David Velasco et al v. Paccar Inc et al

NOTICE OF MOTION AND MOTION to Dismiss Case Plaintiffs' Third Amended Class Action Complaint

C.D. Cal.July 18, 2016

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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH WESTPORT’S NOTICE OF MOTION AND MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2140965v7/103002-0001 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION DAVID VELASCO, et al, individually and on behalf of all similarly-situated consumers, Plaintiffs, vs. PACCAR INC., dba KENWORTH TRUCK COMPANY, INLAND KENWORTH (US) Inc., and WESTPORT FUEL SYSTEMS INC., Defendants. CASE NO. 2:13-cv-09407-R-AS Hon. Manuel L. Real DEFENDANT WESTPORT FUEL SYSTEMS (US) INC. F/K/A WESTPORT FUEL SYSTEM INC.’S: NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ THIRD AMENDED CLASS ACTION COMPLAINT Date: August 15, 2016 Time: 10:00 a.m. Judge: Hon. Manuel L. Real Dept: 8 - 2nd Floor Complaint Filed: December 20, 2013 JASON ANDERSON, State Bar No. 172087 janderson@sycr.com CRAIG A. TAGGART, State Bar No. 239168 ctaggart@sycr.com BRADLEY E. MARRETT, State Bar No. 288079 bmarrett@sycr.com STRADLING YOCCA CARLSON & RAUTH, P.C. 660 Newport Center Drive, Suite 1600 Newport Beach, CA 92660-6422 Telephone: (949) 725-4000 Facsimile: (949) 725-4100 Attorneys for Defendant WESTPORT FUEL SYSTEMS (US) INC. f/k/a WESTPORT FUEL SYSTEMS INC. Case 2:13-cv-09407-R-AS Document 56 Filed 07/18/16 Page 1 of 3 Page ID #:1252 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -1- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2140965v7/103002-0001 TO ALL PARTIES AND TO THEIR ATTORNEY OF RECORD: PLEASE TAKE NOTICE that on August 15, 2016 at 10:00 a.m., or as soon thereafter as the matter may be heard, in the Courtroom of the Honorable Manuel L. Real, 312 North Spring Street, Los Angeles, California, Defendant Westport Fuel Systems (US) Inc. f/k/a Westport Fuel Systems Inc. (“Westport”) will, and hereby do, move to dismiss Plaintiffs’ Third Amended Complaint (“TAC”), and each claim for relief asserted therein, on the following grounds. Specifically, Westport moves to dismiss claims one through five, pursuant to Federal Rules of Civil Procedure 8(a), 9(b), 12(b)(1) and 12(b)(6) on the grounds that the TAC fails to state any claim on which relief can be granted and does not plead their claims with particularity. The TAC does not state a viable claim for breach of express warranty, breach of the implied warranty of merchantability, breach of implies warranty of fitness for particular purpose, and violations of California’s Unfair Competition Law. Plaintiffs also lack standing to bring their UCL claims. Defendant’s Motion is based on this notice, the motion, the memorandum of points and authorities, all other documents in the record, and any arguments that may be presented at any hearing on the Motion. Westport also joins in Defendant PACCAR Inc. and Inland Kenworth (US) Inc.’s (1) motions to dismiss under Federal Rule of Civil Procedure 12(b)(6) and 12(b)(1), and (2) motions to strike paragraphs 123, 135 and prayer (c) from the TAC under Federal Rule of Civil Procedure 12(f). DATED: July 18, 2016 STRADLING YOCCA CARLSON & RAUTH, P.C. By: s/Craig A. Taggart Craig A. Taggart Bradley E. Marrett Attorneys for Defendant WESTPORT FUEL SYSTEMS (US) INC. f/k/a WESTPORT FUEL SYSTEMS INC. Case 2:13-cv-09407-R-AS Document 56 Filed 07/18/16 Page 2 of 3 Page ID #:1253 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -1- CERTIFICATE OF SERVICE LITIOC/2140965v7/103002-0001 CERTIFICATE OF SERVICE I am employed in the County of Orange, State of California. I am over the age of 18 and not a party in the within action. My business address is at 660 Newport Center Drive, Suite 1600, Newport Beach, CA 92660. On the date set forth below, I served the foregoing document(s) described as: DEFENDANT WESTPORT FUEL SYSTEMS (US) INC. F/K/A WESTPORT FUEL SYSTEM INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ THIRD AMENDED CLASS ACTION COMPLAINT on all other parties and/or their attorney(s) of record in this action BY CM/ECF SYSTEM. I certify that I cause a copy of the above document to be served via the court’s CM/ECF System. DATED: July 18, 2016 s/Craig A. Taggart Craig A. Taggart Case 2:13-cv-09407-R-AS Document 56 Filed 07/18/16 Page 3 of 3 Page ID #:1254 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH WESTPORT’S NOTICE OF MOTION AND MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION DAVID VELASCO, et al, individually and on behalf of all similarly-situated consumers, Plaintiffs, vs. PACCAR INC., dba KENWORTH TRUCK COMPANY, INLAND KENWORTH (US) Inc., and WESTPORT FUEL SYSTEMS INC., Defendants. CASE NO. 2:13-cv-09407-R-AS Hon. Manuel L. Real DEFENDANT WESTPORT FUEL SYSTEMS (US) INC. F/K/A WESTPORT FUEL SYSTEM INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ THIRD AMENDED CLASS ACTION COMPLAINT Date: August 15, 2016 Time: 10:00 a.m. Judge: Hon. Manuel L. Real Dept: 8 - 2nd Floor Complaint Filed: December 20, 2013 JASON ANDERSON, State Bar No. 172087 janderson@sycr.com CRAIG A. TAGGART, State Bar No. 239168 ctaggart@sycr.com BRADLEY E. MARRETT, State Bar No. 288079 bmarrett@sycr.com STRADLING YOCCA CARLSON & RAUTH, P.C. 660 Newport Center Drive, Suite 1600 Newport Beach, CA 92660-6422 Telephone: (949) 725-4000 Facsimile: (949) 725-4100 Attorneys for Defendant WESTPORT FUEL SYSTEMS (US) INC. f/k/a WESTPORT FUEL SYSTEMS INC. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 1 of 34 Page ID #:1255 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -i- WESTPORT’S MOTION TO DISMISS THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 TABLE OF CONTENTS I. INTRODUCTION ........................................................................................... 1 II. SUMMARY OF ALLEGATIONS .................................................................. 3 III. LEGAL ARGUMENT .................................................................................... 3 A. Plaintiffs fail to plead facts to state their First Claim for breach of express warranty against Westport. ......................................................... 4 1. Plaintiffs fail to plead facts establishing that they have any warranty rights with Westport. ..................................................... 5 2. Plaintiffs fail to plead vertical privity with Westport. .................... 8 3. Plaintiffs fail to plead reasonable reliance on the terms of any applicable Westport warranty. .............................................. 11 4. Plaintiffs’ express warranty claim must be dismissed since it is based on an alleged design defect that is not covered by the alleged “materials and workmanship” warranties. ................. 11 5. Plaintiffs fail to plead that Westport breached any purported warranty rights by denying any legitimate warranty claims. ......................................................................... 12 B. Plaintiffs’ Second and Third Claims for breach of the implied warranties of merchantability and fitness for a particular purpose must be dismissed. ............................................................................... 13 1. Plaintiffs still fail to differentiate between the various Defendants. ............................................................................... 13 2. Plaintiffs still fail to plead privity. ............................................... 14 3. Plaintiffs still fail to plead a particular purpose for which their trucks were required. .......................................................... 14 4. Plaintiffs’ new allegations confirm that dismissal is required. ..... 16 a. Plaintiffs’ claims are barred by the disclaimers of implied warranties in the express warranty. ...................... 16 b. Most of Plaintiffs’ claims are time-barred. ....................... 18 C. Plaintiffs fail to plead a claim under the UCL. ...................................... 19 1. The UCL claim must be dismissed because Plaintiffs do not allege an injury that can be redressed by this Court. ............. 19 2. Plaintiffs lack standing to bring claims under the UCL because they are neither consumers nor competitors. ................ 20 Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 2 of 34 Page ID #:1256 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -ii- WESTPORT’S MOTION TO DISMISS THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 3. Plaintiffs lack standing to bring claims under the UCL because they are uninjured assignees. ......................................... 21 4. Most of Plaintiffs’ UCL claims are time-barred. ......................... 21 5. Plaintiffs’ Unlawful Prong UCL claim must be dismissed as to Westport because Plaintiffs fail to allege any unlawful conduct by Westport. ................................................................. 22 6. Plaintiffs’ Unfair Prong UCL claim must be dismissed because Plaintiffs are not consumer or competitors. .................. 23 IV. CONCLUSION ............................................................................................. 25 Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 3 of 34 Page ID #:1257 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -i- WESTPORT’S MOTION TO DISMISS THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 TABLE OF AUTHORITIES Page(s) CASES Adams v. I-Flow Corp., 2010 U.S. Dist. LEXIS 33066 (C.D. Cal. Mar. 30, 2010) .................................................................................... 4, 7, 22 Almasi v. Equilon Enters., LLC, 2012 U.S. Dist. LEXIS 128623 (N.D. Cal. Sept. 10, 2012) ........................................................................................... 23 Am. Suzuki Motor Corp. v. Superior Court, 37 Cal. App. 4th 1291 (1995) ...................................................................................... 16 Amalgamated Transit Union, Local 1756, AFL-CIO v. Super. Ct., 46 Cal. 4th 993 (Cal. 2009) .......................................................................................... 21 Apodaca v. Whirlpool Corp., 2013 U.S. Dist. LEXIS 176363 (C.D. Cal. Nov. 8, 2013) .............................................................................................. 12 Baltazar v. Apple, Inc., 2011 U.S. Dist. LEXIS 13187 (N.D. Cal. Feb. 10, 2011)..................................................................................... 4, 7, 24 Cansino v. Bank of America, 224 Cal. App. 4th 1462, 2014 Cal. App. LEXIS 277 (2014) .......................................................................... 21, 8 Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008) ........................................................................... 8, 12, 14 Copart, Inc. v. Sparta Consulting, Inc., 2015 U.S. Dist. LEXIS 74662 (E.D. Cal. June 9, 2015) ............................................................................................... 23 Corazon v. Aurora Loan Services, LLC, 2011 U.S. Dist. LEXIS 52712 (N.D. Cal. May 5, 2011) .............................................................................................. 14 Ctr. for Neuro Skills v. Blue Cross of Cal., 2013 U.S. Dist. LEXIS 148432 (E.D. Cal. Oct. 15, 2013) ............................................................................................. 23 Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 4 of 34 Page ID #:1258 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -ii- WESTPORT’S MOTION TO DISMISS THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 Digby Adler Grp., LLC v. Mercedes-Benz U.S.A., LLC, 2015 U.S. Dist. LEXIS 116427 (N.D. Cal. Sept. 1, 2015) ............................................................................................. 13 Dillon v. NBCUniversal Media LLC, No. CV 12-09728 SJO, 2013 U.S. Dist. LEXIS 100733 (C.D. Cal. June 18, 2013) ............................................................................................ 20 Dollar Tree Stores Inc. v. Toyama Partners LLC, 875 F. Supp. 2d 1058 (N.D. Cal. 2012) ....................................................................... 20 Elias v. Hewlett-Packard Co., 950 F. Supp. 2d 1123 (N.D. Cal. 2013) ....................................................................... 22 Fieldstone Co. v. Briggs Plumbing Prods., Inc., 54 Cal. App. 4th 357 (1997) ...................................................................................... 5, 8 Fresno Motors, LLC v. Mercedes-Benz USA, LLC, 852 F. Supp. 2d 1280 (E.D. Cal. 2012) ................................................................. 19, 20 Garcia v. M-F Ath. Co., 2012 U.S. Dist. LEXIS 20411 (E.D. Cal. Feb. 6, 2012) ................................................................................................. 8 Gertz v. Toyota Motor Corp., 2011 U.S. Dist. LEXIS 94183 (C.D. Cal. Aug. 22, 2011) ........................................................................................ 4, 11 Hibu Inc. v. Lawrence, 2013 U.S. Dist. LEXIS 173324 (C.D. Cal. Nov. 25, 2013) ............................................................................................ 24 Hodges v. Apple, Inc., 2013 U.S. Dist. LEXIS 179143 (N.D. Cal. Aug. 12, 2013) .............................................................................................. 4 Huntzinger v. Aqua Lung Am., Inc., 15-CV-1146 WQH (KSC), 2015 U.S. Dist. LEXIS 167140 (S.D. Cal. Dec. 10, 2015) ......................................................................................... 9, 10 In re Toyata Motor Corp. Hybrid Brake Mktg., Sales, Practices & Prods. Liab. Litig., 890 F. Supp. 2d 1210 (C.D. Cal. 2011) ....................................................................... 11 In re Toyota Motor Corp., 754 F. Supp. 2d 1145 (C.D. Cal. 2010) ....................................................................... 12 Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 5 of 34 Page ID #:1259 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -iii- WESTPORT’S MOTION TO DISMISS THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 In re WellPoint, Inc. Out-Of-Network “UCR” Rates Litig., 903 F. Supp. 2d 880 (C.D. Cal. 2012) ......................................................................... 21 J.B. Painting & Waterproofing, Inc. v. RGB Holdings, LLC, 2016 U.S. App. LEXIS 9427 (May 23, 2016) ....................................................... 18, 19 Janda v. T-Mobile USA, Inc., 378 F. App’x 705 (9th Cir. 2010) .................................................................................. 7 Jent v. Northern Trust Corp., 2013 U.S. Dist. LEXIS 154554 (E.D. Cal. Oct. 28, 2013) ............................................................................................. 24 Jones v. ConocoPhillips Co., 198 Cal. App. 4th 1187 (2011) ...................................................................................... 9 Kent v. Hewlett-Packard Co., 2010 U.S. Dist. LEXIS 76818 (N.D. Cal. July 6, 2010) ............................................................................................... 12 Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962 (C.D. Cal. 2014) ......................................................................... 12 Linear Tech. Corp. v. Applied Materials, Inc., 152 Cal. App. 4th 115 (2007) ...................................................................................... 20 McKinney v. Google, Inc., 2011 U.S. Dist. LEXIS 97958 (N.D. Cal. Aug. 30, 2011) ............................................................................................ 11 Moncada v. Allstate Ins. Co., 471 F. Supp. 2d 987 (N.D. Cal. 2006) ......................................................................... 11 MVP Asset Mgmt. (USA) LLC v. Vestbirk, 2012 U.S. Dist. LEXIS 1889 (E.D. Cal. Jan. 6, 2012) .................................................................................................. 6 Osborne v. Subaru of Am., Inc., 198 Cal. App. 3d 646 (1988) ......................................................................................... 8 Palmer v. Stassinos, 348 F. Supp. 2d 1070 (N.D. Cal. 2004) ................................................................. 19, 20 Peterson v. Lamb Rubber Co., 54 Cal. 2d 339 (1960) .................................................................................................... 8 Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 6 of 34 Page ID #:1260 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -iv- WESTPORT’S MOTION TO DISMISS THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 Philippine Nat’l Oil Co. v. Garrett Corp., 724 F.2d 803 (9th Cir. 1984) ....................................................................................... 18 Punian v. Gillette Co., 2016 U.S. Dist. LEXIS 34164 (N.D. Cal. Mar. 15, 2016) ...................................................................................... 24, 25 Reed v. Dynamic Pet Prods., 2015 U.S. Dist. LEXIS 100540 (S.D. Cal. Jul. 30, 2015)................................................................................................. 8 Rice v. Sunbeam Prods., 2013 U.S. Dist. LEXIS 7467 (C.D. Cal. Jan. 7, 2013) ................................................................................... 12, 22, 24 Roofing, Inc. v. Credit Alliance Corp., 228 Cal. App. 3d 1431 (1991) ..................................................................................... 14 Shroyer v. New Cingular Wireless Servs., 606 F.3d 658 (9th Cir. 2010) ....................................................................................... 22 Spearmint Rhino Cos. Worldwide v. Chiappa Firearms, Ltd., 2012 U.S. Dist. LEXIS 189112 (C.D. Cal. Jan. 20, 2012) ........................................................................................... 3, 4 Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001) ....................................................................................... 10 Sumer v. Carrier Corp., 2015 U.S. Dist. LEXIS 20731 (N.D. Cal. Feb. 20, 2015)....................................................................................... 17, 18 Taliaferro v. Samsung Telcoms. Am., LLC, 11-CV-1119-D, 2012 U.S. Dist. LEXIS 6221 (N.D. Tex. Jan. 19, 2012)............................................................................................... 6 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) ................................................................................. 4, 24 Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012) ..................................................................................... 24 STATUTES California Commercial Code § 2313 ............................................................................. 5, 22 California Commercial Code § 2725 ........................................................................... 18, 19 Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 7 of 34 Page ID #:1261 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -v- WESTPORT’S MOTION TO DISMISS THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 RULES Federal Rule of Civil Procedure 8 ....................................................................................... 4 Federal Rule of Civil Procedure 9 ................................................................................. 4, 24 Federal Rule of Civil Procedure 12 ................................................................................... 25 Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 8 of 34 Page ID #:1262 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -1- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION This Court previously dismissed Plaintiffs’ third attempt to plead their claims in this case. The Ninth Circuit affirmed this Court’s “dismissal of the SAC because the claims were deficiently pled in a number of respects,” however, it remanded to allow Plaintiffs a fourth attempt to plead their claims. Despite having more than two years to perfect their complaint, Plaintiffs’ Third Amended Class Action Complaint (“TAC”) remains deficient and fails to cure the defects from the dismissed SAC. Westport Fuel Systems (US) Inc. f/k/a Westport Fuel Systems Inc. (“Westport”) respectfully requests that the Court dismiss Plaintiffs’ TAC in its entirety with prejudice. Plaintiffs consist of 61 truck drivers who leased their trucks for business use from one of two trucking companies: “Southern Counties Express or California Cartage Express.” Although Plaintiffs tried to conceal their lack of privity in the SAC, Plaintiffs now admit that they never purchased or leased any trucks directly from any of the Defendants, let alone Westport. In fact, while Plaintiffs add new allegations and exhibits to their complaint, those allegations and exhibits, rather than cure the defects in the SAC, actually highlight additional defects in Plaintiffs’ claims and confirm that Plaintiffs cannot plead any claim against Westport. First, just like in the SAC, Plaintiffs do not plead the terms of any warranty rights they have with Westport, much less any warranty provision that provides coverage for an allegedly defective design. The two purported warranties Plaintiffs do attach establish prima facie that the warranty rights they are asserting belong to other non-parties - not Plaintiffs. Recognizing this fact, Plaintiffs make the conclusory allegation that they were “assigned” the warranty rights of the trucking companies for which they work. However, Plaintiffs plead no facts to support the legal conclusion they were assigned the warranties. In addition, Plaintiffs’ express warranty claims must be dismissed because the alleged Westport warranties cover only “materials and workmanship”; they do not Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 9 of 34 Page ID #:1263 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -2- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 cover the design defect alleged in the TAC. Furthermore, even if the warranties did provide coverage, Plaintiffs fail to plead facts sufficient to establish that Westport actually denied warranty coverage for any warrantable claim. Second, just like in the SAC, Plaintiffs’ implied warranty claims in the TAC must be dismissed. As with the express warranty claim, Plaintiffs fail to plead privity with Westport, or sufficient facts to invoke an exception to the privity requirement. For the implied warranty of fitness, Plaintiffs also fail to cure the defect this Court found in the prior complaint that “Plaintiffs have not alleged any particular purpose for which the trucks were required.” Plaintiffs further fail to plead any facts establishing that Plaintiffs relied on Westport’s skill and judgment, or even that Plaintiffs had any interaction with Westport before leasing their trucks from their trucking companies. Independent of those reasons, Plaintiffs’ implied warranty claims are also barred by the enforceable implied warranty disclaimers in the alleged express warranties attached to the TAC. Finally, the implied warranty claims must be dismiss for most of the Plaintiffs because their claims are barred by the statute of limitations. Third, just like in the SAC, Plaintiffs’ UCL claims must be dismissed. As a threshold matter, Plaintiffs lack standing to bring claims under the UCL because they do not allege an injury that can be redressed by the Court, they are neither consumers nor competitors of Westport, and because Plaintiffs are, at most, uninjured assignees of the claims of the actual purchasers. Even if Plaintiffs had standing, the claims still must be dismissed because Plaintiffs fail to plead facts sufficient to establish their UCL claims. As to Plaintiffs’ unlawful prong claim, it fails because it is based solely on Plaintiffs’ insufficient warranty claims. As to Plaintiffs’ unfair prong claim, it fails because Plaintiffs are neither a consumer nor competitor. Further, Plaintiffs fail to plead with particularity any facts that would constitute unfair conduct. Finally, Plaintiffs’ UCL claims are barred for most Plaintiffs by the statute of limitations. In sum, Plaintiffs’ TAC remains defective. Just as this Court was correct to dismiss Plaintiffs’ claims the third time around, the Plaintiffs’ TAC should be Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 10 of 34 Page ID #:1264 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -3- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 dismissed again, with prejudice. II. SUMMARY OF ALLEGATIONS In the 134-paragraph, 83 page TAC, Plaintiffs describe themselves as “truck drivers who operate out of California’s busy ports,” and who purchased or leased Kenworth T-800 liquefied natural gas (“LNG”) powered trucks (the “trucks”). TAC ¶ 1. Plaintiffs claim that they would not have purchased or leased these trucks from their “employers” Southern Counties Express (“Southern Counties”) and California Cartage Express (“Cal Cartage”) - neither of which are parties to this case - had they known that the trucks were not as “reliable” as their older, diesel powered trucks. TAC ¶ 2. Plaintiffs allege that as a result of the “poor design” of the trucks, Plaintiffs had to bring their trucks in for repairs more frequently than they had anticipated. E.g., TAC ¶ 130. Plaintiffs further allege that when they brought their trucks in for repair, Westport’s authorized service providers either made or attempted to make the requested repairs. See TAC ¶ 6. Nonetheless, Plaintiffs allege that the repairs resulted in down time, lost wages, and other consequential damages to Plaintiffs. TAC ¶ 10. Noticeably absent from the TAC are any allegations specific to representations made by Westport. While in some places Plaintiffs lump together the various Defendants, alleging that “Defendants induced Plaintiffs” to purchase their trucks, e.g., TAC ¶ 2, Plaintiffs do not identify any statement made by Westport upon which they relied, see TAC passim. The only statement specifically mentioned in the TAC is a statement by “Defendant Kenworth” in Exhibit A. TAC ¶ 1. Also absent from the TAC are the lease agreements and purchase agreements through which Plaintiffs allegedly obtained warranty rights. Also, not a single agreement between Westport and any one of the Plaintiffs is pleaded or attached to the TAC. The many other deficiencies in the TAC are discussed below. III. LEGAL ARGUMENT “To survive a motion to dismiss, a complaint must contain sufficient factual matter to state a claim for relief that is plausible on its face.” Spearmint Rhino Cos. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 11 of 34 Page ID #:1265 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -4- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 Worldwide v. Chiappa Firearms, Ltd., 2012 U.S. Dist. LEXIS 189112, at *1-2 (C.D. Cal. Jan. 20, 2012) (Real, J.) (citing Ashcroft v. Iqbal, 556 U.S. 662 (2009)). “[A] complaint which alleges only labels and conclusions or a formulaic recitation of elements of the cause of action will not survive dismissal.” Id. at *2 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). And “[a]ssertions that are mere ‘legal conclusions,’ . . . are not entitled to the assumption of truth.” Adams v. I-Flow Corp., 2010 U.S. Dist. LEXIS 33066, at *5-6 (C.D. Cal. Mar. 30, 2010) (Real, J.) (citation omitted). Plaintiffs’ claims concerning alleged misrepresentations also must be pleaded with particularity because they “sound in fraud.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103-04 (9th Cir. 2003) (Even where “fraud is not a necessary element of a claim, a plaintiff may choose nonetheless to allege in the complaint that the defendant has engaged in fraudulent conduct. . . . In that event, the claim is said to be ‘grounded in fraud’ or to ‘sound in fraud,’ and . . . must satisfy . . . Rule 9(b)”).1 As detailed below, Plaintiffs fail to satisfy Fed. R. Civ. P. 8, 9(b), and 12(b)(6). A. Plaintiffs fail to plead facts to state their First Claim for breach of express warranty against Westport. To state a claim for breach of express warranty “a plaintiff must allege: (1) the exact terms of the warranty; (2) reasonable reliance thereon; and (3) a breach of warranty which proximately caused plaintiff’s injury.” Baltazar v. Apple, Inc., 2011 U.S. Dist. LEXIS 13187, at *5 (N.D. Cal. Feb. 10, 2011) (citing Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135, 142 (1986)). Plaintiffs must also plead that they brought their trucks in for repair, and Westport refused or failed to honor the warranty. See Gertz v. Toyota Motor Corp., 2011 U.S. Dist. LEXIS 94183, *7 (C.D. Cal. Aug. 22, 2011) (An “express warranty is not breached unless and until the [manufacturer] refuses or 1 While Plaintiffs have abandoned their fraud-prong UCL claim, this sleight-of-hand does not eliminate the requirement that Plaintiffs’ unfair prong claim must still be pleaded with particularity because it is based upon allegedly fraudulent conduct. See, e.g., Hodges v. Apple, Inc., 2013 U.S. Dist. LEXIS 179143, *9-10 (N.D. Cal. Aug. 12, 2013) (UCL claims grounded in fraud must be pled in compliance with FRCP 9(b)). Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 12 of 34 Page ID #:1266 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -5- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 fails to repair.”). Further, “privity of contract is a required element of an express breach of warranty claim.” Fieldstone Co. v. Briggs Plumbing Prods., Inc., 54 Cal. App. 4th 357, 369 n.10 (1997).2 1. Plaintiffs fail to plead facts establishing that they have any warranty rights with Westport. Similar to Plaintiffs’ previous Complaint, Plaintiffs’ TAC fails to set forth facts establishing the terms of any express warranty rights Plaintiffs have with Westport. Plaintiffs group themselves into two categories: (1) alleged drivers for Southern Counties, and (2) alleged drivers for Cal Cartage. Plaintiffs fail to plead warranty rights for either group. First, for the Southern Counties drivers, Plaintiffs allege that they received “the warranty materials” attached as “Exhibit D” to the TAC, but Plaintiffs do not allege when they received those materials, or who they received them from. TAC ¶ 23. The warranty that Plaintiffs attach as “Exhibit D” is in the name of “Southern Counties” - not any of the Plaintiffs. Plaintiffs do not attach any warranty document executed by both Westport and any of the Plaintiffs, or any warranty certificate that any of the Plaintiffs hold. Thus, Plaintiffs have no warranty rights under the purported warranty agreement attached as “Exhibit D.” Acknowledging that they are not a party to the express warranty with Westport, Plaintiffs make the conclusory assertion that the Southern Counties drivers were “assigned Southern Counties’ warranty rights.” TAC ¶ 24. However, Plaintiffs do not 2 Plaintiffs only plead a breach of written warranty claim. See TAC ¶¶97-104. Plaintiffs do not plead (or attempt to plead) a statutory express warranty claim based on California Commercial Code § 2313. Notably, Plaintiffs cannot establish any warranty arising under Section 2313 because Plaintiffs do not plead a single statement made by Westport that they claim to have relied upon in purchasing or leasing their trucks. Further, the purported warranties attached to the TAC, specifically limit the terms of the warranties to those contained in the written agreements and disclaim any warranty based on any purported representations. See TAC, Ex. D at 49, Ex. E at 72. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 13 of 34 Page ID #:1267 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -6- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 plead any facts to support this conclusion. Plaintiffs do not allege whether the purported assignment was written or oral, and if it was written, Plaintiffs do not plead any facts relating to that document. Plaintiffs also do not even allege when the assignments were made. See MVP Asset Mgmt. (USA) LLC v. Vestbirk, 2012 U.S. Dist. LEXIS 1889, *11 (E.D. Cal. Jan. 6, 2012) (“bare allegation” of assignment insufficient).To the extent Plaintiffs attempt to plead any facts, they do so only for David Velasco, not any of the 60 other Plaintiffs. But, even for David Velasco, the sole support for the assignment is a one page cut-out (page 3 of 12) from an unidentified, incomplete document, which does not even appear to be executed, identify David Velasco as a party, or identify the truck(s) it governs. See TAC, Ex. F. More importantly, even if Southern Counties had attempted to assign warranty rights, Plaintiffs fail to plead that they complied with the terms of the warranty relating to the assignment. The purported warranty attached as Exhibit D in the name of Southern Counties may only be transferred “upon the sale of a HPDI Vehicle during the Extended Coverage Period.” TAC, Ex. D ¶ 3.1 (emphasis added). David Velasco (and the other Southern Counties Plaintiffs) do not allege that the trucks were sold to them. Further, not only is a transfer only valid upon a sale, but Westport must be “provided with written notification by the Customer within 30 days of the transfer of ownership.” TAC, Ex. D. Plaintiffs do not allege that Westport was ever provided with this written notification. Moreover, the warranty that Plaintiffs attach also specifically states: “Coverage under this Extended Warranty will be effective only to the extent evidenced by a Customer’s Warranty Certificate issued by Westport that sets out the scope of coverage and the Extended Coverage Period.” TAC, Ex. D ¶ 3.2. Plaintiffs do not allege that any of them have warranty certificates, and they do not plead the terms of any warranty certificates. See Taliaferro v. Samsung Telcoms. Am., LLC, 11-CV-1119-D, 2012 U.S. Dist. LEXIS 6221, *6 (N.D. Tex. Jan. 19, 2012) (Under California law, “a plaintiff cannot state a claim for breach of express warranty unless he meets the conditions precedent prescribed by the express warranty.”). Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 14 of 34 Page ID #:1268 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -7- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 Second, Plaintiffs fail to plead the terms of any express warranty, much less an assignment of that warranty, for the alleged Cal Cartage drivers. See Baltazar, 2011 U.S. Dist. LEXIS 13187, at *5 (to plead a breach of express warranty, plaintiffs must allege the “exact terms” of the warranty). As in the SAC, Plaintiffs do not plead the terms of any purported warranty between Westport and Plaintiffs; instead, Plaintiffs assert that the applicable warranty terms are set forth in Exhibit E to the TAC. However, the document attached as Exhibit E is not an actual warranty agreement. Indeed, the Kenworth document states that the following pages are a “Quick Reference Guide Only,” and that the direct purchaser should to look at the actual warranty agreement for the complete terms. TAC, Ex. E at 69.3 Notably, the included Westport document merely states that it is a “Warranty Matrix,” and it does not purport to contain all of the terms of any applicable Westport warranty. Id. at 71. Also notable is the fact that none of the Cal Cartage drivers are named as parties in any of the purported warranty documents. The only mention of any driver’s name is on the first page of one of the documents, which appears to be a summary created by Cal Cartage and is not even signed by Westport or Kenworth. Additionally, to the extent the Cal Cartage drivers contend that Exhibit E is the complete warranty document, most, if not all, of the Plaintiffs’ claims are barred by the terms of the warranty. Specifically, Exhibit E states that the statute of limitations is shortened to “one year from the accrual of the cause of action . . . .” TAC, Ex. E at 67. Plaintiffs each allege they began leasing their trucks in 2009, 2010, 2011, or the first half of 2012. See TAC passim. Under California law, provisions shortening the statute of limitations are valid. See Janda v. T-Mobile USA, Inc., 378 F. App’x 705, 709 (9th Cir. 2010) (affirming dismissal of contract claim where contract shortened the statute of limitations to one year). Notably, Plaintiffs fail to plead facts sufficient to invoke the discovery rule. See, e.g., Adams, 2010 U.S. Dist. LEXIS 33066, at *10 3 All references to page numbers are to the ECF numbers in Document 49-1. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 15 of 34 Page ID #:1269 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -8- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 (complaint with one-hundred forty-one plaintiffs failed to plead discovery rule where it failed “to state when and how each plaintiff discovered his or her alleged injuries were caused by defendants’ products.”); Cansino, 2014 Cal. App. LEXIS 277, at *25 (dismissing claims where plaintiffs failed to “plead facts to invoke the discovery rule”). 2. Plaintiffs fail to plead vertical privity with Westport. Plaintiffs’ breach of express warranty claim also fails as a matter of law because Plaintiffs lack vertical privity with Westport. “[P]rivity of contract is a required element of an express breach of warranty claim.” Fieldstone Co. v. Briggs Plumbing Prods., Inc., 54 Cal. App. 4th 357, 369 n.10 (1997). “The term ‘vertical privity’ means that the plaintiff and defendant ‘occupy adjoining links in the distribution chain.’” Garcia v. M- F Ath. Co., 2012 U.S. Dist. LEXIS 20411, *6 (E.D. Cal. Feb. 6, 2012) (citation omitted); see also Osborne v. Subaru of Am., Inc., 198 Cal. App. 3d 646, 656 n.6 (1988). Here, Plaintiffs admit that they do not have direct contractual privity with Westport. See TAC ¶ 15 (“Plaintiffs [] leas[e] the[] LNG trucks through their employers, Southern Counties Express or California Cartage Express.”). Thus, Plaintiffs attempt to allege that they fall into one of two exceptions to the privity requirement. However, neither exception applies in this case. First, Plaintiffs allege that because they are “employees” of Southern Counties and Cal Cartage they are not subject to the normal privity requirements.4 TAC ¶ 24. Plaintiffs are wrong. The dicta in Clemens relied upon by Plaintiffs, see TAC ¶ 24 (citing Clemens 534 F.3d at 1023) traces its lineage to Peterson v. Lamb Rubber Co., 54 Cal. 2d 339 (1960). In Peterson, the court created an exception to the privity requirement for personal injury actions involving a defective product. 54 Cal. 2d at 340-48. Following Peterson, courts have consistently limited Peterson’s exception to claims involving injuries to employees. E.g., Reed v. Dynamic Pet Prods., 2015 U.S. Dist. LEXIS 100540, *28 (S.D. Cal. Jul. 30, 2015) (rejecting broad exception to privity requirement and 4 Notably, Plaintiffs previously argued that they are actually independent contractors. See ECF No. 25 at 4. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 16 of 34 Page ID #:1270 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -9- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 citing Windham at Carmel Mountain Ranch Assn. v. Sup. Ct., 109 Cal. App. 4th 1162, 1169 (“[A]n expansion of the privity concept has been established for certain employees who are injured while using dangerous products purchased by their employers.”) (emphasis added)). cf. also Jones v. ConocoPhillips Co., 198 Cal. App. 4th 1187, 1201 (2011) (exception could be viewed as part of the “tort doctrine of strict liability.”). In this case, Plaintiffs’ claims are not based on personal injury or strict products liability; rather, Plaintiffs’ claims are based on alleged economic injuries in connection with the lease of their trucks. Thus, the personal-injury-to-employee’s exception to the privity requirement is inapplicable. Second, Plaintiffs allege that they are third-party beneficiaries of “the transaction.” As a threshold matter, however, Plaintiffs fail to adequately plead this exception because Plaintiffs fail to identify the “transaction” to which they believe they are third party beneficiaries. This alone is fatal to Plaintiffs’ third-party beneficiary contention. See Huntzinger v. Aqua Lung Am., Inc., 15-CV-1146 WQH (KSC), 2015 U.S. Dist. LEXIS 167140, *28 (S.D. Cal. Dec. 10, 2015). In Aqua Lung, the plaintiff argued that it was a third party beneficiary to a contract between the manufacturer and an online retailer and, thus, not required to plead vertical privity. Id. The court disagreed and dismissed the claim because the complaint contained only “the conclusory allegations that ‘Plaintiff and class members were the intended beneficiaries and users of the [products] and that “Defendant . . . warranted the [products] to them directly and/or through the doctrine of agency.’” Id. The court found “[t]hese conclusory allegations are not supported by facts sufficient to infer a contractual relationship between leisurepro.com and Aqua Lung.” Id. Similarly here, Plaintiffs fail to identify the “transaction” to which they claim to be third party beneficiaries. To the extent Plaintiffs are relying on Exhibit G, see TAC ¶ 99 n.14, that exhibit confirms that dismissal is required. Exhibit G is not a contract but a news article. Further, to the extent any transactions are noted in the article, none involve Westport. For example, Exhibit G references an exclusivity agreement Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 17 of 34 Page ID #:1271 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -10- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 between Westport Innovations Inc. and Kenworth. But Westport Innovations Inc. is not the defendant in this case, Westport Fuel Systems (US) Inc. is the only Westport entity named. Thus, even if Plaintiffs are the third-party beneficiaries to that transaction, they are not third-party beneficiaries vis-à-vis Westport Fuel Systems (US) Inc., the defendant sued. Consequently, the third-party beneficiary exception is inapplicable. In addition, even if Plaintiffs properly identified a transaction to which they are purportedly third-party beneficiaries (they did not), and even if Westport Fuel Systems (US) Inc. was a party to that transaction (it is not alleged to be), the TAC would still fail to plead the third-party beneficiary exception to the privity requirement because “[d]etermining whether a third party is an intended beneficiary of a contract ‘involves construction of the intention of the parties, gathered from reading the contract as a whole in light of the circumstances under which it was entered,’” and, here, Plaintiffs have not pleaded any facts to support their conclusion that they were the intended beneficiaries of that transaction. Aqua Lung, 2015 U.S. Dist. LEXIS 167140 at *26. Plaintiffs allege only that they “work (or worked) for either Southern Counties Express or California Cartage Express,” TAC ¶ 15 n.3, and that they “leas[ed] the[] LNG trucks through their employers, Southern Counties Express or California Cartage Express,” TAC ¶ 15. Naturally, if Plaintiffs worked for and leased their trucks from Southern Counties or Cal Cartage, then (assuming there was some transaction that intended some third party to be a beneficiary) those entities would be the intended beneficiaries of any transaction not the Plaintiff-employees. To the extent Plaintiffs ask the Court to infer otherwise, that inference is unreasonable and unwarranted and the Court need not accept it. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988-89 (9th Cir. 2001), amended on other grounds by 275 F.3d 1187 (2001) (The court is not required to “accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.”). Indeed, such an inference would be contradictory to other exhibits attached to the TAC, which identify the beneficiary of the Westport warranty as Southern Counties and Cal Cartage, not Plaintiffs. See TAC Ex. D. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 18 of 34 Page ID #:1272 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -11- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 Notably, the cases cited by Plaintiffs in the TAC on this point are distinguishable. For instance, in In re Toyata Motor Corp. Hybrid Brake Mktg., Sales, Practices & Prods. Liab. Litig., 890 F. Supp. 2d 1210, 1222 (C.D. Cal. 2011), the court concluded that the plaintiffs were “arguably the intended beneficiaries of any implied warranty of merchantability between Toyota and its auto dealers because Toyota intends for the dealers to sell its cars to consumers.” Here, in contrast, Plaintiffs allege that they leased their trucks from Southern Counties or Cal Cartage. Unlike to Toyota dealers in Toyota, neither Southern Counties nor Cal Cartage is a Westport dealer. 3. Plaintiffs fail to plead reasonable reliance on the terms of any applicable Westport warranty. Even if Plaintiffs established privity and could plead the terms of an applicable warranty, Plaintiffs plead no facts establishing that they reasonably relied on the warranty as forming the basis of their bargain to lease the trucks. See, e.g., McKinney v. Google, Inc., 2011 U.S. Dist. LEXIS 97958, *12 (N.D. Cal. Aug. 30, 2011) (dismissing breach of express warranty claim for failing to plead reasonable reliance); Moncada v. Allstate Ins. Co., 471 F. Supp. 2d 987, 997 (N.D. Cal. 2006) (same). Plaintiffs’ TAC sets forth no facts establishing that Plaintiffs saw any of the warranties, let alone that they reasonably relied on them at the time they made their leases or purchases. Nor could Plaintiffs plead such facts, since Plaintiffs are not in privity with Westport and none of the Plaintiffs leased or purchased their vehicles directly from Westport. 4. Plaintiffs’ express warranty claim must be dismissed since it is based on an alleged design defect that is not covered by the alleged “materials and workmanship” warranties. Plaintiffs assert that the repairs to their trucks “never lasted” due to “the poor design of the vehicles” TAC ¶ 130, and thus Plaintiffs conclude the trucks were defective. See, e.g., TAC ¶¶ 7-10, Ex. C p. 25, 29, 37 (referencing alleged “design defects”). But these allegations cannot form the basis of a breach of express warranty claim against Westport. Westport’s warranties are limited to “defects in materials or Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 19 of 34 Page ID #:1273 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -12- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 factory workmanship.” TAC, Ex. D at 46 (¶ 2.1), 71. Under California law “design defects fall outside the scope of a warranty covering ‘defects in material and/or workmanship.’” Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962, 978-979 (C.D. Cal. 2014); In re Toyota Motor Corp., 754 F. Supp. 2d 1145, 1180 (C.D. Cal. 2010) (granting motion to dismiss to extent plaintiffs based express written warranty claims on an alleged design defect); Rice v. Sunbeam Prods., 2013 U.S. Dist. LEXIS 7467, *35 (C.D. Cal. Jan. 7, 2013) (same). Thus, Plaintiffs’ claim should be dismissed. 5. Plaintiffs fail to plead that Westport breached any purported warranty rights by denying any legitimate warranty claims. Even assuming, arguendo, that Plaintiffs have warranty coverage, they fail to plead facts establishing that Westport actually breached any warranty rights. A manufacturer is “not liable for breach of express warranty merely because a product manifests recurring failures during the warranty period. Rather, the question is whether [a plaintiff] sought repairs, refunds, or replacements and, if so, whether [the manufacturer] responded appropriately under the warranty.” Kent v. Hewlett-Packard Co., 2010 U.S. Dist. LEXIS 76818, at *15-16 (N.D. Cal. July 6, 2010); Apodaca v. Whirlpool Corp., 2013 U.S. Dist. LEXIS 176363, *26 (C.D. Cal. Nov. 8, 2013) (dismissing complaint that “insufficiently ple[d] that Defendant did not respond appropriately to . . . requests for repairs, refunds, or replacements pursuant to the express warranty.”). Further, “[t]he general rule is that an express warranty does not cover repairs made after the applicable time or mileage periods have elapsed.” Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir. 2008). Here, Plaintiffs fail to allege that they actually presented warrantable claims to Westport during the applicable warranty periods, and that Westport denied those claims or refused to fix them. Rather, Plaintiffs make vague allegations regarding purported design defects, without ever providing any specific allegation regarding (1) what specific problem any plaintiff experienced, (2) when the problem was experienced (and whether it was within the warranty period), (3) what provisions of Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 20 of 34 Page ID #:1274 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -13- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 the warranty cover the problem, and (4) that Westport denied warranty coverage. Plaintiffs’ instead allege a scattershot of purported defects coupled with conclusory statements that the defects could not be fixed. There are no allegations that Westport improperly denied coverage or refused to repair or replace a part when the repair or replacement should have been covered. See Digby Adler Grp., LLC v. Mercedes-Benz U.S.A., LLC, 2015 U.S. Dist. LEXIS 116427, *13 (N.D. Cal. Sept. 1, 2015) (defendant complied with warranty where repairs were made each time van was brought in for repairs). Moreover, it is notable that none of the Plaintiffs plead that they brought their trucks in for warrantable repairs within the mileage requirements of the purported warranties. The purported warranties are applicable for the shorter of the term of years stated, or mileage, or, for some parts, the hours of use. See TAC Ex. D at 50. Because Plaintiffs fail to plead that they brought their trucks in for repairs and that Westport denied those warranty claims during the applicable mileage or hours of use limits, Plaintiffs have failed to state a claim for breach of express warranty. Accordingly, Plaintiffs’ breach of express warranty claim fails for a myriad of reasons, and Westport respectfully requests that it be dismissed. B. Plaintiffs’ Second and Third Claims for breach of the implied warranties of merchantability and fitness for a particular purpose must be dismissed. Plaintiffs largely do not plead any new facts regarding their implied warranty claims that would cure the defects identified previously by the Court, and the new facts only confirm that dismissal of Plaintiffs’ implied warranty claims is required. 1. Plaintiffs still fail to differentiate between the various Defendants. This Court dismissed Plaintiffs’ breach of the implied warranty claims in part on the ground that Plaintiffs failed to differentiate between the various “Defendants.” Order at 3, May 21, 2014 ECF No. 38. This same defect is present in Plaintiffs’ TAC. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 21 of 34 Page ID #:1275 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -14- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 Plaintiffs lump all of the Defendants together and allege that “Defendants were in the business of manufacturing and/or selling LNG systems,” that “Defendants breached the implied warranty imposed at the time of the transactions,” and that as a “result of this breach of warranty by Defendants, Plaintiffs and Class Members have suffered damages.” TAC ¶¶ 108-110 (emphasis added). Plaintiffs fail to identify which transaction each “Defendant” engaged in, or whether Westport even had any interaction with Plaintiffs or the actual purchasers at the time of sale. And Plaintiffs fail to identify which Defendant caused which Plaintiff or Class Member the alleged damages. Plaintiffs only allege, as they did in the SAC, that they leased trucks through Cal Cartage or Southern Counties. But neither of these entities are parties in this case. Nor, more importantly, are either of those entities Westport. Thus, Plaintiffs’ TAC fails to cure the defect identified by this Court in the SAC. See Corazon v. Aurora Loan Services, LLC, 2011 U.S. Dist. LEXIS 52712, at *11 (N.D. Cal. May 5, 2011) (“By failing to differentiate among defendants or specify which defendant is the subject of Plaintiff's various allegations, Plaintiff's Complaint violates Rule 8(a)(2) . . .”). 2. Plaintiffs still fail to plead privity. Under California law, privity between the plaintiff and defendant is prerequisite to a claim for breach of an implied warranty. See Order at 3, May 21, 2014 ECF No. 38; Roofing, Inc. v. Credit Alliance Corp., 228 Cal. App. 3d 1431, 1441 (1991) (“Vertical privity is a prerequisite in California for recovery on a theory of breach of the implied warranties of fitness and merchantability.”); Clemens, 534 F.3d at 1023-24. As discussed in Section III.A.2 supra, Plaintiffs fail to plead privity with Westport. 3. Plaintiffs still fail to plead a particular purpose for which their trucks were required. To plead a breach of the implied warranty of fitness for a particular purpose, Plaintiffs must allege that “the seller at the time of contracting ha[d] reason to know (a) any particular purpose for which [the] goods [we]re required, and (b) that the buyer [wa]s relying on the seller’s skill or judgment to select of furnish suitable goods for Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 22 of 34 Page ID #:1276 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -15- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 such purpose.” Order at 4, May 21, 2014 ECF No. 38 (quoting Am. Suzuki Motor Corp. v. Superior Court, 37 Cal. App. 4th 1291, 1295 n.2 (1995). Importantly, “[a] particular purpose differs from the ordinary purpose for which the goods are used in that it envisages a specific use by the buyer which is peculiar to the nature of his business . . . .” Id. In dismissing the SAC, the Court explained: Plaintiffs have not alleged any particular purpose for which the trucks were required. Plaintiffs allege that they work as truck drivers at the ports, therefore it is reasonable to infer that they use the trucks to transport freight. This is the ordinary purpose of trucks and, as a result, this claim is not adequately pled. The Ninth Circuit affirmed this Court’s conclusion. Ninth Cir. Order at 2, ECF 44. The TAC must be dismissed for the same reason. Plaintiffs still have not pled any particular purpose for which they used their trucks that is different from the ordinary purpose of trucks, namely to haul freight. Indeed, the particular purpose alleged in the TAC is the same as the particular purpose alleged in the SAC. In the SAC, Plaintiffs alleged that the particular purpose was the Clean Truck Program. See Opp’n to Mot. to Dismiss, ECF No. 18, at 14 (“Here, as alleged in the SAC . . . these Trucks were purchased as part of the Clean Truck Program . . . .”); id. at 15 (“Plaintiffs have alleged [in the SAC] that these Trucks fail of their particular purpose as drayage vehicles that must meet the new requirements of the Clean Truck Program, which eliminates diesel powered trucks from the ports.”). Plaintiffs make this same allegation in the TAC. See TAC ¶ 113 (“Defendants knew or had reason to know that Plaintiffs intended to use the products for a particular purpose. Defendants knew this because these trucks were ordered specifically for use in the Clean Truck Program.”); id. ¶ 114 (“Defendants were aware that Plaintiffs were port delivery drivers who would be using these vehicles to haul heavy loads to and from the port . . . .”). Because Plaintiffs have again attempted to plead that the ordinary purpose of trucks - hauling freight - constitutes a particular purpose, and “us[ing] the trucks to Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 23 of 34 Page ID #:1277 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -16- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 transport freight [] is the ordinary purpose of trucks,” Order at 3, May 21, 2014 ECF No. 38, the TAC’s Third Claim must be dismissed. Am. Suzuki, 37 Cal. App. 4th at 1295 n.2 (dismissing claim “[b]ecause [plaintiffs] [] failed to identify any legally cognizable ‘particular purpose’ for which they supposedly obtained their vehicles (other than the general purpose of providing transportation) . . . .”). Separately, the TAC fails to state a claim because there are no allegations in the TAC that Westport had any reason to know that Plaintiffs were relying on Westport’s skill or judgment in the selection of their trucks, nor are there allegations that Plaintiffs relied on Westport’s skill or judgment in making their decision to lease the trucks. In fact, not a single Plaintiff alleges that they communicated with anyone at Westport before making their decision to lease the trucks. See TAC passim. Thus, just as the SAC was deficient because it “contain[ed] no specific allegations relating to Plaintiffs relying on Defendants’ skill or judgment in selecting a truck that would be suitable for any special purpose,” the TAC is also deficient. Order at 4, May 21, 2014 ECF No. 38. Accordingly, the Third Claim must be dismissed, with prejudice. 4. Plaintiffs’ new allegations confirm that dismissal is required. a. Plaintiffs’ claims are barred by the disclaimers of implied warranties in the express warranty. Attached to the TAC are several exhibits that Plaintiffs purport are the warranties governing their claims. See TAC, Exs. D, E. Both Exhibit D, the alleged warranty between Westport and Southern Counties (who is not a party to this action), and Exhibit E, the alleged warranty between Westport and Cal Cartage (who also is not a party to this action), conspicuously and prominently contain the following disclaimers: THE PERFORMANCE OF REPAIRS OR REPLACEMENT (AT WESTPORT’S OPTION) IS THE EXCLUSIVE REMEDY OF THE CUSTOMER UNDER THIS EXTENDED WARRANTY . . . AND IS IN LIEU OF ALL OTHER WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 24 of 34 Page ID #:1278 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -17- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 THE IMPLIED WARRANTY OF MERCHANTABILITY, MERCHANTABLE QUALITY, FITNESS FOR PARTICULAR PURPOSE AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM THE COURSE OF DEALING OR USAGE OF TRADE . . . WESTPORT DOES NOT REPRESENT OR WARRANT THAT THE HPDI SYSTEM (OR ANY COMPONENT THEREOF) WILL MEET ANY OR ALL OF THE CUSTOMER’S PARTICULAR REQUIREMENTS. TAC, Ex. D. THESE WARRANTIES MADE BY WESTPORT IN REGARD TO THESE HPDI SYSTEMS AND ISX ENGINES ARE THE SOLE WARRANTIES MADE BY WESTPORT IN LIEU OF ALL OTHER WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY, MERCHANTILE QUALITY, FITNESS FOR PARTICULAR PURPOSE AND INFRINGEMENT, AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM THE COURSE OF DEALING OR USAGE OF TRADE. WESTPORT DOES NOT REPRESENT OR WARRANT THAT THE HPDI SYSTEM OR ISX ENGINE WILL MEET ANY OR ALL OF THE OWNERS PARTICULAR REQUIREMENTS. TAC, Ex. E. Thus, the alleged warranties disclaim all implied warranty claims, and require dismissal of the Second and Third Claims. See, e.g., Sumer v. Carrier Corp., 2015 U.S. Dist. LEXIS 20731, *2-3 (N.D. Cal. Feb. 20, 2015) (dismissing implied warranty claim where express warranty disclaimed all implied warranties) (citing Philippine Nat’l Oil Co. v. Garrett Corp., 724 F.2d 803, 808 (9th Cir. 1984)). In an effort to avoid dismissal, Plaintiffs offer the conclusory assertion that the limited remedy of repair and replacement in the purported express warranties failed of its essential purpose. However, Plaintiffs’ factual allegations belie this conclusion. Like in Sumer, Plaintiffs allege that Defendants did repair or replace the parts on their trucks when requested. For example, Plaintiff Jorge Guevara alleges only one problem with his truck (the LNG tank), and that when he brought his truck in for repairs “his LNG tank [was] replaced.” TAC ¶ 44. Plaintiff Ervin Midence alleges only two problems with his truck (the LNG tank and LNG pump), and that when he brought his truck in Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 25 of 34 Page ID #:1279 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -18- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 for repairs, “his LNG tank [was] replaced in 2014, [and] his LNG pump [was] replaced as well.” TAC ¶ 54. This is a common theme throughout the TAC: Plaintiffs allege that they had a problem with their truck, they brought their truck in for repairs, and Westport repaired or replaced the part at issue. 5 See, e.g., TAC passim. While some of these Plaintiffs allege that they continued to experience “problems” or had to bring their trucks in for different repairs, Plaintiffs do not allege that Westport ever failed to repair and/or replace the problem parts. Accordingly, Plaintiffs fail to plead that the exclusive repair or replace remedy failed of its essential purpose. See Sumer, 2015 U.S. Dist. LEXIS 20731 at *2-3; Philippine, 724 F.2d at 808. b. Most of Plaintiffs’ claims are time-barred. The statute of limitations for implied warranties in California is four years from the date of delivery of the product at issue. Cal. Com. Code § 2725(1)-(2); J.B. Painting & Waterproofing, Inc. v. RGB Holdings, LLC, 2016 U.S. App. LEXIS 9427 (May 23, 2016). Plaintiffs filed their original complaint on December 20, 2013, ECF No. 1, thus, the statute of limitations has run on any trucks delivered prior to December 19, 2009. Cal. Com. Code § 2725(1)-(2); J.B. Painting, 2016 U.S. App. LEXIS 9427 at *4. In the TAC, the 37 Plaintiffs allege that they began leasing their trucks on or before December 19, 2009.6 Each of these Plaintiffs’ Second and Third Claims are 5 Notably, many Plaintiffs do not even allege there was any particular problem with their truck, and instead make the conclusory assertion that they have “been required to repair or replace a number of parts much more frequently than anticipated.” See, e.g., TAC ¶¶ 46, 58, 66, 68, 73, 75, 76, 78, 79, 80, 81, 82, 83, 84, 86. In any event, each of these Plaintiffs appears to concede that whatever part was causing the problem was, in fact, “repair[ed] or replace[d].” See id. 6 The 37 Plaintiffs are: David Velasco (2009), TAC ¶ 29; Pedro Alas Ramirez (April 27, 2009), TAC ¶ 30; Alvarado Arambula (April 27, 2009), TAC ¶ 31; David Banda (June 1, 2009), TAC ¶ 32; Francisco Caballero (June 18, 2009), TAC ¶ 33; Camilo Ceballos (October 1, 2009), TAC ¶ 36; Maria Franco (May 18, 2009), TAC ¶ 40; Clovis Gonzales (May 21, 2009), TAC ¶ 41; Ramon Guerrero (August 14, 2009), TAC ¶ 43; Jorge Guevara (April 15, 2009), TAC ¶ 44; Alvaro Hernandez (May 14, 2009), TAC ¶ 45; Efrain Lara (May 14, 2009), TAC ¶ 47; Herminio Martinez (May 16, 2009), TAC ¶ 49; Luis Martinez (May 19, 2009), TAC ¶ 51; Gloria Mendieta (2009), TAC ¶ Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 26 of 34 Page ID #:1280 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -19- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 barred by the statute of limitations and must be dismissed, with prejudice. Cal. Com. Code § 2725(1)-(2); J.B. Painting, 2016 U.S. App. LEXIS 9427 at *4. C. Plaintiffs fail to plead a claim under the UCL. Plaintiffs’ SAC attempted to assert claims under the unlawful, unfair and fraudulent prongs of the UCL, and the Ninth Circuit concluded that the Court correctly dismissed those claims. In their TAC, Plaintiffs have abandoned their claim under the fraudulent prong of the UCL, and allege claims only under the unlawful and unfair prongs of the UCL. Because Plaintiffs failed to cure the defects from their SAC, however, their UCL claims should be dismissed with prejudice. 1. The UCL claim must be dismissed because Plaintiffs do not allege an injury that can be redressed by this Court. “Under the Constitution’s requirement for standing, the plaintiff must show an ‘injury in fact’ that is fairly traceable to the challenged action of the defendant and likely to be redressed by a favorable decision.” Fresno Motors, LLC v. Mercedes-Benz USA, LLC, 852 F. Supp. 2d 1280, 1316 (E.D. Cal. 2012) (citations omitted), aff’d 771 F.3d 1119 (9th Cir. 2014). “Relief for claims under the UCL is ‘generally limited to injunctive relief and restitution.’” Id. (citations omitted); see also Palmer v. Stassinos, 348 F. Supp. 2d 1070, 1088 (N.D. Cal. 2004). In the TAC, Plaintiffs seek only restitution, not injunctive relief. “A restitution 53; Ervin Midence (May 19, 2009), TAC ¶ 54; Luis Midence (April 30, 2009), TAC ¶ 55; Juan Munoz (May 29, 2009), TAC ¶ 56; Oswaldo Pozo Melo (May 14, 2009), TAC ¶ 61; Edwin Quinonez (June 25, 2009), TAC ¶ 62; Carlos Quiroa (June 18, 2009), TAC ¶ 63; Fredy Ramirez (2009), TAC ¶ 64; Wilfredo Reyes (June 18, 2009), TAC ¶ 65; Tony Rivera (June 1, 2009), TAC ¶ 66; Noe Rodriguez (May 18, 2009), TAC ¶ 67; Yamina Rodriguez (March 31, 2009), TAC ¶ 68; Douglas Romero (April 30, 2009), TAC ¶ 69; Darnell Young (May 18, 2009), TAC ¶ 74; Geovany Mendieta (July 6, 2009), TAC ¶ 76; Rogelio Rodriguez (May 21, 2009), TAC ¶ 78; Marvin Caballero (June 18, 2009), TAC ¶ 79; Garry Ebalobur (May 6, 2009), TAC ¶ 80; Jorge Gonzalez (April 30, 2009), TAC ¶ 81; Hector Martinez (May 11, 2009), TAC ¶ 82; Francisco Chavez (June 1, 2009), TAC ¶ 83; Jose Aguilar (May 6, 2009), TAC ¶ 84; Juan Gonzalez (September 20, 2009), TAC ¶ 86. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 27 of 34 Page ID #:1281 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -20- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 order against the defendant, however, ‘requires both that money or property have been lost by a plaintiff, on the one hand, and that it have been acquired by a defendant, on the other hand.’” Id. (citation omitted). That is, “Plaintiffs must identify money or property that they owned, which was unlawfully, unfairly, or fraudulently obtained by [defendant].” Id. at 1318. In Fresno, which was affirmed by the Ninth Circuit, the court held that the plaintiffs lacked standing because plaintiffs “d[id] not allege any sums Plaintiffs or any other party paid to MBUSA.” Id. at 1017. Plaintiffs’ TAC suffers from the same defect. Plaintiffs do not allege any money or property paid by Plaintiffs to Westport. Plaintiffs’ UCL claims shoud, therefore, be dismissed under either 12(b)(1) or 12(b)(6).7 2. Plaintiffs lack standing to bring claims under the UCL because they are neither consumers nor competitors. Plaintiffs admit that their trucks were purchased or leased for use in their “work” as “truck drivers.” See TAC ¶¶ 1, 15, 16. Plaintiffs’ admission establishes that they are neither consumers nor competitors, and, consequently, that they do not have standing to bring their UCL claims. See Dillon v. NBCUniversal Media LLC, No. CV 12- 09728 SJO (AJWx), 2013 U.S. Dist. LEXIS 100733, at *20 (C.D. Cal. June 18, 2013) (“[D]ismissal of UCL actions is appropriate when the plaintiff is neither a competitor nor a consumer.”); Linear Tech. Corp. v. Applied Materials, Inc., 152 Cal. App. 4th 115, 135 (2007) (“[W]here a UCL action is based on contracts not involving either the public in general or individual consumers who are parties to the contracts, a corporate plaintiff may not rely on the UCL for the relief it seeks.”); Dollar Tree Stores Inc. v. Toyama Partners LLC, 875 F. Supp. 2d 1058, 1083 (N.D. Cal. 2012) (concluding that commercial parties may not use the UCL to resolve a dispute over their economic relationship). Because Plaintiffs are neither consumers nor competitors, Plaintiffs’ Fourth and Fifth Claims should be dismissed with prejudice. 7 Westport also joins in PACCAR’s motion to strike the prayer for disgorgement. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 28 of 34 Page ID #:1282 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -21- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 3. Plaintiffs lack standing to bring claims under the UCL because they are uninjured assignees. Plaintiffs lack standing for a second, independent reason as well: they are uninjured assignees of their employer’s claims. See Amalgamated Transit Union, Local 1756, AFL-CIO v. Super. Ct., 46 Cal. 4th 993, 1002 (Cal. 2009) (holding uninjured assignees lack standing under the UCL). Plaintiffs allege in the TAC that they are either employees “who work (or worked) for Southern Counties Express [and] were assigned the rights to pursue any warranty claims against Westport and Kenworth,” TAC ¶ 16, or employees “who work (or worked) for California Cartage Express [and] were issued warranties in their own names” by the owner of the warranty, Cal Cartage, TAC ¶ 16 & Ex. E. Against that background, Plaintiffs’ Fourth Claim (unlawful prong UCL claim), which is “predicated on alleged violations of California’s express and implied warranty statutes . . . ,” TAC ¶ 122, belong to Plaintiffs’ employers, not Plaintiffs, because Plaintiffs’ employers, not Plaintiffs, would be in privity with Westport. Likewise, Plaintiffs’ Fifth Claim (unfair prong UCL claim), which is based upon alleged deceptive marketing, would belong to Plaintiffs’ employers because, as Plaintiffs’ allege, Plaintiffs “leas[ed] the[] [] trucks through their employers,” not Westport. TAC ¶ 15. As lessees, Plaintiffs are, at most, assignees of the claims of their employers. As mere assignees, Plaintiffs do not have standing to assert their UCL claims. Indeed, the California Supreme Court has held: “under the unfair competition law an injured employee’s assignment of rights cannot confer standing on an uninjured assignee.” Amalgamated Transit, 46 Cal. 4th 993, 1002 (Cal. 2009); see also In re WellPoint, Inc. Out-Of-Network “UCR” Rates Litig., 903 F. Supp. 2d 880, 898-99 (C.D. Cal. 2012). 4. Most of Plaintiffs’ UCL claims are time-barred. “The statute of limitations for a UCL violation is four years.” Cansino v. Bank of America, 224 Cal. App. 4th 1462, 2014 Cal. App. LEXIS 277, at *25 (2014). For the 37 Plaintiffs who began leasing their trucks before December 19, 2009, their UCL claims Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 29 of 34 Page ID #:1283 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -22- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 are barred by the statute of limitations. See Section III.B.4.b, supra. Notably, Plaintiffs have failed to plead sufficient facts to toll the statute of limitations under the discovery rule. See, e.g., Adams, 2010 U.S. Dist. LEXIS 33066, at *10. 5. Plaintiffs’ Unlawful Prong UCL claim must be dismissed as to Westport because Plaintiffs fail to allege any unlawful conduct by Westport. Plaintiffs allege that their Fourth Claim (unlawful prong UCL claim) is “predicated on alleged violations of California’s express and implied warranty statutes . . . .” TAC ¶ 122. However, Plaintiffs fail to allege a cognizable violation of either California’s express or implied warranty statutes. First, Plaintiffs do not allege any violation of the express warranty statute against Westport. The express warranty statute does not cover contractual warranties, rather it implies warranties as a matter of law based on representations made by the warrantor. Cal. Com. Code § 2313. Plaintiffs do not allege any representations made by Westport that Plaintiffs contend formed a warranty pursuant to Section 2313. In fact, the only express warranty claim alleged against Westport is a contractual express warranty claim. TAC ¶¶ 97-104 (express warranty allegations based on purported warranties attached as Exhibits D & E). A contractual express warranty claim, however, cannot form the basis of an unlawful prong UCL claim. Elias v. Hewlett- Packard Co., 950 F. Supp. 2d 1123, 1139-40 (N.D. Cal. 2013) (dismissing UCL claim based on contractual warranty because “an alleged breach of a warranty - a contract - is not itself an unlawful act for purposes of the UCL.”) (citation omitted); see also Shroyer v. New Cingular Wireless Servs., 606 F.3d 658, 666 (9th Cir. 2010); Rice, 2013 U.S. Dist. LEXIS 7467 at *32-33. In any event, even if breach of a contractual warranty could form the basis of an unlawful prong claim, for the reasons discussed above, Plaintiffs fail to state a claim for breach of express warranty. See Section III.A, supra. Second, Plaintiffs do not allege a cognizable breach of implied warranty claim. As discussed above, Plaintiffs’ implied warranty claims are barred by lack of privity, Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 30 of 34 Page ID #:1284 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -23- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 the disclaimers in the express warranty, the statute of limitations, and the failure to plead facts sufficient to state a claim. See Section III.B, supra. Because Plaintiffs have not alleged a cognizable violation of any California law, Plaintiffs’ unlawful prong UCL claim must be dismissed, with prejudice. 6. Plaintiffs’ Unfair Prong UCL claim must be dismissed because Plaintiffs are not consumer or competitors. Plaintiffs Fifth Claim (unfair prong UCL claim) must be dismissed because Plaintiffs are not consumers or competitors. See, e.g., Almasi v. Equilon Enters., LLC, 2012 U.S. Dist. LEXIS 128623, *27 (N.D. Cal. Sept. 10, 2012) (“Plaintiffs have failed to provide any support for their argument that they are able to bring a UCL claim for unfair practices despite not being consumers and not being competitors.”); see also Copart, Inc. v. Sparta Consulting, Inc., 2015 U.S. Dist. LEXIS 74662, *25-27 (E.D. Cal. June 9, 2015) (dismissing unfair prong claim and noting that the plaintiff did “not cite a single case where the UCL has been applied that does not rely either on consumer or competitive harm.”); Ctr. for Neuro Skills v. Blue Cross of Cal., 2013 U.S. Dist. LEXIS 148432, *26 (E.D. Cal. Oct. 15, 2013) (same). Plaintiffs have admitted that their trucks were purchased or leased for use in their “work” as “truck drivers.” See TAC ¶¶ 1, 15, 16. Because Plaintiffs are neither consumers nor competitors, they cannot bring a claim under the unfair prong of the UCL. Almasi, 2012 U.S. Dist. LEXIS 128623 at *27; Copart, 2015 U.S. Dist. LEXIS 74662 at *25-27; Neuro Skills, 2013 U.S. Dist. LEXIS 148432 at *26. Further, Plaintiffs’ Fifth Claim must be dismissed because Plaintiffs have not alleged any legally cognizable “unfair” business practice. Plaintiffs’ allegation is that “Defendants” 8 marketed the trucks as “reliable but more environmentally friendly,” TAC ¶ 127, that this was false, TAC ¶ 126-28, and that Plaintiffs would not have “turn[ed] in their older diesel vehicles” had they known the truth, TAC ¶ 128. 8 Again, Plaintiffs fail to distinguish between Defendants in pleading this claim, and therefore fail to provide Westport with adequate notice. See Section III.B.1, supra. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 31 of 34 Page ID #:1285 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -24- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 However, this allegation fails to plead an “unfair” practice under the UCL. First, to the extent Plaintiffs’ allegations rely upon allegedly false representations, Plaintiffs must plead their claims with specificity under FRCP 9(b). Vess, 317 F.3d at 1103-04. Plaintiffs have failed to do so. Plaintiffs do not identify any particular statement by Westport, do not allege when that statement was made, or that any of the Plaintiffs actually read and relied upon that statement. Indeed, neither Westport nor any of the other defendants had any interactions with Plaintiffs at the time of sale because the trucks were sold to Southern Counties and Cal Cartage - not Plaintiffs. In any event, the only representation that Plaintiffs even allege in the TAC is a representation by Inland Kenworth, not Westport. Further, to the extent Plaintiffs are relying upon a fraud-by-omission theory, Plaintiffs plead no facts establishing that Westport had knowledge of any defect that it failed to disclose. Under California law, “the failure to disclose a fact that a manufacturer does not have a duty to disclose, i.e., a defect of which it is not aware, does not constitute an unfair or fraudulent practice.” Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1145 (9th Cir. 2012); see also, e.g., Rice v. Sunbeam Prods., 2013 U.S. Dist. LEXIS 7467, *28 (C.D. Cal. Jan. 7, 2013) (same). Plaintiffs have therefore failed to plead any fraud by Westport. See Hibu Inc. v. Lawrence, 2013 U.S. Dist. LEXIS 173324, at *14 (C.D. Cal. Nov. 25, 2013) (“To state a claim under the fraudulent prong of the UCL, a plaintiff must allege that he was exposed to a particular misrepresentation, as well as the specifics of his reliance upon the misrepresentation.”); Jent v. Northern Trust Corp., 2013 U.S. Dist. LEXIS 154554, at *10 (E.D. Cal. Oct. 28, 2013) (same); see also Baltazar, 2011 U.S. Dist. LEXIS 13187, at *6 (“[E]ach named Plaintiff must allege with greater specificity his or her reasonable reliance on the particular commercial or advertisement.”). Second, the alleged misstatement is not actionable as fraud in the first instance because the alleged misstatements are classic puffery. Punian v. Gillette Co., 2016 U.S. Dist. LEXIS 34164, *27 (N.D. Cal. Mar. 15, 2016). “[A]dvertising which merely states in general terms that one product is superior is not actionable.” Id. (citation omitted). Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 32 of 34 Page ID #:1286 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -25- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 Here, Plaintiffs’ allege that Defendants’ misrepresented that the trucks were “just as reliable [as diesel trucks] but more environmentally friendly,” TAC ¶ 4, and that the trucks “offer[] operators the fuel economy they need to substantially lower fuel costs while at the same time reducing emissions[,] [a]ll without sacrificing horsepower, torque or efficiency,” TAC ¶ 2. These alleged statements are nothing more than “exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely.” Punia, 2016 U.S. Dist. LEXIS at *27 (quoting Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1145 (9th Cir. 1997)). Courts have routinely found such statements to be nonactionable puffery, including statements that “a product ‘delivers the power you need,’ has ‘ultra-reliable performance,’ and provides a ‘versatile, reliable system.’” Id. at *29. In sum, because Plaintiffs fail to allege any cognizable unfair business practice, Plaintiffs’ Fifth Claim should be dismissed, with prejudice. IV. CONCLUSION For the foregoing reasons, Westport respectfully requests that the Court dismiss Plaintiffs’ claims with prejudice. If the Court permits Plaintiffs to amend their complaint for a fourth time, Westport requests that the Court stay discovery until, and unless, Plaintiffs can successfully plead a claim. See Timmons, 263 F.R.D. at 585 (Real, J.) (“[A] plaintiff who fails to meet the pleading requirements of Rule 8 is not entitled to conduct discovery with the hope that it might then permit her to state a claim.”). DATED: July 18, 2016 STRADLING YOCCA CARLSON & RAUTH, P.C. By: /s/ Craig A. Taggart Craig A. Taggart Bradley E. Marrett Attorneys for Defendant WESTPORT FUEL SYSTEMS (US) INC. f/k/a WESTPORT FUEL SYSTEMS INC. Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 33 of 34 Page ID #:1287 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -1- WESTPORT’S MOTION TO DISMISS VELASCO’S THIRD AMENDED COMPLAINT LITIOC/2141626v1/103002-0001 CERTIFICATE OF SERVICE I am employed in the County of Orange, State of California. I am over the age of 18 and not a party in the within action. My business address is at 660 Newport Center Drive, Suite 1600, Newport Beach, CA 92660. On the date set forth below, I served the foregoing document(s) described as: DEFENDANT WESTPORT FUEL SYSTEMS (US) INC. F/K/A WESTPORT FUEL SYSTEM INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ THIRD AMENDED CLASS ACTION COMPLAINT on all other parties and/or their attorney(s) of record in this action BY CM/ECF SYSTEM. I certify that I cause a copy of the above document to be served via the court’s CM/ECF System. DATED: July 18, 2016 s/Craig A. Taggart Craig A. Taggart Case 2:13-cv-09407-R-AS Document 56-1 Filed 07/18/16 Page 34 of 34 Page ID #:1288 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH [PROPOSED] ORDER LITIOC/2141624v1/103002-0001 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION DAVID VELASCO, et al., individually and on behalf of all similarly-situated consumers Plaintiffs, vs. PACCAR INC., dba KENWORTH TRUCK COMPANY, INLAND KENWORTH (US), Inc., and WESTPORT FUEL SYSTEMS INC. Defendants. CASE NO. CV 13-09407-R (AS) [PROPOSED] ORDER GRANTING DEFENDANT WESTPORT FUEL SYSTEMS (US) INC. F/K/A WESTPORT FUEL SYSTEMS INC.’S MOTION TO DISMISS PLAINTIFFS’ THIRD AMENDED CLASS ACTION COMPLAINT Date: August 15, 2016 Time: 10:00 a.m. Ctrm: 8 Judge: Hon. Manuel L. Real JASON H. ANDERSON, State Bar No. 172087 janderson@sycr.com CRAIG A. TAGGART, State Bar No. 239168 ctaggart@sycr.com BRADLEY E. MARRETT, State Bar No. 288079 bmarrett@sycr.com STRADLING YOCCA CARLSON & RAUTH, P.C. 660 Newport Center Drive, Suite 1600 Newport Beach, CA 92660-6422 Telephone: (949) 725-4000 Facsimile: (949) 725-4100 Attorneys for Defendants WESTPORT FUEL SYSTEMS (US) INC. f/k/a WESTPORT FUEL SYSTEMS INC. Case 2:13-cv-09407-R-AS Document 56-2 Filed 07/18/16 Page 1 of 3 Page ID #:1289 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -1- [PROPOSED] ORDER LITIOC/2141624v1/103002-0001 Defendant Westport Fuel Systems (US) Inc. f/k/a Westport Fuel Systems Inc. (“Westport”) moved this Court pursuant to Federal Rules of Civil Procedure Rules 8(a), 9(b), 12(b)(6), and 12(b)(1) for an order dismissing all claims against it in the Third Amended Class Action Complaint (“TAC”), specifically claims for relief one through five. Westport also moved to strike and/or dismiss Plaintiffs’ prayer for disgorgement and paragraphs 123 and 135 in the TAC pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(f). Having considered all of the papers filed by the parties in connection with Westport’s Motion to Dismiss, the parties’ arguments at the hearing on the Motion, and other matters of which the Court may properly consider, the Court orders as follows: Westport’s Motion to Dismiss is GRANTED. Claims one through five in the TAC against Westport are DISMISSED WITH PREJUDICE. Westport’s request to strike paragraph c to the prayer for relief and paragraphs 123 and 135 in the TAC is GRANTED. IT IS SO ORDERED. Date: ____________________ _________________________________ HON. MANUEL L. REAL UNITED STATES DISTRICT JUDGE Case 2:13-cv-09407-R-AS Document 56-2 Filed 07/18/16 Page 2 of 3 Page ID #:1290 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 STRADLING YOCCA CARLSON & RAUTH LAW Y E RS NEW PO RT BE A CH -2- [PROPOSED] ORDER LITIOC/2141624v1/103002-0001 CERTIFICATE OF SERVICE I am employed in the County of Orange, State of California. I am over the age of 18 and not a party in the within action. My business address is at 660 Newport Center Drive, Suite 1600, Newport Beach, CA 92660. On the date set forth below, I served the foregoing document(s) described as: [PROPOSED] ORDER GRANTING DEFENDANT WESTPORT FUEL SYSTEMS (US) INC. F/K/A WESTPORT FUEL SYSTEMS INC.’S MOTION TO DISMISS PLAINTIFFS’ THIRD AMENDED CLASS ACTION COMPLAINT on all other parties and/or their attorney(s) of record in this action BY CM/ECF SYSTEM. I certify that I cause a copy of the above document to be served via the court’s CM/ECF System. DATED: July 18, 2016 s/Craig A. Taggart Craig A. Taggart Case 2:13-cv-09407-R-AS Document 56-2 Filed 07/18/16 Page 3 of 3 Page ID #:1291