Albert Heber v. Toyota Motor Sales, U.S.A., Inc.

NOTICE OF MOTION AND MOTION to Dismiss Case Second Amended Complaint

C.D. Cal.February 27, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Amir Nassihi (SBN 235936) anassihi@shb.com SHOOK, HARDY & BACON L.L.P. One Montgomery, Suite 2700 San Francisco, California 94104-4505 Telephone: 415.544.1900 Facsimile: 415.391.0281 Frank Rothrock (SBN 54452) frothrock@shb.com Naoki Kaneko (SBN 252285) nkaneko@shb.com SHOOK, HARDY & BACON L.L.P. Jamboree Center 5 Park Plaza, Suite 1600 Irvine, California 92614 Telephone: 949.475.1500 Facsimile: 949.475.0016 Attorneys for Defendant TOYOTA MOTOR SALES, U.S.A., INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ALBERT HEBER, DOUGLAS POWELL, and JENNIFER GRAMMER, on behalf of themselves and all other similarly situated, Plaintiffs, vs. TOYOTA MOTOR SALES, U.S.A., INC., a California corporation, Defendant. Case No. 8:16-cv-01525-AG-JCG Judge: Hon. Andrew J. Guilford TOYOTA MOTOR SALES, U.S.A., INC.’S NOTICE OF MOTION AND MOTION TO DISMISS THE SECOND AMENDED COMPLAINT Date: April 3, 2017 Time: 10:00 a.m. Ctrm: 10D Second Amended Complaint Filed: Dec. 23, 2016 Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 1 of 37 Page ID #:592 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG NOTICE OF MOTION AND MOTION PLEASE TAKE NOTICE that on April 3, 2017, at 10:00 a.m. or as soon thereafter as the matter may be heard, in Courtroom 10D, of the United States District Court located at 411 W. Fourth Street, Santa Ana, California, 92701, Defendant Toyota Motor Sales, U.S.A., Inc. will and hereby moves the Court for an order dismissing Plaintiffs’ Second Amended Complaint (ECF Doc. 17) and each claim alleged therein. This Motion is made pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and is based on the following grounds: First, both standing and choice-of-law principles preclude Plaintiffs from pursuing a nationwide class action. Second, the express-warranty claims fail because Toyota’s warranty does not cover design defects such as the alleged decision to use soy-based insulation in vehicles. The warranty also does not cover damage or failure resulting directly or indirectly from environmental conditions, such as damage caused by wild animals. Third, the implied-warranty claim fails because an implied warranty cannot contradict an express warranty, because Plaintiffs do not allege their cars were unmerchantable at the time of sale, and because they do not allege privity. Fourth, the failure of Plaintiffs’ state-law warranty claims also defeats their claim under the Magnuson-Moss Warranty Act. That claim would also fails because Plaintiffs have not alleged compliance with the Act’s informal-dispute-resolution requirement. Fifth, the Declaratory Judgment Act claim fails because it is merely duplicative of the warranty claims, and there is nothing left of those. Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 2 of 37 Page ID #:593 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Sixth, none of the plaintiffs have stated a consumer-protection claim. They have alleged neither actionable misrepresentations nor any facts showing that Toyota had a duty to disclose to them the possibility of rodent damage. Finally, Plaintiffs’ claims for equitable relief fail because they have alleged no facts showing either that a legal remedy would be inadequate (assuming they could prevail) or that they are at risk of irreparable injury. This Motion is made following the conference of counsel that took place pursuant to Local Rule 7-3 in late 2016 and February 22, 2017, as set forth in the Declaration of Amir Nassihi, filed concurrently with this Motion. This Motion is based on this Notice of Motion and the Memorandum of Points and Authorities, and the Declaration of Amir Nassihi filed concurrently with this Motion, the pleadings and documents on file in this case, and such other evidence and argument as may be presented at the hearing on this Motion. Dated: February 27, 2017 SHOOK HARDY & BACON L.L.P. By: /s/ Amir Nassihi Amir Nassihi Frank Rothrock Naoki Kaneko Attorneys for Defendant Toyota Motor Sales U.S.A., Inc. Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 3 of 37 Page ID #:594 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG TABLE OF CONTENTS INTRODUCTION ................................................................................................. 1 STATEMENT OF FACTS .................................................................................... 2 LEGAL STANDARD............................................................................................ 4 LEGAL DISCUSSION.......................................................................................... 5 I. Plaintiffs From Two States Cannot Pursue a “Nationwide Class Action.”.... 5 II. Plaintiffs Do Not Allege a Breach of Express Warranty............................... 9 A. The “vast weight of authority” holds that express warranties like this one do not cover design defects. ................................................ 10 B. The exclusion for damage caused by “environmental conditions” would also apply. ............................................................................. 12 C. Plaintiffs do not allege facts making causation plausible in any event. ............................................................................................... 13 D. Plaintiffs do not allege problems arose during the warranty period. . 14 III. The Implied-Warranty Claims Fail for Similar Reasons and Also Because Plaintiffs Have Not Alleged Their Vehicles Were Unmerchantable. ...........15 A. The express warranty displaces any applicable implied warranty..... 15 B. Plaintiffs have not alleged their cars were unmerchantable at the time of delivery or otherwise. .......................................................... 16 C. Plaintiffs do not allege privity. ......................................................... 17 IV. Plaintiffs Fail to State a Claim Under the Magnuson-Moss Warranty Act...18 A. Plaintiffs fail to allege viable state-law warranty claims................... 18 B. Plaintiffs also fail to allege compliance with informal dispute resolution procedures. ...................................................................... 18 V. The Declaratory Judgment Act Claim Should Be Dismissed.......................19 VI. Plaintiffs’ Consumer-Protection Claims Also Fail. .....................................20 A. Plaintiffs’ claims are subject to Rule 9(b). ....................................... 20 B. Plaintiffs have not pleaded their claims with particularity. ............... 21 VII. Plaintiffs’ Equitable Claims Fail Because They Do Not Allege Facts Showing They Have No Adequate Legal Remedy. .....................................23 CONCLUSION ....................................................................................................24 Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 4 of 37 Page ID #:595 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG TABLE OF AUTHORITIES Page(s) CASES 389 Orange St. Partners v. Arnold, 179 F.3d 656 (9th Cir. 1999)..............................................................................5 Ashcroft v. Iqbal, 556 U.S. 662 (2009).................................................................................4, 5, 15 Baughn v. Honda Motor Co., 727 P.2d 655 (Wash. 1986)................................................................................8 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)........................................................................... 4, 5, 13, 15 Berenblat v. Apple, Inc., No. 08-4969 JF, 2010 WL 1460297 (N.D. Cal. Apr. 9, 2010)..........................23 Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009)............................................................................18 Brand v. Hyundai Motor Am., 226 Cal. App. 4th 1538 (2014).........................................................................16 Bruce Martin Constr., Inc. v. CTB, Inc., 735 F.3d 750 (8th Cir. 2013)............................................................................11 Cafasso ex rel. U.S. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047 (9th Cir. 2011)............................................................................5 Cal. Med. Ass’n. v. Aetna U.S. Healthcare of Cal., Inc., 94 Cal.App.4th 151 (2001)...............................................................................24 Cali v. Chrysler Group LLC, No. 10 Civ. 7606(JSR), 2011 WL 383952 (S.D.N.Y. Jan.18, 2011).................11 Cipollone v. Liggett Grp 893 F.2d 541, 569 n.34 (3d Cir. 1990) ...............................................................8 Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 5 of 37 Page ID #:596 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008)......................................................................6, 18 Consol. Papers, Inc. v. Dorr-Oliver, Inc., 451 N.W.2d 456 (Wis. Ct. App. 1989).............................................................16 Consumer Advocates v. Echostar Satellite Corp., 113 Cal. App. 4th 1351 (2003).........................................................................22 Cooley v. Big Horn Harvestore Sys., Inc., 813 P.2d 736 (Colo. 1991) .................................................................................8 Corcoran v. CVS Health Corp., 169 F. Supp. 3d 970 (N.D. Cal. 2016)................................................................6 Daugherty v. Am. Honda Motor Co., Inc., 144 Cal. App. 4th 824 (2006).....................................................................14, 18 Davison v. Kia Motors Am., Inc., SA CV 15-00239-CJC(RNBx), 2015 WL 3970502 (C.D. Cal. June 29, 2015) .................................................................................................................7 Del Monte Int’l GmbH v. Del Monte Corp., 995 F. Supp.2d 1107 (C.D. Cal. 2014) .............................................................19 Dept. of Fish & Game v. Anderson-Cottonwood Irrigation Dist., 8 Cal. App. 4th 1554 (1992).............................................................................23 Durocher & Ass’n , No. 1:13-cv-01570, 2015 WL 1505675 (S.D. Ind. Mar. 31, 2015) .....................7 Eclectic Props. E., LLC v. Marcus & Millichap Co., 751 F.3d 990 (9th Cir. 2014)............................................................................13 Elias v. Hewlett-Packard Co., 903 F. Supp. 2d 843 (N.D. Cal. 2012)..............................................................22 Feuerstein v. Home Depot, U.S.A., Inc., No. 2:12-cv-01062 JWS, 2014 U.S. Dist. LEXIS 78131 (D. Ariz. June 6, 2014) ...............................................................................................................11 Fiedler v. Clark, 714 F.2d 77 (9th Cir. 1983)..............................................................................19 Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 6 of 37 Page ID #:597 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vi TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Fieldstone Co. v. Briggs Plumbing Prods., Inc., 54 Cal. App. 4th 357 (1997)...............................................................................8 Fischer v. Mead Johnson Labs., 41 A.D.2d 737 (N.Y. App. Div. 1973) ...............................................................8 Fonseca v. Goya Foods, Inc., No. 14-CV-02989-LHK, 2016 U.S. Dist. LEXIS 121716 (N.D. Cal. Sept. 8, 2016)...................................................................................................24 Fortune View Condo. Ass’n v. Fortune Star Dev. Co., 90 P.3d 1062 (Wash. 2004)................................................................................8 Frenzel v. AliphCom, 76 F. Supp. 3d 999 (N.D. Cal. 2014)..................................................................7 Frezza v. Google, Inc., No. 5:12-CV-00237-RMW, 2013 WL 1736788 (N.D. Cal. Apr. 22, 2013)........7 Gardner v. Safeco Ins. Co. of Am., No. 14-cv-02024-JCS, 2014 WL 2568895 (N.D. Cal. June 6, 2014)................24 Gertz v. Toyota Motor Corp., No. CV 10-1089 PSG (VBKx), 2011 WL 3681647 (C.D. Cal. Aug. 22, 2011) ...............................................................................................................10 Glenn v. Hyundai Motor Am., No. SA CV 15-2052-DOC, 2016 WL 3621280 (C.D. Cal. June 24, 2016).........7 Granfield v. NVIDIA Corp., C 11-05403 JW, 2012 WL 2847575 (N.D. Cal. July 11, 2012) .....................6, 7 Grodzitsky v. Am. Honda Motor Co., No. 2:12-cv-1142-SVW-PLA, 2013 WL 2631326 (C.D. Cal. June 12, 2013)..................................................................................................15 Herremans v. BMW of N. Am., LLC, No. CV 14-02363 MMM, 2014 WL 5017843 (C.D. Cal. Oct. 3, 2014) ...........18 Horvath v. LG Elecs. MobileComm U.S.A., Inc., No. 3:11-CV-01576-H-RBB, 2012 U.S. Dist. LEXIS 19215 (S.D. Cal. Feb. 13, 2012)..................................................................................................10 Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 7 of 37 Page ID #:598 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vii TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Hyundai Motor Am., Inc. v. Goodin, 822 N.E.2d 947 (Ind. 2005) .........................................................................8, 18 In re Actimmune Mktg. Litig., No. C 08-02376 MHP, 2009 WL 3740648 (N.D. Cal. Nov. 6, 2009)...........6, 22 In re Carrier IQ, Inc. Consumer Privacy Litig., 78 F. Supp. 3d 1051, 1069-75 (N.D. Cal. 2015).................................................6 In re Ditropan XL Antitrust Litig., 529 F. Supp. 2d 1098 (N.D. Cal. 2007)..............................................................6 In re Flash Memory Antitrust Litig., 643 F. Supp. 2d 1133 (N.D. Cal. 2009)..............................................................6 In re iPhone Application Litig., 6 F. Supp. 3d 1004 (N.D. Cal. 2013)................................................................20 In re MyFord Touch Consumer Litig., 46 F. Supp. 3d 936 (N.D. Cal. 2014)..........................................................19, 22 In re Sony PS3 Other OS Litig., 551 F. App’x. 916 (9th Cir. 2014)....................................................................14 Jasper v. Abbott Labs., Inc., 834 F. Supp. 2d 766 (N.D. Ill. 2011)................................................................22 Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009).......................................................... 5, 20, 21, 22 Keegan v. Am. Honda Motor Co., 838 F. Supp. 2d 929 (C.D. Cal. 2012) ....................................................9, 16, 18 Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962 (C.D. Cal. 2014) ..............................................................16 Lewis v. Casey, 518 U.S. 343 (1996)...........................................................................................6 Littlehale v. Hain Celestial Grp., Inc., No. 11-cv-06342-PJH, 2012 WL 5458400 (N.D. Cal. July 2, 2012) ..................7 Lutz Farms v. Asgrow Seed Co., 948 F.2d 638 (10th Cir. 1991)............................................................................8 Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 8 of 37 Page ID #:599 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 viii TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Lyons v. Leatt Corp., No. 4:15-CV-17-TLS, 2015 WL 7016469 (N.D. Ind. Nov. 10, 2015) ..............21 Mack Trucks, Inc. v. BorgWarner Turbo Sys., Inc., 508 F. App’x. 180 (3d Cir. 2012).....................................................................11 Marcus v. Apple Inc., No. C 14-03824 WHA, 2015 U.S. Dist. LEXIS 2140 (N.D. Cal. Jan. 8, 2015) ...............................................................................................................17 Mazza v. Am. Honda Motor Co., 666 F.3d 581 (9th Cir. 2012)......................................................................7, 8, 9 McKinney v. State, 693 N.E.2d 65 (Ind. 1998) ...............................................................................21 Merrimack Mut. Fire Ins. Co. v. Watkins Mfg. Co., No. 3:13cv123 (JBA), 2015 U.S. Dist. LEXIS 67798 (D. Conn. May 26, 2015) ...............................................................................................................14 Mexia v. Rinker Boat Co., Inc., 174 Cal. App. 4th 1297 (2009)...................................................................16, 17 Mollicone v. Universal Handicraft, Inc., No. 2:16-cv-07322-CAS(MRWx), 2017 WL 440257 (C.D. Cal. Jan. 30, 2017) .................................................................................................................6 Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992).........................................................................................24 Morales v. Unilever U.S., Civ. No. 2:13-2213 WBS, 2014 WL 1389613 (E.D. Cal. Apr. 9, 2014)...........23 Nelson v. Nissan N. Am, Inc., Civ. No. 11-5712, 2014 WL 7331075 (D.N.J. Dec. 19, 2014)....................10, 11 Oestreicher v. Alienware Corp., 544 F. Supp. 2d 964 (N.D. Cal. 2008)..............................................................22 Pardini v. Unilever U.S., 961 F. Supp. 2d 1048 (N.D. Cal. 2013)..........................................................6, 7 Parkinson v. Hyundai Motor Am., 258 F.R.D. 580 (C.D. Cal. 2008) .....................................................................19 Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 9 of 37 Page ID #:600 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ix TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Perez v. Nidek Co., 711 F.3d 1109 (9th Cir. 2013)..........................................................................24 Philips v. Ford Motor Co., Case No. 5:14-cv-02989-LHK, slip op. (N.D. Cal. Feb. 12, 2015).....................6 Powers v. Am. Honda Motor Co., 79 P.3d 154 (Idaho 2003).................................................................................17 Priebe v. Autobarn, Ltd., 240 F.3d 584 (7th Cir. 2001)............................................................................18 Redfield v. Mead, Johnson & Co., 512 P.2d 776 (Or. 1973).....................................................................................8 Rikos v. Proctor & Gamble Co., No. 1:11-cv-00226-TSB, 2012 WL 641946 (S.D. Ohio Feb. 28, 2012)..........8, 9 Route v. Mead Johnson Nutrition Co., No. CV 12-7350-GW(JEMx), 2013 WL 658251 (C.D. Cal. Feb. 21, 2013)...........................................................................7, 8, 9 Royal v. Cook, 984 So. 2d 156 (La. Ct. App. 2008) .................................................................14 Salameh v. Tarsadia Hotel, 726 F.3d 1124 (9th Cir. 2013)............................................................................5 Sanford v. Memberworks, Inc., 625 F.3d 550 (9th Cir. 2010)............................................................................21 Sater v. Chrysler Grp. LLC, No. EDCV 14-00700-VAP, 2015 WL 736273 (C.D. Cal. Feb. 20, 2015) ........10 Scaringe v. Holstein, 103 A.D.2d 880 (N.Y. App. Div. 1984) .............................................................8 Sharma v. BMW of N. Am., LLC, No. C-13-2274 MMC, 2014 WL 27955123 (N.D. Cal. June 19, 2014) ............10 Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001)......................................................................13, 15 Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 10 of 37 Page ID #:601 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 x TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Stearns v. Select Comfort Retail Corp., 763 F. Supp. 2d 1128 (N.D. Cal. 2010)..............................................................8 T.W.M. v. Am. Med. Sys., 886 F. Supp. 842 (N.D. Fla. 1995) .....................................................................8 Tarpley v. City of New York, 27 Misc. 3d 1232(A) (N.Y. Civ. Ct. 2010).......................................................14 Tietsworth v. Sears, Roebuck & Co., 720 F. Supp. 2d 1123 (N.D. Cal. 2010)............................................................16 Tirabassi v. Chase Home Fin., LLC, No. 14-08790 BRO, 2015 U.S. Dist. LEXIS 43730 (C.D. Cal. Mar. 24, 2015) .........................................................................................................19, 20 Troup v. Toyota Motor Corp., 545 F. App’x. 668 (9th Cir. 2013)....................................................................10 Tsonev v. Kia Motors Am., Inc., No. SACV 16-0120-CJC(DFMx), slip op. (C.D. Cal. Nov. 9, 2016) ...................................................... 7, 11, 12, 13, 19, 20 Voelker v. Porsche Cars N. Am., Inc., 353 F.3d 516 (7th Cir. 2003)............................................................................11 Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135 (1986)............................................................................10 Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012)..........................................................................22 Zamora v. Zuni Solar, No. 2:16-cv-01260-ODW-KS, 2016 U.S. Dist. LEXIS 83256 (C.D. Cal. June 27, 2016)............................................................................................19, 20 STATUTES 15 U.S.C. § 2310...................................................................................................19 28 U.S.C. § 2201...................................................................................................19 28 U.S.C. § 2202...................................................................................................19 Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 11 of 37 Page ID #:602 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 xi TOYOTA’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Cal. Civ. Code § 1790.3........................................................................................16 Cal. Civ. Code § 1792.............................................................................................9 Cal. Civ. Code § 1793.2..........................................................................................9 Cal. Comm. Code § 2317......................................................................................15 Cal. Comm. Code § 2725......................................................................................16 Ind. Code § 24-5-0.5-2..........................................................................................21 Ind. Code § 24-5-0.5-3..........................................................................................21 Ind. Code § 24-5-0.5-4..........................................................................................21 Ind. Code § 26-1-2-314.........................................................................................16 Ind. Code § 26-1-2-317.........................................................................................15 OTHER AUTHORITIES Fed. R. Civ. P. 8.................................................................................... 5, 13, 14, 23 Fed. R. Civ. P. 9............................................................................. 5, 20, 21, 22, 23 Fed. R. Civ. P. 12....................................................................................................4 Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 12 of 37 Page ID #:603 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG INTRODUCTION Plaintiffs Albert Heber, Douglas Powell, and Jennifer Grammer allege that rodents have chewed through electrical wires in their vehicles. They blame Toyota for this because (though they plead almost no details) they allege it uses soy-based insulation that rodents supposedly like better than plastic. Plaintiffs have sued Toyota for breach of warranty and consumer fraud, but their claims fail for several reasons. First, Plaintiffs are from only two states, Indiana and California. Both standing and choice-of-law principles preclude them from pursuing a nationwide class action. Second, the express-warranty claims fail because, as many courts have held, a warranty like Toyota’s does not cover design defects such as the alleged decision to use soy-based insulation in vehicles. The warranty also does not cover damage or failure resulting directly or indirectly from environmental conditions, such as damage caused by wild animals. Third, the implied-warranty claim fails because an implied warranty cannot contradict an express warranty, because Plaintiffs do not allege their cars were unmerchantable at the time of sale, and because they do not allege privity. Fourth, the failure of Plaintiffs’ state-law warranty claims also defeats their claim under the Magnuson-Moss Warranty Act. That claim would also fail, however, because Plaintiffs have not alleged compliance with the Act’s informal-dispute- resolution requirement. Fifth, the Declaratory Judgment Act claim fails because it is merely duplicative of the warranty claims, and there is nothing left of those. Sixth, none of the plaintiffs have stated a consumer-protection claim. They have alleged neither actionable misrepresentations nor any facts showing that Toyota had a duty to disclose to them the possibility of rodent damage. Finally, Plaintiffs’ claims for equitable relief fail because they have alleged no facts showing either that a legal remedy would be inadequate (assuming they could prevail) or that they are at risk of irreparable injury. Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 13 of 37 Page ID #:604 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG STATEMENT OF FACTS  Toyota’s New Vehicle Limited Warranty Toyota’s express warranty covers “repairs and adjustments needed to correct defects in materials or workmanship of any part supplied by Toyota,” subject to certain exceptions, for three years or 36,000 miles, whichever comes first. Second Am. Compl. ¶ 2 & Ex. 1 (Toyota’s New Vehicle Limited Warranty) at 12-13. The exceptions include “damage or failures resulting directly or indirectly” from theft, negligence, improper maintenance, water contamination, or “[a]irborne chemicals, tree sap, road debris (including stone chips), rail dust, salt, hail, floods, wind storms, lightning and other environmental conditions.” SAC Ex. 1 at 13. The warranty also informs consumers that they must use informal-dispute-resolution procedures before seeking remedies under the Magnuson-Moss Warranty Act, and provides contact information relating to the use of those procedures. Id. at 9, 15.  Heber’s Allegations Albert Heber alleges he bought a 2012 Toyota Tundra on December 29, 2012, from a Toyota dealership in Indiana. SAC ¶ 10. He does not allege that he did this in reliance on representations by Toyota or anyone else. In October 2013, Heber took his vehicle to the dealership because the “check engine” light was on. SAC ¶ 11. The dealership advised plaintiff that rodents had damaged the “EVAP tube” or “vapor fuel hose,” which is part of the emissions system. Id. at ¶¶ 2, 11; see id., Ex. 2 at 3. After being told the warranty did not cover this damage, Heber decided not to have it repaired. Id. Note that although Plaintiffs twice refer to this as “wiring” (SAC ¶¶ 2, 11), it is not an electrical component and Plaintiffs cite no facts suggesting it is; nor do Plaintiffs allege soy-based insulation is used with any part other than electrical wiring. Eight months and about 2,300 miles later, in June 2014, Heber took his vehicle back to the dealership because several dashboard lights were on, including the “check engine” light. SAC ¶¶ 3, 12. Repair records show that a technician found “harness and Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 14 of 37 Page ID #:605 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG ground straps broken/chewed through.” Id., Ex. 2 at 2, Ex. 3 at 1. Plaintiffs allege that “harness” refers to the gas tank wiring harness, but do not allege that “ground straps” involve wiring or insulation (in fact these are metal grounding straps). Id. ¶ 12. Plaintiffs allege Heber paid to replace both components but not to repair the EVAP system, though he was told the “check engine” light would stay on until that was fixed. Id., Ex. 2 at 1. In June 2015, Heber again took his vehicle to the dealership complaining about rodent damage. SAC ¶¶ 4, 13. Told again that the warranty does not cover rodent damage, he took the vehicle to a third-party repair shop to repair certain wiring.1 Id. ¶¶ 4, 13. He again declined to have the vapor fuel hose repaired, however. Id. ¶¶ 11, 13.  Powell’s Allegations Douglas Powell alleges that he bought a 2016 Toyota RAV4 in July 2016. SAC ¶ 15. Like Heber, he says nothing about the transaction, and so does not allege reliance on any representations. He also does not allege where he bought it or from whom, although he states in his venue affidavit that he bought a 2012 (not 2016) Toyota RAV4 in California from Antioch Toyota. Id., Ex. 7. Powell alleges that on September 12, 2016, the RAV4 would not start, and a tech found that “a rodent had damaged the main engine compartment resulting in damage to the electrical harness,” which had to be replaced. Id. ¶¶ 16-17, Ex. 5.  Grammer’s Allegations Jennifer Grammer alleges that she owns a 2012 Toyota Corolla, but does not allege where or when she bought it (or even if she bought it), who she bought it from, whether it was new or used, or any other facts about the transaction. SAC ¶ 19. She alleges that the “check engine” light went on in August 2016 while she was driving on the freeway, and that an unidentified mechanic “informed her that a rodent had chewed through the wiring that corresponded to the transmission speed sensor” in the 1 Plaintiffs have not attached the repair shop invoice. Exhibit 3 to the SAC is actually the invoice for the Toyota dealership’s services in June 2014, discussed above. Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 15 of 37 Page ID #:606 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Corolla. Id. ¶¶ 20-21. She paid to replace the wiring and sensor. Id. ¶ 21. Plaintiffs have not attached this repair record.  Plaintiffs’ Theory of the Case Plaintiffs allege that “a number of car manufacturers,” including Toyota, have recently begun using soy-based wiring insulation in vehicles. SAC ¶ 28. According to Plaintiffs, however, this material is “ill-suited to perform its intended function,” not because it fails to insulate, but because it is “a material that [is] highly attractive to rodents and [other] animals,” who may show up and “feast[ ] upon” it. Id. ¶¶ 1, 30. Though Plaintiffs include a heading referring to “TOYOTA’S KNOWLEDGE OF THE DEFECT,” they never actually allege any facts showing what Toyota supposedly knew or when it had that knowledge. See SAC ¶¶ 27-35. They allege that rodents’ love for soy-based insulation is “widely known within the automotive industry generally,” SAC ¶ 32, but to support this they cite only a single news report involving Honda vehicles that aired in Cleveland, Ohio, in August 2013. Id. ¶¶ 32-34. Plaintiffs also allege that a “cursory online search” reveals a “wealth of complaints” by other unidentified owners of Toyota vehicles who have “suffered the same fate as Plaintiffs….” Id. ¶ 35. But Plaintiffs allege no facts showing when these complaints were supposedly made, what they said, who made them, or where they were posted, much less that Toyota was or would necessarily have been aware of them. LEGAL STANDARD To survive a motion to dismiss under Rule 12(b)(6), a complaint must allege facts setting forth a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Labels, conclusions, blanket assertions, and recitations of a claim’s legal elements are not “facts” and need not be accepted as true. Iqbal, 556 U.S. at 678-79; Twombly, 550 U.S. at 555. Further, it is not enough to allege facts “merely consistent with” liability or showing only that entitlement to relief is possible. Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 557. The facts must show a viable claim without requiring speculation. Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 16 of 37 Page ID #:607 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Plaintiffs’ consumer-protection claims are also subject to Rule 9(b). See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125, 1127 (9th Cir. 2009) (holding Rule 9(b) applies whenever a claim is “grounded in fraud” even if plaintiffs label it as something else). A plaintiff must “identify the who, what, when, where, and how of the misconduct charged” with particularity. Salameh v. Tarsadia Hotel, 726 F.3d 1124, 1133 (9th Cir. 2013) (internal quotation marks omitted). The type of allegation that “identifies a general sort of fraudulent conduct but specifies no particular circumstances ... is precisely what Rule 9(b) aims to preclude.” Cafasso ex rel. U.S. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1057 (9th Cir. 2011). The particularity requirement applies to concealment or omission claims just as it does to affirmative- misrepresentation claims. Kearns, 567 F.3d at 1126-27. Obviously, a plaintiff alleging only an omission need not identify specific misrepresentations, because that would not be an element of his or her claim. But the particularity requirement applies in full to the elements of whatever fraud claim the plaintiff is making. See, e.g., 389 Orange St. Partners v. Arnold, 179 F.3d 656, 662-63 & n.2 (9th Cir. 1999) (holding requirement applies to each element of state-law claim at issue). There must be sufficient facts pleaded with particularity to describe a plausible claim for relief; that is, fraud claims must be pleaded in compliance with both Rule 8 and Rule 9(b). Cafasso, 637 F.3d at 1054-55. LEGAL DISCUSSION I. Plaintiffs From Two States Cannot Pursue a “Nationwide Class Action.” The named plaintiffs here are from Indiana and California. While they assert causes of action under those two states’ laws, they also attempt to assert several “nationwide” breach-of-warranty claims. SAC ¶¶ 47-86, 125-43. For at least two reasons, those claims should be dismissed. First, these plaintiffs do not have standing to represent citizens of other states who might have been injured in those states by violations of those states’ laws. In a class action, the named plaintiffs must allege and prove that they personally have been Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 17 of 37 Page ID #:608 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG injured, “not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.” Lewis v. Casey, 518 U.S. 343, 357 (1996). Further, at least one named plaintiff must have standing with respect to each claim being made. In re Ditropan XL Antitrust Litig., 529 F. Supp. 2d 1098, 1107 (N.D. Cal. 2007). It follows, and courts in this circuit have repeatedly held, that where “a representative plaintiff is lacking for a particular state, all claims based on that state’s laws are subject to dismissal” because no named plaintiff has standing to assert them. See Mollicone v. Universal Handicraft, Inc., No. 2:16-cv-07322-CAS(MRWx), 2017 WL 440257, at *9-10 (C.D. Cal. Jan. 30, 2017) (noting that “the majority of courts to consider this question” have so held; citing cases); Corcoran v. CVS Health Corp., 169 F. Supp. 3d 970, 990 (N.D. Cal. 2016) (stating that courts “routinely” dismiss such claims); Morales v. Unilever U.S., Civ. No. 2:13-2213 WBS, 2014 WL 1389613, at *4-6 (E.D. Cal. Apr. 9, 2014); Philips v. Ford Motor Co., Case No. 5:14-cv-02989- LHK, slip op. at pp. 12-13 (N.D. Cal. Feb. 12, 2015); In re Carrier IQ, Inc. Consumer Privacy Litig., 78 F. Supp. 3d 1051, 1069-75 (N.D. Cal. 2015); Pardini v. Unilever U.S., 961 F. Supp. 2d 1048, 1061 (N.D. Cal. 2013).2 Here, representative plaintiffs are lacking for 48 of the 50 states. It makes no difference that one of the “nationwide” claims is brought under the federal Magnuson-Moss Warranty Act. SAC ¶¶ 69-76. That act does not create substantive rights or standing, it merely provides a federal cause of action to enforce warranty rights created by state law. Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1022 n.3 (9th Cir. 2008) (holding Magnuson-Moss claims “stand or fall” with the state claims). The Court should therefore dismiss all but the Indiana and California claims on this basis. 2 See also Granfield v. NVIDIA Corp., C 11-05403 JW, 2012 WL 2847575, at *3-4 (N.D. Cal. July 11, 2012); In re Flash Memory Antitrust Litig., 643 F. Supp. 2d 1133, 1163-64 (N.D. Cal. 2009); In re Actimmune Mktg. Litig., No. C 08-02376 MHP, 2009 WL 3740648, at *17 (N.D. Cal. Nov. 6, 2009); Ditropan XL, 529 F. Supp. 2d at 1107. Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 18 of 37 Page ID #:609 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Other courts have reached the same result by applying a choice-of-law analysis. Here, for example, presumably Plaintiffs either seek to apply Indiana or California law to every member of the “nationwide” class, or will ask the Court to apply 50 sets of state laws to the class (or 50 subclasses) even though there are only two named plaintiffs from two states. Given the choice-of-law, standing and manageability problems inherent in such cases, as well as the burden unfairly imposed on defendants, courts have been increasingly unwilling to entertain such arguments and have dismissed them at the pleading stage. This Court should do likewise. For example, the Ninth Circuit has held that a plaintiff cannot pursue nationwide consumer-protection claims because the relevant state laws vary significantly. Mazza v. Am. Honda Motor Co., 666 F.3d 581, 589-94 (9th Cir. 2012). The Mazza court was reviewing a class-certification order, but this is a determination courts can make on the pleadings and have done so in many cases. See Frezza v. Google, Inc., No. 5:12-CV-00237-RMW, 2013 WL 1736788, at *5-6 (N.D. Cal. Apr. 22, 2013) (stating that “the principle articulated in Mazza applies generally and is instructive even when addressing a motion to dismiss”); see also, e.g., Tsonev v. Kia Motors Am., Inc., No. SACV 16-0120-CJC(DFMx), slip op. at 9-11 (C.D. Cal. Nov. 9, 2016) (granting motion to strike nationwide class allegations from complaint); Glenn v. Hyundai Motor Am., No. SA CV 15-2052-DOC (KESx), 2016 WL 3621280, at *10 & n.9 (C.D. Cal. June 24, 2016) (same); Davison v. Kia Motors Am., Inc., SA CV 15- 00239-CJC(RNBx), 2015 WL 3970502, at *3 (C.D. Cal. June 29, 2015) (same).3 Other courts have held that the same principle defeats any attempt to pursue a “nationwide” warranty action, whether for express or implied warranty. See Route v. 3 A host of cases have applied Mazza in this way, in fact. Frenzel v. AliphCom, 76 F. Supp.3 d 999, 1006-10 (N.D. Cal. 2014); Pardini, 961 F. Supp. 2d at 1061; Granfield, 2012 WL 2847575, at *3-4; Littlehale v. Hain Celestial Grp., Inc., No. 11- cv-06342-PJH, 2012 WL 5458400, at *1-2 (N.D. Cal. July 2, 2012). Courts elsewhere have reached similar results. See, e.g., Durocher & Ass’n , No. 1:13-cv-01570, 2015 WL 1505675, at *5-7, nn.2-4 (S.D. Ind. Mar. 31, 2015) (collecting dozens of cases; granting motion to strike). Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 19 of 37 Page ID #:610 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Mead Johnson Nutrition Co., No. CV 12-7350-GW(JEMx), 2013 WL 658251, at *7-9 (C.D. Cal. Feb. 21, 2013) (applying Mazza; granting motion to strike nationwide-class allegations regarding warranty claims); Rikos v. Proctor & Gamble Co., No. 1:11-cv- 00226-TSB, 2012 WL 641946, at *5-7 (S.D. Ohio Feb. 28, 2012) (same). As those courts recognized, there are at least three material differences among the states’ warranty laws that compel this result: privity, reliance, and notice.  Some states require privity (usually for implied-warranty claims), some do not, and some require it in certain circumstances but not others.4  Some states require a plaintiff to prove reasonable reliance to maintain a warranty claim, others do not, and still others apply a burden-shifting analysis.5  Similarly, some states require notice to the manufacturer, some require it only to the immediate seller, and others do not require notice at all.6 4 See, e.g., T.W.M. v. Am. Med. Sys., 886 F. Supp. 842, 844 (N.D. Fla. 1995) (under Florida law, strict privity required); Hyundai Motor Am., Inc. v. Goodin, 822 N.E.2d 947 (Ind. 2005) (privity required for implied-warranty claims against manufacturer); Fortune View Condo. Ass’n v. Fortune Star Dev. Co., 90 P.3d 1062, 1065 (Wash. 2004) (privity not required for express-warranty claim); Fieldstone Co. v. Briggs Plumbing Prods., Inc., 54 Cal. App. 4th 357, 369 n.10 (1997) (privity required unless plaintiff acted in reliance on written representations). 5 See, e.g., Lutz Farms v. Asgrow Seed Co., 948 F.2d 638, 644-45 (10th Cir. 1991) (Colorado law; reliance not required for express-warranty claim); Baughn v. Honda Motor Co., 727 P.2d 655, 669 (Wash. 1986) (reliance not required, but plaintiff must show awareness of representations); Scaringe v. Holstein, 103 A.D.2d 880, 880 (N.Y. App. Div. 1984) (reliance necessary for express-warranty claim); Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135, 142 (1986) (reasonable reliance required for express-warranty claim); Cipollone v. Liggett Grp., Inc., 893 F.2d 541, 569 n.34 (3d Cir. 1990) (New Jersey law; holding plaintiff can trigger rebuttable presumption by alleging awareness, but defendant can shift burden back to plaintiff to prove reliance directly); rev’d in part on other grounds, 505 U.S. 504 (1992). 6 See, e.g., Redfield v. Mead, Johnson & Co., 512 P.2d 776, 781 (Or. 1973) (notice required for breach-of-warranty claim), with Stearns v. Select Comfort Retail Corp., 763 F. Supp. 2d 1128, 1142-43 (N.D. Cal. 2010) (notice required unless consumer did not buy product from manufacturer directly), Cooley v. Big Horn Harvestore Sys., Inc., 813 P.2d 736, 742 (Colo. 1991) (notice required to immediate seller but not remote manufacturer), and Fischer v. Mead Johnson Labs., 41 A.D.2d 737, 737 (N.Y. App. Div. 1973) (notice not required in consumer transactions). Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 20 of 37 Page ID #:611 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Just as in Mazza and similar cases, therefore, these differences present a true conflict of laws that precludes Plaintiffs from maintaining a “nationwide” action. Mazza, 666 F.3d at 591-92; Route, 2013 WL 658251, at *7-9; Rikos, 2012 WL 641946, at *5-7. The same principles apply to Plaintiffs’ Magnuson-Moss claim, because that claim is derivative of the underlying state-law claims. The Magnuson-Moss Act does not create substantive rights, it simply provides a federal cause of action for breach of warranty that requires the application of state warranty law. See Keegan v. Am. Honda Motor Co., 838 F. Supp. 2d 929, 954 (C.D. Cal. 2012). As a result, all the same variations and conflicts would preclude a nationwide Magnuson-Moss claim. Finally, to the extent Plaintiffs are asserting Song-Beverly Act claims on a nationwide basis (see SAC ¶¶ 125-143), that effort would also fail because the Song- Beverly Act only applies to goods bought in California. See, e.g., Cal. Civ. Code §§ 1792 (stating that consumer goods “sold at retail in this state” shall be accompanied by an implied warranty); 1793.2 (imposing requirements applicable where express warranty is provided for “consumer goods sold in this state”); Keegan, 838 F. Supp. 2d at 945 n.51 (dismissing SBA claims of all out-of-state purchasers). Here not even the named California plaintiffs allege they bought their vehicles in California (though Mr. Powell says he did in his venue affidavit), but even if they had, they could hardly pursue claims on behalf of people who did not (including their co-plaintiff Mr. Heber). For that reason, too, the Court should dismiss all of the claims that are brought on a “nationwide” basis. This case should be, at most, a putative class action under California and/or Indiana law. II. Plaintiffs Do Not Allege a Breach of Express Warranty. The named plaintiffs’ express-warranty claims fail because they are alleging Toyota defectively designed its vehicles when it chose to use soy-based insulation, but the express warranty covers only “repairs and adjustments needed to correct defects in materials or workmanship....” SAC Ex. 1 at 12. Even if that coverage applied, specific exclusions are stated for damage that results “directly or indirectly” from incidents Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 21 of 37 Page ID #:612 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG involving (for example) negligence, water contamination, or various environmental conditions. Id. at 13-14. In short, the express warranty does not apply.7 A. The “vast weight of authority” holds that express warranties like this one do not cover design defects. The Ninth Circuit has held that express warranties that apply to “defects in materials or workmanship” do not cover design defects. Troup v. Toyota Motor Corp., 545 F. App’x. 668, 668-69 (9th Cir. 2013) (applying California law; affirming Gertz v. Toyota Motor Corp., No. CV 10-1089 PSG (VBKx), 2011 WL 3681647, *2-4 (C.D. Cal. Aug. 22, 2011)). In Gertz, the plaintiffs took issue with Toyota’s decision to use resin in making gas tanks, which they claimed allowed the tanks to contract in cold weather, reducing the tanks’ capacity. 2011 WL 3681647, at *1. They alleged that this constituted a “defect in materials or workmanship,” but the district court disagreed. 2011 WL 3681647, at *3. The distinction, it held, is whether the plaintiff alleges a defect in his or her particular vehicle or one that necessarily exists in all vehicles of that model. Id. If the latter, it is a design claim not covered by the warranty. Id. (citing McCabe v. Am. Honda Motor Co., 100 Cal. App. 4th 1111, 1120 (2002)). The Ninth Circuit agreed with this analysis. Troup, 545 F. Appx. at 668. Many other courts in this circuit have held likewise, both before and after Troup. See, e.g., Sater v. Chrysler Grp. LLC, No. EDCV 14-00700-VAP, 2015 WL 736273, at *4 (C.D. Cal. Feb. 20, 2015); Sharma v. BMW of N. Am., LLC, No. C-13- 2274 MMC, 2014 WL 27955123, at *4 (N.D. Cal. June 19, 2014); Horvath v. LG Elecs. MobileComm U.S.A., Inc., No. 3:11-CV-01576-H-RBB, 2012 U.S. Dist. LEXIS 19215, at *13 (S.D. Cal. Feb. 13, 2012). The same is true elsewhere. In fact, as one court put it, the “vast weight of authority” nationwide holds that “materials or workmanship” warranties do not cover design defects. Nelson v. Nissan N. Am, Inc., Civ. No. 11-5712, 2014 WL 7331075, at *2-3 (D.N.J. Dec. 19, 2014) (applying 7 This defeats both the common-law/UCC express-warranty claim (SAC ¶¶ 58-68) and the express-warranty claim brought under the Song-Beverly Act (SAC ¶¶ 136-43). Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 22 of 37 Page ID #:613 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Pennsylvania law; citing cases); see also, e.g., Bruce Martin Constr., Inc. v. CTB, Inc., 735 F.3d 750, 754 (8th Cir. 2013) (Missouri law); Mack Trucks, Inc. v. BorgWarner Turbo Sys., Inc., 508 F. App’x. 180, 184 (3d Cir. 2012) (Pennsylvania law); Voelker v. Porsche Cars N. Am., Inc., 353 F.3d 516, 527 (7th Cir. 2003) (Illinois law); Feuerstein v. Home Depot, U.S.A., Inc., No. 2:12-cv-01062 JWS, 2014 U.S. Dist. LEXIS 78131, at *22-23 (D. Ariz. June 6, 2014) (Arizona law); Cali v. Chrysler Group LLC, No. 10 Civ. 7606(JSR), 2011 WL 383952, at *2 (S.D.N.Y. Jan.18, 2011) (New York law). There appear to be no cases directly on point applying Indiana law, but there is also no reason to think courts in that state would hold differently. Here, just as in Gertz, although Plaintiffs carefully avoid the word “design,” there is no question that the gravamen of their complaint is Toyota’s alleged decision to use a particular material in all its vehicles. See, e.g., SAC ¶¶ 1, 6, 50 (alleging that all 2012 to 2016 Toyota vehicles contain electrical wiring coated with soy-based insulation); 28 (“a number of car manufacturers, including Defendant, began replacing the insulation covering its vehicles’ wiring with soy-based insulators”); 30 (alleging that “the selection of soy-based insulation wiring material ... was ill-suited to perform its intended function” (emphasis added)). This is a design-defect claim that Toyota’s express warranty does not cover. Plaintiffs will likely point to a recent decision by Judge Carney holding that similar allegations did suffice, but that case is distinguishable. See Tsonev, supra, slip op. at 7. Most importantly, Kia’s express warranty is very different from Toyota’s; as Judge Carney pointed out, it covers factory installed parts if they “fail to function properly during normal use.” Id. Judge Carney therefore did not consider, and did not need to consider, the great weight of authority holding that “materials or workmanship” warranties such as Toyota’s do not cover design defects. Therefore, Tsonev does not support Plaintiffs’ argument here. Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 23 of 37 Page ID #:614 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG B. The exclusion for damage caused by “environmental conditions” would also apply. Judge Carney did consider and reject the alternative argument that an exclusion for “external forces beyond Kia’s control” should preclude coverage for rodent damage. Tsonev, slip op. at 7. That would come into play here only if the warranty otherwise covered design choices, and as shown above, Toyota’s does not. If it did, this Court should still find that Plaintiffs’ claim would run afoul of the exception in Toyota’s warranty for “environmental conditions.” This provision specifically excludes damage or failures resulting “directly or indirectly” from, among other things, “[a]irborne chemicals, tree sap, road debris (including stone chips), rail dust, salt, hail, floods, wind storms, lightning and other environmental conditions.” SAC ¶¶ 2, 31; Ex. 1 at 13. The common element among all these conditions is that Toyota does not control them, or perhaps more importantly, a consumer is better placed to avoid them than Toyota is to prevent them. Just as Toyota is not responsible for damage caused by weather or road conditions, it is not responsible for damage inflicted by animals. After all, even assuming any alleged soy- based insulation were as tasty as Plaintiffs claim, to cause any damage the rodents would have to be in the area and have access to the vehicle in the first place. (Plaintiffs do not even allege that rodents can smell the soy-based insulation from any distance.) Those, at least, are “environmental conditions” outside Toyota’s control, and so it makes sense that the warranty would exclude them. Judge Carney reasoned that the claim soy-based insulation “attracts rodent damage” distinguishes it from the “acts of God” referenced in Kia’s exclusion. Tsonev, slip op. at 7. But the use of metal in a vehicle could be said to “attract” lightning, and yet the lightning itself would still be an “act of God” (or as Toyota’s warranty puts it, an “environmental condition”), and damage resulting from it would not be covered. Also, Kia’s exclusion does not contain the phrase “directly or indirectly,” and so is narrower than Toyota’s. “Environmental conditions” could Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 24 of 37 Page ID #:615 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG include those that otherwise attract rodents to an area, making the damage they cause an indirect result of those conditions. For that reason, too, Tsonev should not apply. C. Plaintiffs do not allege facts making causation plausible in any event. As shown above, the warranty would not cover Plaintiffs’ claims even if it were true, as they claim, that Toyota’s alleged decision to use soy-based insulation is a “defect’ because the insulation is “highly attractive to rodents and [other] animals” who are drawn to and “feast upon” it. SAC ¶¶ 1, 30. But Plaintiffs only assert that this is the case; they plead no facts at all to support the assertion. To the contrary, they plead facts that are inconsistent with it: according to Mr. Heber, at least one of the rodents that infiltrated his vehicle apparently turned up its nose at the supposedly irresistible wiring and ate the vapor fuel hose instead. Id. ¶ 2, 11. The specific facts Plaintiffs plead therefore undermine their general assertion. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988-89 (9th Cir. 2001) (“[A] plaintiff can ... plead himself out of a claim by including unnecessary details contrary to his claims.”). Under Rule 8, Plaintiffs are required to plead facts that take their complaint across the “line between possibility and plausibility”; pleading facts that are “merely consistent with” liability does not get them where they need to go. Twombly, 550 U.S. at 557. And if there are “two possible explanations” for an event, “only one of which can be true and only one of which results in liability,” it is not enough to offer allegations that are “‘merely consistent with’ [the plaintiff’s] favored explanation but are also consistent with the alternative explanation.” Eclectic Props. E., LLC v. Marcus & Millichap Co., 751 F.3d 990, 996 (9th Cir. 2014) (quoting Twombly). “Something more is needed, such as facts tending to exclude the possibility that the alternative explanation is true....” Id. Here, it is possible that, as Plaintiffs allege, the insulation is so “highly attractive to rodents” that they are drawn to vehicles and wiring they would not otherwise bother with. But it is also possible-and in fact appears to be the case, assuming Mr. Heber’s allegations are true-that rodents will gnaw on whatever they come across and that the soy-based insulation holds no special Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 25 of 37 Page ID #:616 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG charms. Otherwise, it is hard to see why the rodent that attacked his vehicle in 2013 would have gnawed on a fuel hose and left the allegedly delicious soy-based insulation completely untouched. Of course, Plaintiffs are not required to prove their case at the pleading stage, but they are required to plead facts that are sufficient to make their claim plausible. Here, that would mean “facts tending to exclude the possibility” that the rodents infiltrating their vehicles did so for the usual reasons, and when they did choose to gnaw on wiring, did so for reasons that had nothing to do with soy-based insulation. See, e.g., Merrimack Mut. Fire Ins. Co. v. Watkins Mfg. Co., No. 3:13cv123 (JBA), 2015 U.S. Dist. LEXIS 67798, at *10, 20 (D. Conn. May 26, 2015) (noting that “it is common for rodents to chew on electrical wires,” and there are “many reported instances” of this that have resulted in fires); Royal v. Cook, 984 So. 2d 156, 163 (La. Ct. App. 2008) (taking “judicial notice that rodents can gnaw through wood, electrical wiring, sheetrock, et cetera”); Tarpley v. City of New York, 27 Misc. 3d 1232(A) (N.Y. Civ. Ct. 2010) (noting that a “rat had eaten some of the [1997 model year] car’s inner wiring”). Because Plaintiffs plead no such facts-and actually plead facts that are inconsistent with their own explanation-they have not complied with Rule 8. D. Plaintiffs do not allege problems arose during the warranty period. To satisfy Rule 8, “[a] plaintiff must allege ‘the exact terms of the warranty’” that was breached, not just allege there was one. In re Sony PS3 Other OS Litig., 551 F. App’x. 916, 919 (9th Cir. 2014) (quoting Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135 (1986)). Here, Ms. Grammer alleges only that she owns a 2012 Toyota Corolla. (SAC ¶¶ 19-21.) She does not allege when she bought it (or even if she bought it), or if it was new or used at the time. Id. Like most automotive warranties, Toyota’s lasts three years from the date of the first sale. SAC, Ex. 1, at 12; see also Daugherty v. Am. Honda Motor Co., Inc., 144 Cal. App. 4th 824, 835 (2006) (holding that similar vehicle warranty was not an agreement to repair latent defects that cause a malfunction after the warranty period expires, and that reasonable Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 26 of 37 Page ID #:617 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG consumers would not think otherwise). Grammer does not allege what that date was, and so she necessarily fails to allege the express warranty was in effect in August 2016 when she says the malfunction occurred. SAC ¶ 20. It is possible the first sale was not until August 2013 (although that is extremely unlikely for a 2012-model-year vehicle), but again, alleging facts showing only that entitlement to relief is possible is not enough to state a claim. Iqbal, 550 U.S. at 678; Twombly, 550 U.S. at 557. Similarly, Powell’s declaration states he purchased a 2012 RAV4 in 2016. SAC, Ex. 7 ¶ 3; see also Sprewell, 266 F.3d at 988 (holding allegations may be contradicted by an exhibit attached to complaint). But he does not allege whether it was new or used at the time, so he necessarily fails to allege the express warranty was in effect in September 2016 when he says the malfunction occurred. SAC ¶ 16. In addition, while it is possible the warranty’s mileage limit had not been reached at the time their vehicles were damaged, neither Grammer nor Powell actually allege this. Both their warranty claims would fail for this reason as well. III. The Implied-Warranty Claims Fail for Similar Reasons and Also Because Plaintiffs Have Not Alleged Their Vehicles Were Unmerchantable. Plaintiffs also assert claims for breach of the implied warranty of merchantability. SAC ¶¶ 77-86 (common law); 125-135 (Song-Beverly Act). These fail for two reasons. First, the implied warranty must be read consistently with the express warranty, which as shown above does not cover design defects. Second, Plaintiffs have not alleged their cars were unmerchantable at the time of delivery. A. The express warranty displaces any applicable implied warranty. Under the UCC, “[e]xpress warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose.” Ind. Code § 26-1- 2-317(c); Cal. Comm. Code § 2317(c); see Grodzitsky v. Am. Honda Motor Co., No. 2:12-cv-1142-SVW-PLA, 2013 WL 2631326, at *13 (C.D. Cal. June 12, 2013) (Wilson, J.) (holding that UCC implied warranty of merchantability was limited by express warranty; citing N.J. Transit Corp. v. Harsco Corp., 497 F.3d 323, 329 (3d Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 27 of 37 Page ID #:618 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Cir. 2007)); see also, e.g., Consol. Papers, Inc. v. Dorr-Oliver, Inc., 451 N.W.2d 456, 462 (Wis. Ct. App. 1989) (holding express warranty disclaiming damage for “decomposition by chemical action” overrides any implied warranty of merchantability for corrosion damage). Therefore, because Toyota’s express warranty does not cover the alleged defect Plaintiffs assert, it displaces any implied warranty of merchantability that might otherwise cover it. The same is true to the extent Plaintiffs seek to bring their implied-warranty claims under California’s Song-Beverly Act. The Act specifically provides that it does not affect the rights and obligations of parties under the Commercial Code unless there is a conflict (in which case the Act controls). Cal. Civ. Code § 1790.3. The Act says nothing that conflicts with the general rule of section 2-317, and so that rule applies to the Song-Beverly claims as well. B. Plaintiffs have not alleged their cars were unmerchantable at the time of delivery or otherwise. Plaintiffs’ implied-warranty claim would fail in any event simply because they have not alleged their vehicles were unmerchantable. The warranty of merchantability “requires only that a vehicle be reasonably suited for ordinary use. It need not be perfect in every detail so long as it ‘provides for a minimum level of quality.’” Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962, 980 (C.D. Cal. 2014) (quoting Am. Suzuki v. Superior Court, 37 Cal. App. 4th 1291, 1296 (1995)); Brand v. Hyundai Motor Am., 226 Cal. App. 4th 1538, 1546 (2014); Keegan, 838 F. Supp. 2d at 945. See also Ind. Code § 26-1-2-314(2)(c) (a good is “merchantable” if it is “fit for the ordinary purposes for which such goods are used”). “The mere manifestation of a defect by itself does not constitute a breach…. Instead, there must be a fundamental defect that renders the product unfit for its ordinary purpose.” Tietsworth v. Sears, Roebuck & Co., 720 F. Supp. 2d 1123, 1142 (N.D. Cal. 2010). Importantly, the defect, even if “latent,” must exist at the time of delivery. See Cal. Comm. Code § 2725 (“A breach of warranty occurs when tender of delivery is made ….”); Mexia v. Rinker Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 28 of 37 Page ID #:619 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Boat Co., Inc., 174 Cal. App. 4th 1297, 1304 (2009) (under the UCC, “the product is either merchantable or not (and a breach of the implied warranty occurs or not) only at the time of delivery.”) Plaintiffs do not allege that a vehicle that incorporates soy-based materials is unfit to drive at the time of delivery, or that it will ever become that way due to some failure in the materials or workmanship involved. That is, they do not allege soy-based insulation does not perform its function perfectly well. They allege only that the “defect” might manifest sometime in the future as a result of an external intervention-namely a mouse, squirrel, or other animal getting inside the vehicle and causing damage. See SAC ¶¶ 30 (alleging that the use of soy-based insulation “results in a defect in material, and it results in a defect in workmanship” if a rodent chews the wires; emphasis added). Even assuming it were true that rodents not only like the taste of soy-based materials but also that it can attract them from a distance, that would not make the vehicle itself inherently unmerchantable-especially not at the time of delivery. “A product which performs its ordinary function adequately does not breach the implied warranty of merchantability merely because it does not function as well as the buyer would like, or even as well as it could.” Marcus v. Apple Inc., No. C 14- 03824 WHA, 2015 U.S. Dist. LEXIS 2140, at *24-25 (N.D. Cal. Jan. 8, 2015) (quoting Gen. Motors Corp. v. Brewer, 966 S.W.2d 56, 57 (Tex. 1998)); see Powers v. Am. Honda Motor Co., 79 P.3d 154, 157 (Idaho 2003) (holding that “the implied warranty [of merchantability] cannot be read to require the distribution of a mouse proof vehicle.”). In short, Plaintiffs do not allege that Toyota vehicles are unfit for driving; they allege only that the vehicles might become unfit for driving if certain external conditions occur. That does not state a claim for breach of implied warranty. C. Plaintiffs do not allege privity. The named plaintiffs’ implied-warranty claims here would also fail because none of them allege privity. As mentioned above, Indiana requires vertical privity for Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 29 of 37 Page ID #:620 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG implied-warranty claims against a manufacturer, and California also requires it for claims brought under the Commercial Code. Hyundai Motor Am, 822 N.E.2d at 952 (Indiana law); Clemens, 534 F.3d at 1023-24 (California law). Here, Ms. Grammer has not alleged privity with anyone. Mr. Heber and Mr. Powell allege they bought from Toyota dealerships, but that does not put them in privity with Toyota. Nor do they allege facts showing that those dealerships were agents of Toyota. See, e.g., Herremans v. BMW of N. Am., LLC, No. CV 14-02363 MMM (PJWx), 2014 WL 5017843, at *6-7 (C.D. Cal. Oct. 3, 2014) (refusing to presume dealer was an agent in the absence of facts supporting that claim). In the absence of any such facts, or facts showing vertical privity, these claims fail. Keegan, 838 F. Supp. 2d at 953-54. IV. Plaintiffs Fail to State a Claim Under the Magnuson-Moss Warranty Act. A. Plaintiffs fail to allege viable state-law warranty claims. The Magnuson-Moss Act does not create substantive rights; it merely provides a federal cause of action to enforce warranty rights created by state law. Clemens, 534 F.3d at 1022 n.3. Accordingly, the “disposition of the state law warranty claims determines the disposition of the Magnuson-Moss Act claims.” Id.; see also Daugherty, 144 Cal. App. 4th at 833; Priebe v. Autobarn, Ltd., 240 F.3d 584, 587 (7th Cir. 2001). As discussed above, because plaintiffs’ state-law warranty claims fail, their Magnuson-Moss claim also fails as a matter of law. See Birdsong v. Apple, Inc., 590 F.3d 955, 958 (9th Cir. 2009) (dismissing Magnuson-Moss claim after concluding plaintiffs had failed to state a claim for breach of express or implied warranty); Clemens, 534 F.3d at 1022 (same). B. Plaintiffs also fail to allege compliance with informal dispute resolution procedures. Plaintiffs’ Magnuson-Moss claim should also be dismissed because Plaintiffs do not allege compliance with the Act’s requirement to exhaust any informal dispute resolution provided in the written warranty before filing suit. 15 U.S.C. § 2310(a)(3). The warranty specifies that all customers “must use the Dispute Settlement Program Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 30 of 37 Page ID #:621 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG (or, in California, the [California Dispute Settlement Program]) before seeking remedies through a court action pursuant to the Magnuson-Moss Warranty Act. (SAC Ex. 1 at 9, 15.) Plaintiffs do not allege they did this, and so the claim should be dismissed for that reason as well. See In re MyFord Touch Consumer Litig., 46 F. Supp. 3d 936, 989 (N.D. Cal. 2014); see also Parkinson v. Hyundai Motor Am., 258 F.R.D. 580, 593 (C.D. Cal. 2008) (acknowledging “strong presumption in favor of encouraging alternative dispute resolution” under the Act and declining to excuse plaintiffs’ failure to use the informal dispute resolution service). Plaintiffs may point out that Judge Carney rejected this argument in Tsonev. He did, but only because he found the plaintiff in that case had alleged “repeated attempts to convince Kia to resolve the dispute” in several different ways, which he found enough to support the inference that informal dispute resolution would have been futile. Tsonev, slip op. at 8. There are no such allegations here. V. The Declaratory Judgment Act Claim Should Be Dismissed. The Declaratory Judgment Act does not create an independent cause of action. See 28 U.S.C. § 2201, 2202; Fiedler v. Clark, 714 F.2d 77, 79 (9th Cir. 1983) (“The Declaratory Judgment Act does not provide an independent jurisdictional basis for suit in federal court.... It only permits the district court to adopt a specific remedy when jurisdiction exists.”); Del Monte Int’l GmbH v. Del Monte Corp., 995 F. Supp.2d 1107, 1124 (C.D. Cal. 2014). “The purpose of declaratory relief ‘is to afford a new form of relief where needed and not to furnish a litigant with a second cause of action for the determination of identical issues.’” Tirabassi v. Chase Home Fin., LLC, No. 14-08790 BRO, 2015 U.S. Dist. LEXIS 43730, at *31 (C.D. Cal. Mar. 24, 2015). The latter is exactly how Plaintiffs are using the Declaratory Judgment Act here. Where a declaratory judgment claim is duplicative of a simultaneously pleaded breach-of-contract claim, the former should be dismissed. See, e.g., Zamora v. Zuni Solar, No. 2:16-cv-01260-ODW-KS, 2016 U.S. Dist. LEXIS 83256, at *14-16 (C.D. Cal. June 27, 2016) (dismissing declaratory relief claim because it was “duplicative of Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 31 of 37 Page ID #:622 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG the breach of contract claim”); Tirabassi, 2015 U.S. Dist. LEXIS 43730, at *31-32 & n.12 (dismissing request for declaratory relief because it did not provide any relief beyond what plaintiff may seek in connection with substantive claims); but see Tsonev, slip op. at 7. Here, Plaintiffs’ first cause of action simply seeks a “determination and declaration” regarding “Defendant’s duties and Plaintiff’s and the class members’ rights with respect to obtaining coverage … for the allegedly defective soy-based insulated wiring in the Class Vehicles.” SAC ¶ 54. In other words, they seek to establish that Toyota has breached its warranty and that they are entitled to damages. This merely duplicates their express-warranty claims, and the cause of action should therefore be dismissed. VI. Plaintiffs’ Consumer-Protection Claims Also Fail. A. Plaintiffs’ claims are subject to Rule 9(b). The California plaintiffs’ statutory consumer-protection claims must be pleaded in accordance with Rule 9(b). Kearns, 567 F.3d at 1125. As the Ninth Circuit held in Kearns, so long as plaintiffs “allege a unified course of fraudulent conduct and rely entirely on that course of conduct as the basis of [a] claim,” then the claim is “grounded in fraud” and subject to Rule 9(b), even if they try to avoid that rule by calling the claim something else, such as a claim of “unfair” or “unlawful” conduct challenged under a consumer statute. Id. at 1125-27; see also In re iPhone Application Litig., 6 F. Supp. 3d 1004, 1013 (N.D. Cal. 2013) (holding that misrepresentation was the gravamen of plaintiffs’ claims regardless of label; granting summary judgment in Apple’s favor). Here, too, the gravamen of plaintiffs’ non-warranty claims is that Toyota made false and misleading statements about the quality and reliability of its vehicles. Although they mention the words “unfair” or “unlawful,” this is not enough to avoid Rule 9(b). Kearns, 567 F.3d at 1126-27. Heber’s claim under the Indiana DCSA is also subject to the heightened pleading requirement. To state a claim under the IDCSA, a plaintiff must allege that the defendant engaged in one or more deceptive acts, as defined in the Act. See Ind. Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 32 of 37 Page ID #:623 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Code § 24-5-0.5-4(a). There are two possible types of actionable deceptive acts under the Act-“uncured”8 deceptive acts and “incurable” deceptive acts. McKinney v. State, 693 N.E.2d 65, 68 (Ind. 1998). An “incurable” deceptive act is defined as “‘a deceptive act done by a supplier as part of a scheme, artifice, or device with intent to defraud or mislead.’” Id. (quoting Ind. Code § 24-5-0.5-2(8)). It follows that intent to defraud or mislead is a required element of an “incurable” deceptive act. Id. at 67, 68 (“We hold that intent on the part of the violator is required under the Act for ‘incurable’ deceptive acts.”); see also Ind. Code § 24-5-0.5-3(a) (listing acts constituting deceptive practices). Here, Heber alleges the defect is “incurable.” (SAC ¶ 90.) Therefore, the heightened pleading requirements of Rule 9(b) must be applied “[b]ecause an incurable deceptive act requires an intent to defraud.” Lyons v. Leatt Corp., No. 4:15-CV-17-TLS, 2015 WL 7016469, at *4 (N.D. Ind. Nov. 10, 2015). B. Plaintiffs have not pleaded their claims with particularity. Plaintiffs are required to specify the “who, what, when, where, and how of the misconduct charged” in order to comply with Rule 9(b). Kearns, 567 F.3d at 1126; accord Lyons, 2015 WL 7016469, at *2 (requiring same for IDCSA claim). To avoid dismissal, a plaintiff alleging affirmative misrepresentations must “state the time, place, and specific content of the false representations as well as the ... parties to the misrepresentation.” Sanford v. Memberworks, Inc., 625 F.3d 550, 558 (9th Cir. 2010). While a plaintiff alleging only fraud by omission obviously need not allege the details of any representation, because that is not an element of his or her claim, the particularity requirement otherwise applies. See Kearns, 567 F.3d at 1126-27. First, Plaintiffs identify no representations at all on which they might have relied. To the extent they point to statements that appear in the warranty documents, those are textbook examples of non-actionable opinion. For example, plaintiffs allege that Toyota represented it is “dedicated to building products of the highest quality and 8 Plaintiff has not alleged an “uncured” act under the IDCSA, because he has not alleged he provided proper notice before bringing suit. Ind. Code § 24-5-0.5-2(7). Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 33 of 37 Page ID #:624 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG reliability,” that its “excellent warranty coverage is evidence that [Toyota] stand[s] behind the quality of [its] vehicles,” and it is confident that it will provide its customers “with many years of enjoyable driving.” SAC ¶ 90. These are not actionable statements. See, e.g., Oestreicher v. Alienware Corp., 544 F. Supp. 2d 964, 973-74 (N.D. Cal. 2008), aff’d, 322 F. App’x 489 (9th Cir. 2009) (holding representation that computer was “packed” with fans “to ensure optimum performance” was not actionable); Elias v. Hewlett-Packard Co., 903 F. Supp. 2d 843, 854-55 (N.D. Cal. 2012) (holding statements such as “full power” and “ultra-reliable performance” were not actionable); Consumer Advocates v. Echostar Satellite Corp., 113 Cal. App. 4th 1351, 1361 (2003) (holding representation of “CD quality” audio was not actionable). Even if those statements were actionable, Plaintiffs do not allege they relied on them or on any others. (Ms. Grammer does not even allege she ever dealt with Toyota or any of its agents.) These are just the kind of conclusory allegations that courts have repeatedly held do not satisfy Rule 9(b). Kearns, 567 F.3d at 1125-26; see also, e.g., In re MyFord Touch, 46 F. Supp. 3d at 953-55 (dismissing affirmative- misrepresentation claims alleged more specifically than Plaintiffs’ claims here); In re Actimmune Mktg. Litig., 2009 WL 3740648, at *11 (rejecting fraud claim based on statements plaintiffs did not allege they heard, saw, or relied on); Jasper v. Abbott Labs., Inc., 834 F. Supp. 2d 766, 773 (N.D. Ill. 2011) (dismissing IDCSA claim when the plaintiff, who alleged false representations in defendant's “marketing materials,” failed to show when and where such marketing statements were made). Nor do Plaintiffs adequately allege a fraud claim based on nondisclosure, mainly because they have not alleged a single fact that would show Toyota actually knew about the alleged “defect” at the time of sale. Such knowledge is a required element of a nondisclosure claim. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1145 (9th Cir. 2012). Here, the only allegations that even touch on this subject are Plaintiffs’ references to an August 2013 TV news report that aired in Cleveland (and Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 34 of 37 Page ID #:625 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG involved a different manufacturer), and a “cursory online search” someone performed that purportedly revealed a “wealth” of complaints by unidentified individuals. SAC ¶¶ 32-35. Even if Plaintiffs had alleged any facts showing Toyota knew about those complaints, complaints do not establish knowledge that there was a defect. At most, complaints “establish[ ] knowledge that there were complaints.” Berenblat v. Apple, Inc., No. 08-4969 JF, 2010 WL 1460297, at *9 (N.D. Cal. Apr. 9, 2010) (emphasis original; holding Apple’s deletion from its own website of over 300 posts about the problem was not enough to show Apple knew of a systemic defect). As Mr. Heber’s own allegations show, even if Toyota had been aware of a particular rodent attack, there would be no reason for it to assume it necessarily was a result of soy-based insulation. Rodents chew on things, whether soy-flavored or not. Plaintiffs’ complaint is utterly devoid of facts that would show Toyota knew of a “defect” at the time they bought their vehicles (or, for that matter, that it does today), and for that reason as well their consumer-fraud claims fail.9 VII. Plaintiffs’ Equitable Claims Fail Because They Do Not Allege Facts Showing They Have No Adequate Legal Remedy. “It is a basic doctrine of equity jurisprudence that courts of equity should not act ... when the moving party has an adequate remedy at law and will not suffer irreparable injury if denied equitable relief.” Morales v. Trans World Airlines, Inc., 504 U.S. 374, 381 (1992) (internal quotation omitted); see also Dept. of Fish & Game v. Anderson-Cottonwood Irrigation Dist., 8 Cal. App. 4th 1554, 1564 (1992) (describing these requirements as “fundamental”). Plaintiffs demand injunctive relief on a number of theories. But because they do not even allege their legal remedies are 9 Even if Plaintiffs had complied with Rule 9(b), their fraud claims would also fail to comply with Rule 8 because, as discussed above in connection with the warranty claims, they have not alleged facts making their claim of causation plausible. Even if they had alleged reliance, that is, they still would not have adequately alleged that the allegedly concealed defect actually caused the harm of which they complain. Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 35 of 37 Page ID #:626 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG inadequate or that they may suffer irreparable injury, their claims for injunctive relief should be dismissed. Plaintiffs assert claims for legal damages, primarily the cost of repair. See SAC ¶ 68 (alleging entitlement to economic damages by “having had to pay for that repair themselves”). If the defect they allege was covered by Toyota’s warranty, or if they had been defrauded, those legal remedies would compensate them for any harm. See Cal. Med. Ass’n. v. Aetna U.S. Healthcare of Cal., Inc., 94 Cal.App.4th 151, 172 (2001) (dismissing unjust-enrichment claim because contract damages would be adequate); Gardner v. Safeco Ins. Co. of Am., No. 14-cv-02024-JCS, 2014 WL 2568895, at *7-8 (N.D. Cal. June 6, 2014) (also holding contract remedy was adequate). Plaintiffs plead no facts at all to suggest that these remedies would be inadequate, and so they have not alleged a right to equitable relief under the UCL or CLRA, or any other cause of action. See, e.g., Fonseca v. Goya Foods, Inc., No. 14- CV-02989-LHK, 2016 U.S. Dist. LEXIS 121716, at *21 (N.D. Cal. Sept. 8, 2016) (dismissing UCL claims and CLRA claim for injunctive relief because other claims offered adequate remedy at law). Similarly, Plaintiffs do not allege facts showing they are likely to suffer irreparable injury without injunctive relief. To state such a claim, they must plead facts showing they “face[ ] a real or immediate threat of an irreparable injury.” Perez v. Nidek Co., 711 F.3d 1109, 1114 (9th Cir. 2013) (internal punctuation omitted). But here, each plaintiff alleges his or her vehicle has already been fixed, and they plead no facts suggesting further damage is imminent. For that reason, too, their equitable claims should be dismissed. CONCLUSION Plaintiffs do not complain about their vehicles’ fitness or safety; they only seek to hold Toyota liable for potential vehicle damages caused by outside intervention. Plaintiffs have not alleged and cannot allege facts sufficient to state a claim. The vast weight of authority holds that an express warranty like Toyota’s does not cover Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 36 of 37 Page ID #:627 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25 TOYOTA’S MEMO ISO MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG alleged design defects, and that is what Plaintiffs allege by claiming Toyota (like many other manufacturers) made the wrong decision when choosing alleged soy- based insulation for its electrical wires. Plaintiffs cannot plead around this express warranty by asserting causes of action for breach of implied warranty, and their warranty and consumer-protection claims fail for multiple reasons as well. As this is Plaintiffs’ second amended complaint, the Court should dismiss without further leave to amend. Dated: February 27, 2017 Respectfully submitted, SHOOK HARDY & BACON L.L.P. By: /s/ Amir Nassihi Amir Nassihi Frank Rothrock Naoki Kaneko Attorneys for Defendant Toyota Motor Sales U.S.A., Inc. Case 8:16-cv-01525-AG-JCG Document 21 Filed 02/27/17 Page 37 of 37 Page ID #:628 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 DECLARATION OF AMIR NASSIHI ISO MTN TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG Amir Nassihi (SBN 235936) anassihi@shb.com SHOOK, HARDY & BACON L.L.P. One Montgomery, Suite 2700 San Francisco, California 94104-4505 Telephone: 415.544.1900 Facsimile: 415.391.0281 Frank Rothrock (SBN 54452) frothrock@shb.com Naoki Kaneko (SBN 252285) nkaneko@shb.com SHOOK, HARDY & BACON L.L.P. Jamboree Center 5 Park Plaza, Suite 1600 Irvine, California 92614 Telephone: 949.475.1500 Facsimile: 949.475.0016 Attorneys for Defendant TOYOTA MOTOR SALES, U.S.A., INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ALBERT HEBER, on behalf of himself and all others similarly situated, Plaintiff, vs. TOYOTA MOTOR SALES, U.S.A., INC. Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 8:16-cv-01525-AG-JCG Judge: Honorable Andrew J. Guilford DECLARATION OF AMIR NASSIHI IN SUPPORT OF TOYOTA MOTOR SALES, U.S.A., INC.’S MOTION TO DISMISS Date: April 3, 2017 Time: 10:00 a.m. Judge: Hon. Andrew J. Guilford Courtroom: 10-D Complaint Filed: Sept. 2, 2016 Case 8:16-cv-01525-AG-JCG Document 21-1 Filed 02/27/17 Page 1 of 2 Page ID #:629 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 DECLARATION OF AMIR NASSIHI ISO MTN TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG I, Amir Nassihi, declares as follows: 1. I am an attorney licensed to practice before all courts of the State of California and am an attorney with Shook, Hardy & Bacon L.L.P., counsel of record for defendant Toyota Motor Sales, U.S.A., Inc. (“Toyota”). I have personal knowledge of the facts stated herein, and if called as a witness, I could and would competently testify thereto under oath. 2. I have contacted opposing counsel to discuss thoroughly the substance of Toyota’s motion to dismiss at least seven (7) days prior to the filing of this motion. I had telephonic conversations with plaintiffs’ counsel regarding the substance of the motion in late 2016. I further discussed the motion with plaintiffs’ counsel on February 22, 2017. We were unable to resolve the issues I raised in describing the basis for the anticipated motion to dismiss. I declare under penalty of perjury under the laws of the United States and the State of California that the foregoing is true and correct. Executed this 27th day of February 2017, at San Francisco, California. /s/ Amir Nassihi Amir Nassihi Case 8:16-cv-01525-AG-JCG Document 21-1 Filed 02/27/17 Page 2 of 2 Page ID #:630 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 [PROPOSED] ORDER GRANTING TOYOTA MOTOR SALES, U.S.A., INC.’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ALBERT HEBER, on behalf of himself and all others similarly situated, Plaintiff, vs. TOYOTA MOTOR SALES, U.S.A., INC. Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 8:16-cv-01525-AG-JCG Judge: Honorable Andrew J. Guilford [PROPOSED] ORDER GRANTING TOYOTA MOTOR SALES, U.S.A., INC.’S MOTION TO DISMISS Date: April 3, 2017 Time: 10:00 a.m. Judge: Hon. Andrew J. Guilford Courtroom: 10-D [PROPOSED] ORDER Defendant Toyota Motor Sales, U.S.A., Inc.’s Motion to Dismiss came on regularly for hearing on April 3, 2017, in Courtroom 10-D of the above-titled Court. Upon consideration of all the papers filed in connection therewith, and the arguments of counsel, as well as all other papers on file in this action, the Court finds: Defendant Toyota Motor Sales, U.S.A., Inc.’s Motion to Dismiss is GRANTED. Case 8:16-cv-01525-AG-JCG Document 21-2 Filed 02/27/17 Page 1 of 2 Page ID #:631 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 [PROPOSED] ORDER GRANTING TOYOTA MOTOR SALES, U.S.A., INC.’S MOTION TO DISMISS CASE NO. 8:16-CV-01525-AG-JCG IT IS SO ORDERED. DATED: JUDGE ANDREW J. GUILFORD Case 8:16-cv-01525-AG-JCG Document 21-2 Filed 02/27/17 Page 2 of 2 Page ID #:632