again, to conduct substantial independent research where the parties were given a second chance to submit briefing for the sole purpose of addressing such issues.
Finally, Defendant contends that because under Utah law an implied warranty is satisfied if the obligations of an express warranty are satisfied, the fact that the dealership "performed a software update to remedy" Utne's alleged issues with acceleration prevents Utne from adequately stating a claim for breach of implied (or express) warranty. Mot. at 20. However, as Plaintiffs point out, Utne alleged that the software update did not fix the Defect. Opp'n at 18. The TAC alleges that although "the dealership performed an ECM Software Update 26M1, ... Utne's vehicle continues to exhibit the Transmission Defect, including delay in shifting, hesitation, and has never been repaired by Defendant." Id. ¶¶ 47-48. Therefore, Defendant's challenge on this basis fails.
Defendant's motion to dismiss the Second, Eighth, and Tenth Causes of Action is DENIED.
D. Breach of Express Warranty (Seventh Cause of Action)
The express New Vehicle Limited Warranty (the Warranty) covers repairs to defects "in material, workmanship or factory preparation." TAC ¶ 265; see also id. ¶ 267 (covers repairs based on defects "in workmanship and materials"); Dkts. 64-1 (2018 Warranty), 64-2 (2019 Warranty). Defendant contends that a "materials and workmanship" warranty does not cover design defects. Mot. at 22. However, this is apparently an open issue under Pennsylvania law. See Mack Trucks Inc. v. BorgWarner Turbo Sys., Inc., 508 F. App'x 180, 184 (3d Cir. 2012) ("the Supreme Court of Pennsylvania [has not] construed these terms ["material" or "workmanship"] in the context of warranties"). In Samuel-Bassett, the Pennsylvania Supreme Court held that the evidence sufficiently established that a warranty against manufacturing defects was breached when "[a]ll vehicles in the class were sold with a defectively designed brake system causing premature wear of brake components that necessitated frequent replacement." 613 Pa. at 434, 34 A.3d 1. Although the Supreme Court did not specifically address the meaning of the phrase "materials and workmanship," it explicitly found a breach of contract based on a design defect. Id. Therefore, the Court DENIES Defendant's motion to dismiss the Seventh Cause of Action.
The Court grants Defendant's unopposed request for judicial notice (Dkt. 63) of the Warranty. Fed. R. Evid. 201(b).
E. MMWA (Fourth and Fifth Causes of Action)
The MMWA provides that "[n]o claim shall be cognizable in a suit brought [in federal court] ... (C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred." 15 U.S.C. § 2310(d)(3). It is undisputed that this action is being brought as a class action in federal court with only four named plaintiffs, contrary to this provision.
Plaintiffs contend that the Class Action Fairness Act (CAFA) "allows jurisdiction over MMWA claims that do not satisfy MMWA's jurisdictional requirements." Opp'n at 21 (citing In re Sony Vaio Computer Notebook Trackpad Litig., No. 09CV2109 BEN RBB, 2010 WL 4262191, at *4 (S.D. Cal. Oct. 28, 2010) ). The Court disagrees.
In MacDougall v. Am. Honda Motor Co., No. SACV 17-01079 AG (DFMx), 2017 WL 8236359 (C.D. Cal. Dec. 4, 2017), the court concluded that CAFA did not "replace the [MMWA]'s internal requirements," reasoning that "CAFA is a basis for diversity jurisdiction" while the MMWA "provides a distinct federal claim for certain warranty violations" and it would be "nonsensical" for CAFA to "fill in the gaps for missing substantive requirements of a federal law." Id. at *4 ; see also Floyd v. Am. Honda Motor Co., No. 2:17-CV-08744-SVW-AS, 2018 WL 6118582, at *3 (C.D. Cal. June 13, 2018) (same); Cadena, 2019 WL 3059931, at *11 ("[T]he weight of more recent authority is that the 100-plaintiff requirement cannot be supplanted by the prerequisites for exercising diversity jurisdiction under CAFA." (citing Patterson v. RW Direct, Inc., No. 18-CV-00055-VC, 2018 WL 6106379, at *2 n.2 (N.D. Cal. Nov. 21, 2018) and MacDougall, 2017 WL 8236359, at *4 )). The Court finds these cases persuasive and concludes that Plaintiffs have not adequately alleged a claim under the MMWA. The Fourth and Fifth Causes of Action are DISMISSED with leave to amend to the extent Plaintiffs can comply with the MMWA's requirements.
In Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009), the Ninth Circuit concluded that the district court had subject matter jurisdiction under CAFA over a class action asserting, among others, an MMWA claim brought by only two named plaintiffs. Id. at 957 & n.1. However, in Birdsong, the parties did not dispute that the district or appellate courts had jurisdiction over the class action, and the defendant did not raise the issue of the 100-plaintiff bar. Nor did the Circuit otherwise address it; the MMWA claim was dismissed for failure of the underlying state warranty claims. Therefore, it remains an open issue under Ninth Circuit law whether CAFA overrides the MMWA's more specific requirement. See Harris v. Cty. of Orange, 902 F.3d 1061, 1071 n.9 (9th Cir. 2018) ("question ... remains open" where a court "assumed, but did not address directly," the question at issue); Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 938 (9th Cir. 2007) ("We are not required to follow what amounts to, at most, an implicit assumption, because ‘[s]uch unstated assumptions on non-litigated issues are not precedential holdings binding future decisions.’ " (alteration in original) (quoting Sakamoto v. Duty Free Shoppers, Ltd., 764 F.2d 1285, 1288 (9th Cir. 1985) )); see also MacDougall 2017 WL 8236359, at *4 (noting that Birdsong did not address "the interplay between the Magnuson-Moss Act's explicit named plaintiffs requirement and CAFA"). The Court also notes that neither party here raised Birdsong as relevant to this issue.
F. Unjust Enrichment (Eleventh Cause of Action)
Defendant contends that a claim for unjust enrichment cannot be brought where "the parties are bound to a valid express contract," here, the Warranty, and because an adequate remedy at law exists, so equitable remedies are not permitted. Mot. at 24-25. For the reasons stated above, the Court will permit Plaintiffs to plead an unjust enrichment claim in the alternative to their other claims. See Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015) (unjust enrichment claim should not be dismissed merely "because it was duplicative of or superfluous to [plaintiff's] other claims" (citing Fed. R. Civ. P. 8(d)(2) )).
Defendant's motion to dismiss the Eleventh Cause of Action is DENIED.
IV. CONCLUSION
The Fourth and Fifth Causes of Action are DISMISSED with leave to amend and the Sixth Cause of Action is DIMISSED in part as to Wood with leave to amend. An amended complaint must be filed no later than June 3, 2020. Failure to file by that date will waive the right to do so. The Court does not grant leave to add new defendants or new claims. Leave to add new defendants or new claims must be sought by a properly-noticed motion.
IT IS SO ORDERED.