Dean Rollolazo et al v. Bmw of North America, Llc et al

NOTICE OF MOTION AND MOTION to Dismiss Case Plaintiffs' Consolidated Class Action Complaint for Failure to State a Claim

C.D. Cal.November 28, 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 4824-6491-8077.1 8:16-cv-00966-BRO-SS BMW OF NORTH AMERICA, LLC’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW LEWIS BRISBOIS BISGAARD & SMITH LLP ERIC Y. KIZIRIAN, SB# 210584 Eric.Kizirian@lewisbrisbois.com MICHAEL K. GRIMALDI, SB# 280939 Michael.Grimaldi@lewisbrisbois.com ZOURIK ZARIFIAN, SB # 306368 Zourik.Zarifian@lewisbrisbois.com 633 West 5th Street, Suite 4000 Los Angeles, California 90071 Tel.: 213.250.1800; Fax: 213.250.7900 Attorneys for Defendant, BMW of North America, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION BARRY BRAVERMAN, JOEL GREEN, CHEVAY JONES, DR. GLYNDA ROBERSON, EDO TSOAR, PETER BERNARD, LAWRENCE CURCIO, ROBERT DESATNIK, JOHN LINGSWEILER, THOMAS MUNK, CHARLES OLSEN, NAVEEN PARMESHWAR, BRANDON REDMOND, STEVE RIDGES, ADEEL SIDDIQUI, PETER WEINSTEIN, AND ERIC WONDERLY, Plaintiffs, vs. BMW OF NORTH AMERICA, LLC, a Delaware Limited Liability Company, and BMW AG, a corporation organized under the laws of Germany, Defendants. Case No. 8:16-cv-00966-BRO-SS Hon. Beverly Reid O’Connell BMW OF NORTH AMERICA, LLC’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT FOR FAILURE TO STATE A CLAIM (FED. R. CIV. P. 12(B)(6)) Date: February 6, 2017 Time: 1:30 p.m. Place: Courtroom 7C Case 8:16-cv-00966-BRO-SS Document 47 Filed 11/28/16 Page 1 of 3 Page ID #:705 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 4824-6491-8077.1 1 8:16-cv-00966-BRO-SS BMW OF NORTH AMERICA, LLC’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW NOTICE OF MOTION AND MOTION TO DISMISS PLEASE TAKE NOTICE that on Monday, February 6, 2017, at 1:30 p.m. or as soon thereafter as counsel may be heard, before the Honorable Beverly Reid O’Connell, Courtroom 7C of the United States Courthouse, located at 350 West 1st Street, Los Angeles, California, defendant BMW of North America, LLC (“BMW NA”) will and hereby does move the Court to dismiss plaintiffs’ Consolidated Class Action Complaint (“Complaint”). Specifically, by this motion, under Fed. R. Civ. P. 8, 9(b), and 12(b)(6), BMW NA seeks an order dismissing the following counts in the Complaint for failure to state a claim upon which relief can be granted: A-I, B-V, B-VII, B-VIII, C-III, C-IV, C-V, C-VI, D-III, D-IV, D-V, D-VI, E-IV, E-V, E-VI, E-VII, F-III, F-IV, F-V, F-VI, G-III, G-IV, G-V, G-VI, H-III, H-IV, H-V, H-VI, I-III, I-IV, I-V, I-VI, J-III, J-IV, J-V, J-VI, K-III, K-IV, K-V, K-VI, L-III, L-IV, L-V, and L-VI. This motion is made following the conferences of counsel pursuant to L.R. 7-3. By letter dated November 16, 2016, counsel for BMW NA outlined in detail, with appropriate case law citations, the various pleading defects BMW NA would challenge in its motion to dismiss. Thereafter, on November 21, 2016, the parties participated in a lengthy telephonic meet and confer and on November 23, 2016, plaintiffs’ counsel agreed to withdraw some of the challenged claims in the Complaint, but not all, necessitating this motion. // // // // // // // // // Case 8:16-cv-00966-BRO-SS Document 47 Filed 11/28/16 Page 2 of 3 Page ID #:706 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 4824-6491-8077.1 2 8:16-cv-00966-BRO-SS BMW OF NORTH AMERICA, LLC’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW BMW NA’s motion is based on this notice, the accompanying memorandum of points and authorities, and all other facts the Court may or should take notice of, all files, records, and proceedings in this case, and any oral argument the Court may entertain. Dated: November 28, 2016 LEWIS BRISBOIS BISGAARD & SMITH LLP By: Eric Y. Kizirian Attorneys for Defendant BMW of North America, LLC Case 8:16-cv-00966-BRO-SS Document 47 Filed 11/28/16 Page 3 of 3 Page ID #:707 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 4813-4318-1629.10 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW LEWIS BRISBOIS BISGAARD & SMITH LLP ERIC Y. KIZIRIAN, SB# 210584 Eric.Kizirian@lewisbrisbois.com MICHAEL K. GRIMALDI, SB# 280939 Michael.Grimaldi@lewisbrisbois.com ZOURIK ZARIFIAN, SB # 306368 Zourik.Zarifian@lewisbrisbois.com 633 West 5th Street, Suite 4000 Los Angeles, California 90071 Tel.: 213.250.1800; Fax: 213.250.7900 Attorneys for Defendant, BMW of North America, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION BARRY BRAVERMAN, JOEL GREEN, CHEVAY JONES, DR. GLYNDA ROBERSON, EDO TSOAR, PETER BERNARD, LAWRENCE CURCIO, ROBERT DESATNIK, JOHN LINGSWEILER, THOMAS MUNK, CHARLES OLSEN, NAVEEN PARMESHWAR, BRANDON REDMOND, STEVE RIDGES, ADEEL SIDDIQUI, PETER WEINSTEIN, AND ERIC WONDERLY, Plaintiffs, vs. BMW OF NORTH AMERICA, LLC, a Delaware Limited Liability Company, and BMW AG, a corporation organized under the laws of Germany, Defendants. Case No. 8:16-cv-00966-BRO-SS Hon. Beverly Reid O’Connell MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT DUE TO FAILURE TO STATE A CLAIM (FED. R. CIV. P. 12(B)(6)) Date: February 6, 2017 Time: 1:30 p.m. Place: Courtroom 7C Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 1 of 32 Page ID #:708 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 4813-4318-1629.10 i 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW TABLE OF CONTENTS Page I. Introduction .......................................................................................................1 II. Summary of Relevant Facts ..............................................................................3 III. Plaintiffs Have Not Alleged Facts To Establish Article III Standing...............8 IV. Plaintiffs’ Express Warranty Claims Fail For Numerous Reasons.................11 A. BMW NA’s Warranty Covering “Defects in Materials or Workmanship” Is Not Triggered, Much Less Breached, by Plaintiffs’ Design Defect Claims. .........................................................11 B. Plaintiffs Have Not Alleged a Breach of a Warranty That May Have Been Created by Representations................................................13 V. Plaintiffs’ Implied Warranty Claims Also Fail. ..............................................14 A. Plaintiffs Lack Privity With BMW NA Which Bars Their Implied Warranty Claims in Most States..............................................14 B. Plaintiffs Have Not Plead Any Facts To Demonstrate Third-Party Beneficiary Status. ................................................................................17 VI. Plaintiffs’ Nationwide Magnuson-Moss Claim Fails Because Their State Law Warranty Claims Fail. ....................................................................19 VII. Plaintiffs’ Unjust Enrichment Claims Must Be Dismissed Because Plaintiffs Already Have an Adequate Remedy at Law. ..................................20 VIII. The California Plaintiffs’ “Exemplary Damages” Claim Requires Dismissal Because It Is Not an Independent Cause of Action........................24 IX. Conclusion.......................................................................................................24 Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 2 of 32 Page ID #:709 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 4813-4318-1629.10 ii 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW TABLE OF AUTHORITIES Cases Afoa v. China Airlines Ltd., 2013 U.S. Dist. LEXIS 93816 (W.D. Wash. July 3, 2013) ...........................16 Am. Honda Motor Co. v. Motorcycle Info. Network, Inc., 390 F. Supp. 2d 1170 (M.D. Fla. 2005) .........................................................20 Americoach Tours v. Detroit Diesel Corp., 2005 U.S. Dist. LEXIS 40182 (W.D. Tenn. Sep. 23, 2005) ..........................16 Annunziato v. eMachines, Inc., 402 F. Supp. 2d 1133 (C.D. Cal. 2005)..........................................................17 Armstrong v. Davis, 275 F.3d 849 (9th Cir. 2001)..........................................................................10 Arndell v. Robison, Belaustegui, Sharp & Low, 2012 U.S. Dist. LEXIS 126570 (D. Nev. Sep. 6, 2012) ................................24 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .......................................................................................19 Barakezyan v. BMW of N. Am., LLC, 2016 U.S. Dist. LEXIS 68839 (C.D. Cal. Apr. 7, 2016)..........................10, 12 Barnett v. Leiserv, Inc., 968 F. Supp. 690 (N.D. Ga. 1997) .................................................................17 Blanco v. Baxter Healthcare Corp., 158 Cal. App. 4th 1039 (2008).......................................................................15 Brothers v. Hewlett-Packard Co., 2007 U.S. Dist. LEXIS 13155 (N.D. Cal. Feb. 12, 2007)..............................12 Caterpillar, Inc. v. Usinor Industeel, 393 F. Supp. 2d 659 (N.D. Ill. 2005) .............................................................16 Cerdant, Inc. v. DHL Express (USA), Inc., 2009 U.S. Dist. LEXIS 27070 (S.D. Ohio Mar. 30, 2009) ............................21 Cisneros v. Instant Cap. Funding Group, Inc., 263 F.R.D. 595, 606 (E.D. Cal. 2009)..............................................................3 Clark v. LG Elecs. U.S.A., Inc., 2013 U.S. Dist. LEXIS 155179 (S.D. Cal. Oct. 29, 2013) ......................12, 13 Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008)........................................................................17 Copelan v. Infinity Ins. Co., 2016 U.S. Dist. LEXIS 82847 (C.D. Cal. June 14, 2016) .............................10 Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 3 of 32 Page ID #:710 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 4813-4318-1629.10 iii 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Daugherty v. Am. Honda Motor Co., 144 Cal. App. 4th 824 (2006).........................................................................19 Davencourt at Pilgrims Landing Homeowners Ass’n v. Davencourt at Pilgrims Landing, LC, 221 P.3d 234 (Utah 2009) ..............................................................................16 David v. Am. Suzuki Motor Corp., 629 F. Supp. 2d 1309 (S.D. Fla. 2009) ....................................................22, 23 Davis v. Runnels, 2011 U.S. Dist. LEXIS 60680 (E.D. Cal. June 7, 2011)................................24 DigaComm, LLC v. Vehicle Safety & Compliance, LLC, 2009 U.S. Dist. LEXIS 15790 (N.D. Ill. Mar. 2, 2009) .................................21 Francis v. Mead Johnson & Co., 2010 U.S. Dist. LEXIS 137630 (D. Colo. Dec. 17, 2010).............................20 Gertz v. Toyota Motor Corp., 2011 U.S. Dist. LEXIS 94183 (C.D. Cal. Aug. 22, 2011) .............................12 Gottsdanker v. Cutter Labs., 182 Cal. App. 2d 602 (1960)..........................................................................15 Hahn v. Jennings, 2004 Ohio App. LEXIS 4320 (Ct. App. 2004) ..............................................16 Ham v. Hain Celestial Grp., Inc., 70 F. Supp. 3d 1188 (N.D. Cal. Oct. 3, 2014)................................................11 Harris Grp. v. Robinson, 209 P.3d 1188 (Colo. App. 2009) ..................................................................20 Heaphy v. State Farm Mut. Auto. Ins. Co., 2005 U.S. Dist. LEXIS 25650 (W.D. Wash. Oct. 12, 2005) .........................10 Hemphill v. Sayers, 552 F. Supp. 685 (S.D. Ill. 1982) ...................................................................18 In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prods. Liab. Litig., 754 F. Supp. 2d 1145 (C.D. Cal. 2010)............................................................9 In re Toyota Motor Corp., 790 F. Supp. 2d 1152 (C.D. Cal. 2011)............................................................9 Jensen v. Bayer AG, 371 Ill. App. 3d 682 (2007)............................................................................16 Johnson v. Monsanto Co., 2002 Ohio App. LEXIS 4740 (Ct. App. 2002) ..............................................16 Kirsopp v. Yamaha Motor Co., 2015 U.S. Dist. LEXIS 68639 (C.D. Cal. Jan. 7, 2015) ..........................17, 19 Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 4 of 32 Page ID #:711 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 4813-4318-1629.10 iv 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW MC, Inc. v. Tex. City Ref., Inc., 822 S.W.2d 252 (Tex. App. 1991) .................................................................13 McCabe v. Am. Honda Motor Co., 100 Cal. App. 4th 1111 (2002).................................................................11, 12 McGlashan v. Snowden, 292 Ga. 450, 738 S.E.2d 619 (2013)..............................................................20 McHenry v. Renne, 84 F.3d 1172 (9th Cir. 1996)............................................................................3 McIntosh v. Wiley, 2006 U.S. Dist. LEXIS 89589 (S.D. Tex. Dec. 11, 2006) .............................18 McLaughlin v. Monaco RV LLC, 2015 U.S. Dist. LEXIS 122072 (M.D. Fla. Sep. 14, 2015) ...........................13 McQueen v. Minolta Bus. Sols., Inc., 275 Ga. App. 297 (2005)................................................................................15 Mesa v. BMW of N. Am., LLC, 904 So. 2d 450 (Fla. Dist. Ct. App. 2005) .....................................................15 Monticello v. Winnebago Indus., 369 F. Supp. 2d 1350 (N.D. Ga. 2005) ..........................................................15 Murray v. Elations Co., LLC, 2014 U.S. Dist. LEXIS 107721 (S.D. Cal. Aug. 4, 2014) .......................13, 14 Olney v. Beaman Bottling Co., 220 Tenn. 459 (1967) .....................................................................................16 Orient Handel v. United States Fid. & Guar. Co., 192 Cal. App. 3d 684 (1987)..........................................................................24 Orthoflex, Inc. v. Thermotek, Inc., 2013 U.S. Dist. LEXIS 112865 (N.D. Tex. Aug. 9, 2013) ............................13 Pacheco v. Boar’s Head Provisions Co., 2010 U.S. Dist. LEXIS 30463 (W.D. Mich. Mar. 30, 2010) .........................21 Pershing Pac. W., LLC v. Ferretti Grp., USA, Inc., 2013 U.S. Dist. LEXIS 9851 (S.D. Cal. Jan. 24, 2013) .................................19 Rahman v. Mott’s LLP, 2014 U.S. Dist. LEXIS 11767 (N.D. Cal. Jan. 29, 2014) ..............................10 Ramirez v. Gen. Elec. Co., 2008 U.S. Dist. LEXIS 84178 (D. Conn. Oct. 20, 2008).........................23, 24 Risner v. Regal Marine Indus., 8 F. Supp. 3d 959 (S.D. Ohio 2014)...............................................................16 /// Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 5 of 32 Page ID #:712 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 4813-4318-1629.10 v 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Sanchez-Knutson v. Ford Motor Co., 52 F. Supp. 3d 1223 (S.D. Fla. 2014).............................................................18 Sater v. Chrysler Grp. LLC, 2015 U.S. Dist. LEXIS 21022 (C.D. Cal. Feb. 20, 2015)..............................11 Savett v. Whirlpool Corp., 2012 U.S. Dist. LEXIS 124086 (N.D. Ohio Aug. 31, 2012) .........................18 Season Comfort Corp. v. Ben A. Borenstein Co., 281 Ill. App. 3d 648 (1995)............................................................................21 Seattle Prof’l Eng’g Emples. Ass’n v. Boeing Co., 139 Wash. 2d 824 (2000) ...............................................................................22 Shein v. Canon U.S.A., Inc., is instructive, here. 2009 U.S. Dist. LEXIS 131519 (C.D. Cal. June 22, 2009)..................14 Speier-Roche v. Volkswagen Grp. of Am., Inc., 2014 U.S. Dist. LEXIS 59991 (S.D. Fla. Apr. 30, 2014) ..............................22 Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962 (C.D. Cal. 2014)..............................................................9 Tapia v. Davol, Inc., 116 F. Supp. 3d 1149 (S.D. Cal. 2015) ..........................................................15 Thongchoom v. Graco, 117 Wash. App. 299 (2003) ...........................................................................16 Thorpe v. Wash. City, 243 P.3d 500 (Utah Ct. App. 2010)................................................................22 Tolliver v. Monaco Coach Corp., 2006 U.S. Dist. LEXIS 40007 (M.D. Fla. June 16, 2006) .............................15 Traxler v. PPG Indus., 158 F. Supp. 3d 607 (N.D. Ohio 2016) ..........................................................18 Troup v. Toyota Motor Corp., 545 F. App’x 668 (9th Cir. 2013)...................................................................12 Walsh v. Ford Motor Co., 807 F.2d 1000 (D.C. Cir. 1986) .....................................................................19 Whitt v. Mazda Motor of Am., Inc., 2011 Ohio App. LEXIS 2619 (Ct. App. 2011) ..............................................12 /// /// /// Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 6 of 32 Page ID #:713 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 4813-4318-1629.10 vi 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Statutory Authorities 15 U.S.C. § 2301 et seq ...............................................................................................6 720 ILCS 295/1A.........................................................................................................7 815 ILCS 505/1 et seq .................................................................................................7 Cal. Bus. & Prof. Code § 17200 et seq........................................................................6 Cal. Bus. & Prof. Code § 17500 et seq........................................................................6 Cal. Civ. Code § 1750 et seq .......................................................................................6 Cal. Civ. Code §§ 1791.1 &, 1792 .............................................................................6 Cal. Civ. Code § 3294............................................................................................6, 24 Cal. Com. Code § 2314................................................................................................6 Colo. Rev. Stat. § 6-1-101 et seq .................................................................................7 Colo. Rev. Stat. § 4-2-313 et seq .................................................................................7 Colo. Rev. Stat. § 4-2-314 et seq .................................................................................7 Fla. Stat. § 501.201 et seq............................................................................................7 Fla. Stat. § 672.313 et seq............................................................................................7 Ga. Code Ann. § 10-1-390 et seq ................................................................................6 Ga. Code Ann. § 10-1-370 et seq ................................................................................7 Ga. Code Ann. § 11-2-313 et seq ................................................................................7 Ga. Code Ann. § 11-2-314 et seq ................................................................................7 Ill. Comp. 815 ILCS 505/1 et seq................................................................................7 Ill. Comp. 810 ILCS 720 et seq ...................................................................................7 Ill Comp. 5/2-314 et seq ..............................................................................................7 Ill Comp. 5/2A-212 et seq ...........................................................................................7 Mich. Comp. Laws § 440.2314....................................................................................7 Mich. Comp. Laws § 445.903 et seq ...........................................................................7 Ohio Rev. Code § 1302.26 ..........................................................................................7 Ohio Rev. Code § 1302.27 ..........................................................................................7 Ohio Rev. Code § 1345.01 et seq ................................................................................7 Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 7 of 32 Page ID #:714 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 4813-4318-1629.10 vii 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Tenn. Code § 47-2-313 ...............................................................................................7 Tenn. Code § 47-2-314 ...............................................................................................7 Tex. Bus. & Com. Code § 2.313 .................................................................................7 Tex. Bus. & Com. Code § 2.314 .................................................................................7 Tex. Bus. & Com. Code § 17.41 .................................................................................7 Utah Code Ann. § 13-11-1 et seq ................................................................................7 Utah Code Ann. § 70A-2-313......................................................................................7 Utah Code Ann. § 70A-2-314......................................................................................7 Wash. Rev. Code § 19.86 ............................................................................................7 Wash. Rev. Code § 62A.2-313 ....................................................................................7 Wash. Rev. Code § 62A.2-614 ................................................................................7, 8 U.C.C. § 2-313 ............................................................................................................7 U.C.C. § 2-314 ............................................................................................................7 Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 8 of 32 Page ID #:715 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 4813-4318-1629.10 1 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW I. INTRODUCTION Plaintiffs are fourteen lessees and three purchasers of 2014-2016 model year BMW i3 vehicles with the Range Extender option (“Range Extender” or “REx”). The REx is an optional feature on BMW i3 electric vehicles which adds “a 650cc gas- powered engine (essentially a BMW motorcycle engine) that runs a generator… [¶] …to produce electricity to charge the battery in order to maintain its charge.” The REx “is not activated until the initial [battery] charge is depleted to approximately 6.5%.” Vehicles with the REx option can be driven up to 150 miles, as compared to the pure electric models of the i3, which have an 80-110 mile range. The REx is intended for drives that push the mileage limits of the pure-electric i3, and provides additional range to reach a charging point, without fear of being stranded. This lawsuit is not about the advertised range of vehicles with the REx. Indeed, plaintiffs do not contend the BMW i3 REx vehicles do not reach the advertised range. Instead, plaintiffs allege their vehicles are defectively designed because, in certain high- load driving conditions after the REx is activated (such as steep hill climbs with a highly-depleted battery), their vehicles’ speed and power may be limited (what plaintiffs call “limp mode”). Plaintiffs claim BMW of North America, LLC (“BMW NA”), the U.S. distributor of BMW brand vehicles, is liable to them for this alleged design defect in a Consolidated Class Action Complaint (“Complaint” or “Comp.”) that asserts forty-one separate causes of action for breach of contract, breach of express warranty, breach of implied warranty, unjust enrichment, violation of various consumer protection laws, and a standalone claim for punitive damages. Given the Complaints’ size, scope and the extent of the various pleading defects, BMW NA challenges the most defective of plaintiffs’ claims and pleading deficiencies in this motion, as follows: • Article III Standing: Plaintiffs have not plausibly alleged facts that establish an “injury in fact” that confers Article III standing. Each plaintiff summarily claims “diminished value” without factual support-a claim that is especially inappropriate for the fourteen lessees who can never realize a “diminished value” for a vehicle that is not Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 9 of 32 Page ID #:716 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 4813-4318-1629.10 2 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW theirs to sell. Further, plaintiffs’ allegations of injury based on non-specific “out-of- pocket losses, future attempted repairs, loss of warranty value, and diminished value” (an allegation that all 17 plaintiffs parrot without explanation), is precisely the type of conclusory claim of overpayment for a product that several courts in this district do not establish Article III standing. • Breach of Express Warranty: Plaintiffs withdrew several of their express warranty claims following the parties’ Local Rule 7-3 meet and confer (see section II and Ex. B hereto), but their remaining express warranty claims are not viable either. Plaintiffs are pursuing a design defect theory, which is not covered under BMW’s limited warranty covering defects in “materials and workmanship.” Further, the warranty by representation claims lack merit because the cited representations each pertain to the subject vehicles’ driving range. Yet plaintiffs’ claims center on reduced performance and speed in certain REx driving conditions, not whether BMW i3 REx vehicles attain the advertised driving range up to 150 miles. • Breach of Implied Warranty: Plaintiffs’ implied warranty claims under several states’ laws fail because these states each require privity of contract to assert an implied warranty claim, which plaintiffs have not and cannot plead in a claim against BMW NA. Further, several of these states do not recognize a “third party beneficiary” exception to the privity requirement, which plaintiffs have not adequately pled through their fact-free third party beneficiary proclamations. • Unjust Enrichment: Plaintiffs’ claims under several state unjust enrichment laws fail because unjust enrichment is not a recognized stand-alone cause of action in some states, cannot be asserted where plaintiffs have an adequate legal remedy as plaintiffs do here, or both. • Punitive Damages: Plaintiffs cannot assert a standalone claim for punitive damages because punitive damages are a form of relief, rather than a standalone cause of action, under California law. // Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 10 of 32 Page ID #:717 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 4813-4318-1629.10 3 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW In short, the Complaint has numerous pleading defects that cannot withstand scrutiny. BMW NA’s motion should be granted. II. SUMMARY OF RELEVANT FACTS There are seventeen named plaintiffs in this lawsuit-six from California, two from Florida, and one each from Colorado, Georgia, Illinois, Michigan, Ohio, Tennessee, Texas, Utah, and Washington. Comp. ¶¶ 60-76.1 Plaintiffs assert a multitude of claims against BMW NA arising from their lease or purchase of 2014, 2015, or 2016 BMW i3 vehicles with Range Extenders (“subject vehicles”). According to plaintiffs, “[t]he range extender is a 650cc gas-powered engine (essentially a BMW motorcycle engine) that runs a generator… [¶] …to produce electricity to charge the battery in order to maintain its charge” (id. ¶ 20-21) and “is not activated until the initial charge is depleted to approximately 6.5%” (id. ¶ 22). Plaintiffs allege that when the Range Extender on the subject vehicles is activated, the vehicle enters a so-called “limp mode” which affects the vehicle’s speed and performance. Id. ¶ 33-35. Plaintiffs claim that “[e]xtended range was the core of BMW’s marketing efforts and a driving factor in purchase decisions.” Id. ¶ 52. Specifically, plaintiffs allege “BMW”2 represented the following: 1 Consistent with the Court’s standing order, all citations to cases or documents in the Court docket contain a hyperlink to the case or the Court docket. 2 Plaintiffs refer to a monolithic “BMW” throughout their Complaint without differentiating between BMW NA and BMW AG. Thus, the complaint fails to give adequate notice to BMW NA of its specific alleged wrongdoing. Indeed, this grouping of defendants is improper because Rule 9(b) does not allow plaintiffs “to merely lump multiple defendants together” and instead “require[s] plaintiffs to differentiate their allegations when suing more than one defendant . . . and inform each defendant separately of the allegations surrounding his alleged participation in the fraud.” Swartz, 476 F.3d at 764-65; Cisneros v. Instant Cap. Funding Group, Inc., 263 F.R.D. 595, 605, 606 (E.D. Cal. 2009) (grouping fails to “‘provide each and every defendant with enough information to enable them to know what misrepresentations are attributable to them,’” and “to distinguish the multiple defendants’ roles in the alleged fraud”). Rule 8 imposes similar requirements. See McHenry v. Renne, 84 F.3d 1172, 1177 (9th Cir. (footnote continued) Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 11 of 32 Page ID #:718 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 4813-4318-1629.10 4 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW • The “Range Extender ‘[e]xtends driving pleasure’ by doubling the range of the i3 from approximately 81 miles to 150 miles.” Id. ¶ 2; • “BMW broadly boasted about the performance of the i3 coupled with the Range Extender. On its website, BMW uses a graphic to illustrate its claim that the Range Extender extends the range from approximately 81 miles per charge to 150 miles per charge.” Id. ¶ 30; • “[R]epresentations on BMW’s website at the webpages that contained both general overview of the BMW i3, which claimed that the REx feature extended the range of the i3 from 81 miles on the vehicle’s electric battery alone to a 150 miles [sic] using the fuel-powered Range Extender, and the technical specifications, which labeled the small motor as ‘Range Extender.’” Id. ¶ 61; • Dealer representatives told some plaintiffs “that the REx feature extended the range of the i3 from 80 to 150 miles.” Id. ¶¶ 63-67, 69, 71-74, 76. Although plaintiffs focus on BMW’s alleged “range” representations, the Complaint nowhere states the subject vehicles do not in fact have a 150-mile range or cannot travel up to 150 miles per charge. Instead, plaintiffs’ lone claim is that once the Range Extender is activated to charge the battery, the subject vehicles may, depending on driving conditions, operate with reduced power and speed (what plaintiffs call “limp mode”). Id. ¶¶ 34, 60-76. Plaintiffs contend this reduced power driving mode was not disclosed to consumers and constitutes a defect.3 Plaintiffs purport to represent a 1996) (holding that Rule 8 requires plainly stating “which defendant is liable to the plaintiff for which wrong”). 3 BMW NA disputes both that reduced power driving for a heavily discharged battery is a “defect,” presents a safety concern, or that it was not disclosed. In fact, the owner’s manual for 2015 model year vehicles, for example, expressly states in the Range Extender description that “If the high-voltage battery is heavily discharged during the trip, the performance and some comfort features are reduced step-by-step to extend the range.” Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 12 of 32 Page ID #:719 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 4813-4318-1629.10 5 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW nationwide class consisting of “[a]ll persons or entities who purchased or leased an ‘Affected Vehicle’ before May 17, 2016, and who either (i) still own or lease the Affected Vehicle, or (ii) sold the Affected Vehicle before May 17, 2016. Affected Vehicles include the Model Years 2014-2016 BMW i3 with Range Extender.” Id. ¶ 91. Plaintiffs also seek to represent eleven subclasses for California, Colorado, Florida, Georgia, Illinois, Michigan, Ohio, Tennessee, Texas, Utah, and Washington on the same basis as their nationwide class. Id. The Complaint provides the following details regarding plaintiffs and their vehicle purchases and/or leases: Plaintiff’s Name State of Residence & Purchase Model Year i3 Lease or Purchase Selling Party Date of Lease or Purchase ¶ Barry Braverman Both CA 2016 Lease Stevens Creek BMW February 20, 2016 60 Joel Green Both CA 2014 Lease Valencia BMW January 21, 2015 61 Chevay Jones Both CA 2015 Lease El Cajon BMW October 15, 2015 62 Dr. Glynda Roberson Both CA Unkno wn Lease Authorized BMW Dealer Unknown 63 Edo Tsoar Both CA 2015 Lease Bob Smith BMW January 27, 2016 64 Peter Weinstein OR, CA 2014 Lease BMW of San Rafael April 29, 2015 65 Thomas Munk AZ, CO 2015 Lease Gebhard BMW 2015 66 Peter Bernard Both FL 2015 Lease Ferman BMW August 31, 2015 67 Lawrence Curcio Both FL 2015 Lease Ft. Lauderdale BMW November 7, 2015 68 Naveen Parmeshwar SC, GA 2015 Purchase Critz Car Dealership March 28, 2016 69 Adeel Siddiqui Both IL 2015 Lease Elmhurst BMW December 6, 2015 70 Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 13 of 32 Page ID #:720 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 4813-4318-1629.10 6 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Charles Olsen IL, MI 2014 Purchase Sharp BMW August 12, 2014 71 Robert Desatnik Both OH 2015 Purchase Classic BMW May 2015 72 Eric Wonderly Both TN 2014 Lease Grayson BMW October 2014 73 John Lingsweiler Both TX 2015 Lease BMW of Brazos Valley February 15, 2016 74 Steve Ridges ID, UT 2015 Lease BMW of Pleasant Grove July 31, 2015 75 Brandon Redmond ID, WA 2015 Lease Unknown June 2015 76 On the basis of these allegations and others, plaintiffs assert a putative nationwide class claim for violation of the Magnuson-Moss Warranty Act (15 U.S.C. § 2301 et seq.). Plaintiffs also assert forty other claims on behalf of the various subclasses for: (1) fraud by concealment, (2) breach of contract, (3) unjust enrichment, (4) violation of California’s Unfair Competition Law (Cal. Bus. & Prof. Code § 17200 et seq.) (“UCL”), (5) violation of California’s Consumers Legal Remedies Act (Cal. Civ. Code § 1750 et seq.) (“CLRA”), (6) violation of California’s False Advertising Law (Cal. Bus. & Prof. Code § 17500 et seq.) (“FAL”), (7) breach of implied warranty of merchantability (Cal. Com. Code § 2314), (8) breach of implied warranty of merchantability under the Song-Beverly Act (Cal. Civ. Code §§ 1791.1 & 1792), (9) exemplary damages (Cal. Civ. Code § 3294), (10) violations of the Colorado Consumer Protection Act (Colo. Rev. Stat. § 6-1-101 et seq.), (11) breach of express warranty (Colo. Rev. Stat. § 4-2-313), (12) breach of implied warranty of merchantability (Colo. Rev. Stat. § 4-2-314), (13) violation of Florida’s Unfair & Deceptive Trade Practices Act (Fla. Stat. § 501.201 et seq.), (14) breach of express warranty (Fla. Stat. § 672.313), (15) breach of implied warranty of merchantability (Fla. Stat. § 672.314), (16) violation of Georgia’s Fair Business Practices Act (Ga. Code Ann. § 10-1-390 et seq.), (17) Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 14 of 32 Page ID #:721 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 4813-4318-1629.10 7 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW violation of Georgia’s Uniform Deceptive Trade Practices Act (Ga. Code Ann. § 10-1- 370 et seq.), (18) breach of express warranty (Ga. Code Ann. § 11-2-313), (19) breach of implied warranty of merchantability (Ga. Code Ann. § 11-2-314), (20) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. & 720 ILCS 295/1A), (21) breach of express warranty (810 Ill. Comp. Stat 5/2- 313), (22) breach of implied warranty of merchantability (810 Ill. Comp. Stat. 5/2-314 & 5/2A-212), (23) violation of the Michigan Consumer Protection Act (Mich. Comp. Laws § 445.903 et seq.), (24) breach of express warranty (M.C.L.A. 440.2313 and 440.2860), (25) breach of implied warranty of merchantability (Mich. Comp. Laws § 440.2314), (26) violations of the Consumer Sales Practices Act (Ohio Rev. Code § 1345.01 et seq.), (27) breach of express warranty (Ohio Rev. Code § 1302.26 (U.C.C. § 2-313)), (28) breach of implied warranty of merchantability (Ohio Rev. Code § 1302.27 (U.C.C. § 2-314)), (29) violation of Tennessee Consumer Protection Act (Tenn. Code § 47-18-101 et seq.), (30) breach of express warranty (Tenn. Code § 47-2-313), (31) breach of implied warranty of merchantability (Tenn. Code § 47-2-314), (32) violations of the Deceptive Trade Practices Act (Tex. Bus. & Com. Code § 17.41 et seq.), (33) breach of express warranty (Tex. Bus. & Com. Code § 2.313), (34) breach of implied warranty of merchantability (Tex. Bus. & Com. Code § 2.314), (35) violation of Utah Consumer Sales Practices Act (Utah Code Ann. § 13-11-1 et seq.), (36) breach of express warranty (Utah Code Ann. § 70A-2-313), (37) breach of implied warranty of merchantability (Utah Code Ann. § 70A-2-314), (38) violation of the Washington Consumer Protection Act (Wash. Rev. Code § 19.86.010 et seq.), (39) breach of express warranty (Wash. Rev. Code § 62A.2-313), and (40) breach of implied warranty of merchantability (Wash. Rev. Code § 62A.2-614). Prior to filing this motion, counsel for BMW NA sent a lengthy meet and confer letter that outlined, with appropriate case law references, the various pleading defects BMW NA intended to highlight in this motion. A true and correct copy of this letter is attached as Exhibit A to this motion. The parties had a telephonic meet and confer Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 15 of 32 Page ID #:722 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 4813-4318-1629.10 8 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW discussion on November 21, 2016.4 As a result of this effort, plaintiffs have withdrawn (1) all breach of contract claims in the Complaint;5 (2) the breach of express warranty claims of Florida plaintiffs Peter Bernard and Lawrence Curcio, Georgia plaintiff Naveen Parmeshwar, Michigan plaintiff Charles Olsen, Tennessee plaintiff Eric Wonderly, Texas plaintiff John Lingsweiler, and Washington plaintiff Brandon Redmond,6 and (3) the unjust enrichment claim under Texas law.7 A true and correct copy of the email from plaintiffs’ counsel confirming this is attached as Exhibit B hereto. III. PLAINTIFFS HAVE NOT ALLEGED FACTS TO ESTABLISH ARTICLE III STANDING. There are 17 total plaintiffs in this lawsuit, 14 of which are lessees.8 Every plaintiff summarily claims to have sustained “out-of-pocket losses, future attempted repairs, loss of warranty value, and diminished value” without any further factual explanation. Comp. ¶¶ 60-76. Plaintiffs further claim, again without factual support, the subject vehicles have “substantial diminution in value” (id. ¶¶ 11, 51), and a sticker price upcharge of $3,850 for the range extender option. Id. ¶¶ 4, 49, 50. Finally, plaintiffs claim they “purchased” cars with financing and the alleged “drop in value” in the subject vehicles has caused the “financing to be underwater.” Id. ¶¶ 53, 54. These summary claims of injury do not confer Article III standing. 4 The parties could not meet and confer in person because lead counsel for plaintiffs is located out-of-state. 5 Complaint Counts B-VII, C-V, D-V, E-VI, F-V, G-V, H-V, I-V, J-V, K-V, L-V. 6 Complaint Counts D-III, E-IV, G-III, I-III, J-III, L-III. 7 Complaint Count J-VI. 8 The remaining three plaintiffs-Parmeshwar, Olsen, and Desatnik-first allege they purchased their vehicles but later in the same paragraph inconsistently claim they “leased the vehicle on the reasonable, but mistaken, belief that the Range Extender extended the normal performance of the vehicle to 150 miles.” Comp. ¶¶ 69, 71, 72. Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 16 of 32 Page ID #:723 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 4813-4318-1629.10 9 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW First, it is settled in the automotive context that plaintiffs cannot establish Article III standing with “conclusory allegations that [they] overpaid for” a vehicle because of an alleged defect. Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962, 973 (C.D. Cal. 2014). As several district courts in this Circuit have explained, “[i]n cases such as this one, where the alleged wrong stems from the assertion of insufficient performance of a product or its features, a plaintiff must allege ‘something more’ than ‘overpaying for a ‘defective’ product’ to support a claim.” Id. (quoting In re Toyota Motor Corp., 790 F. Supp. 2d 1152, 1166 n.11 (C.D. Cal. 2011)). Yet that is all plaintiffs offer through their conclusory claims of “diminished” fair market value. Indeed, every plaintiff only makes the same vague claim of injury and alleges “out-of- pocket losses, future attempted repairs, loss of warranty value, and diminished value.” Comp. ¶¶ 60-76. This is a classic example of “simply alleging an overpayment for a ‘defective’ product.” In re Toyota, 790 F. Supp. 2d at 1166 n.11. Indeed, it seems highly implausible that all seventeen plaintiffs sustained the exact same injury of “out- of-pocket losses, future attempted repairs, loss of warranty value, and diminished value.” Second, although plaintiffs claim BMW charges a “premium of $3,850 for an i3 equipped with a REx engine over the base price of the BMW i3 purely electric model” (Comp. ¶ 4), not a single plaintiff who purchased the subject vehicle claims to have paid this amount for the Range Extender option. This allegation is particularly irrelevant to the fourteen plaintiffs who leased their vehicles because plaintiffs allege the “premium” that is identified in the Complaint is for the purchase of a car with the range extender option. And in any event, the Complaint does not contain any facts that show how lease payments of any lessee plaintiff were affected, if at all, as a result of this option. Third, the diminished value claims for both the purchasers and lessees are inadequate. As to the purchasers, the diminished value allegations lack merit where there are no facts suggesting plaintiffs actually tried to sell their vehicles. In re Toyota Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 17 of 32 Page ID #:724 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 4813-4318-1629.10 10 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prods. Liab. Litig., 754 F. Supp. 2d 1145, 1166 (C.D. Cal. 2010) (plaintiffs need to “allege a tangible loss that can be proved or disproved upon discovery” such as “that they sold or traded in their vehicles at a loss owing to the alleged [] defect”) (emphasis added); Barakezyan v. BMW of N. Am., LLC, 2016 U.S. Dist. LEXIS 68839, at *13 (C.D. Cal. Apr. 7, 2016) (holding that “Plaintiff does not allege that … he is unwilling to drive his vehicle; that he sold or traded-in his vehicle at a loss; or any other facts that plausibly demonstrate any diminished value in his vehicle. Therefore, Plaintiff has failed to plead the required ‘something more’ than alleged diminished value’”) (emphasis added). The fourteen lessee plaintiffs can never credibly make a diminished value claim even with additional facts because these plaintiffs do not own the subject vehicles. When the lease expires, the vehicles will be returned to BMW. The lessees cannot assert a claim of injury on the basis of the alleged “diminished value” of vehicles that are not theirs to sell. Copelan v. Infinity Ins. Co., 2016 U.S. Dist. LEXIS 82847, at *6 (C.D. Cal. June 14, 2016) (holding that a plaintiff who “leased the subject vehicle … does not have standing to pursue a diminished value claim” and the mere fact that the plaintiff “had the option to purchase the vehicle and could have chosen to resell it falls short of a concrete injury-in-fact sufficient to support Article III standing”). This is why courts recognize that when a plaintiff’s “car was leased, not owned, ‘there is no way in which [plaintiff] suffered any financial loss … due to diminished value.’” Heaphy v. State Farm Mut. Auto. Ins. Co., 2005 U.S. Dist. LEXIS 25650, at *5 (W.D. Wash. Oct. 12, 2005). Finally, plaintiffs cannot assert standing on the basis of their claim for injunctive relief. Comp. ¶¶ 12, 501. Plaintiffs do not allege facts that show they are “realistically threatened by a repetition of the violation.” Armstrong v. Davis, 275 F.3d 849, 860-61 (9th Cir. 2001); Rahman v. Mott’s LLP, 2014 U.S. Dist. LEXIS 11767, *10 (N.D. Cal. Jan. 29, 2014) (“to establish standing [for injunctive relief], plaintiff must allege that he intends to purchase the products at issue in the future”). Even if plaintiffs could Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 18 of 32 Page ID #:725 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 4813-4318-1629.10 11 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW demonstrate this, plaintiffs cannot plausibly show that they are likely to be fraudulently induced by the same representations they now claim are false. See, e.g., Ham v. Hain Celestial Grp., Inc., 70 F. Supp. 3d 1188, 1196 (N.D. Cal. Oct. 3, 2014). IV. PLAINTIFFS’ EXPRESS WARRANTY CLAIMS FAIL FOR NUMEROUS REASONS. Plaintiffs’ express warranty claims, under the laws of various states that have adopted some iteration of the U.C.C. § 2-313,9 each fail because (1) BMW NA’s warranty covering “defects in materials and workmanship” is not triggered, much less breached, by plaintiffs’ design defect claims, and (2) any warranty that was created by advertising statement relates to the subject vehicles’ 150-mile maximum range, which plaintiffs do not and cannot credibly claim the vehicles do not attain. A. BMW NA’s Warranty Covering “Defects in Materials or Workmanship” Is Not Triggered, Much Less Breached, by Plaintiffs’ Design Defect Claims. There are generally two distinct categories of product defects: manufacturing defects (materials and workmanship) and design defects. “‘[A manufacturing] defect is often demonstrated by showing the product performed differently from other ostensibly identical units of the same product line….’” Sater v. Chrysler Grp. LLC, 2015 U.S. Dist. LEXIS 21022, at *12 (C.D. Cal. Feb. 20, 2015) (quoting McCabe v. Am. Honda Motor Co., 100 Cal. App. 4th 1111, 1120 (2002)). “‘A design defect, in contrast, exists when the product is built in accordance with its intended specifications, but the design itself is inherently defective.’” Id. (emphasis added). BMW NA’s New Vehicle Limited Warranty (NVLW) only covers “defect[s] in materials or workmanship” for a period of four years or 50,000 miles, whichever comes first. Comp. ¶¶ 232, 304, 376, 448, 520, 587, 659, 734, 807, 881. Plaintiffs, however, assert a design defect claim. See, e.g., Comp ¶ 23 (“when designing the REx feature on 9 Comp. ¶¶ 229-43, 301-15, 373-87, 445-59, 517-31, 584-98, 656-70, 731-45, 803-19, 878-92. Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 19 of 32 Page ID #:726 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 4813-4318-1629.10 12 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW the i3…”) (emphasis added); id. ¶ 108 (“[t]he Affected Vehicles share a common design defect…”) (emphasis added); id. ¶ 111 (“BMW… failed to rectify the situation and/or disclose the defective design”) (emphasis added); id. ¶ 118(a) (“the Affected Vehicles suffer from a design defect…”) (emphasis added). Indeed, although plaintiffs sprinkle the complaint with conclusory “materials and workmanship” verbiage, plaintiffs allege all BMW i3 vehicles with Range Extenders are “inherently defective.” Id. ¶¶ 11, 164, 247, 319, 391, 463, 535, 602, 674, 749, 823, 896 (emphasis added). Where a defect is alleged to extend to all class vehicles, “not merely the particular vehicle owned by the [plaintiffs],” the claim “concerns an alleged defect in design Gertz v. Toyota Motor Corp., 2011 U.S. Dist. LEXIS 94183, at *10 (C.D. Cal. Aug. 22, 2011). As such, the NVLW is not even triggered, much less breached by plaintiffs’ design defect allegations. See, e.g., Barakezyan, 2016 U.S. Dist. LEXIS 68839, at *19- 21; Clark v. LG Elecs. U.S.A., Inc., 2013 U.S. Dist. LEXIS 155179, at *19-21 (S.D. Cal. Oct. 29, 2013) (dismissing plaintiff’s express warranty claim without leave because “irrespective of whether a manufacturer has responded appropriately under the warranty, ‘an express warranty covering materials and workmanship does not include design defects’”) (citations omitted).10 Courts in other states implicated by plaintiffs’ express warranty claims have come to the same conclusion.11 10 See also, e.g., Troup v. Toyota Motor Corp., 545 F. App’x 668, 668 (9th Cir. 2013) (holding that the district court “properly dismissed the [plaintiffs’] claim predicated on breach of an express warranty [because] [t]he Toyota Prius’s alleged design defect does not fall within the scope of Toyota’s Basic Warranty against ‘defects in materials or workmanship’” and “[i]n California, express warranties covering defects in materials and workmanship exclude defects in design”); Brothers v. Hewlett-Packard Co., 2007 U.S. Dist. LEXIS 13155, at *4 (N.D. Cal. Feb. 12, 2007) (“the Limited Warranty does not guarantee against design defects, it guarantees against defects in materials and workmanship”). 11 Whitt v. Mazda Motor of Am., Inc., 2011 Ohio App. LEXIS 2619, at *8 (Ct. App. 2011) (affirming the trial court’s holding that the vehicle warranty provided against “defects in material or workmanship” and “did not cover claims of design defects”); (footnote continued) Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 20 of 32 Page ID #:727 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 4813-4318-1629.10 13 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW In short, BMW NA could not have breached a warranty that does not cover the type of defect plaintiffs identify in this lawsuit. All of their express warranty claims must be dismissed (Counts C-III, D-III, E-IV, F-III, G-III, H-III, I-III, J-III, K-III, L- III). B. Plaintiffs Have Not Alleged a Breach of a Warranty That May Have Been Created by Representations. Plaintiffs fare no better with their warranty by representation claims. Plaintiffs allege they leased or purchased i3 REx vehicles “because of its claimed range of 150 miles” after reviewing “BMW’s website” and/or speaking “with authorized BMW dealer representatives.” Comp. ¶ 60-76. Plaintiffs further allege through these contacts, BMW NA warranted “the REx feature extended the range of the i3 to 150 miles.” See id. It does, and plaintiffs do not contend otherwise. This lawsuit is not about the vehicles’ range. Instead, plaintiffs claim their vehicles may go into a so-called “limp mode” under certain driving conditions, which can affect the vehicles’ speed and performance. Comp. ¶¶ 34-35. This alleged driving condition does not in any way contradict the representation that BMW i3 vehicles with the REx feature have a range of up to 150 miles. Murray v. Elations Co., LLC, 2014 U.S. Dist. LEXIS 107721, at *33-34 (S.D. Cal. Aug. 4, 2014) (holding that “to plead a breach of express warranty, Plaintiff must allege sufficient facts showing that Defendants’ representations are false”). Even with limited speeds, plaintiffs nowhere Orthoflex, Inc. v. Thermotek, Inc., 2013 U.S. Dist. LEXIS 112865, at *29 (N.D. Tex. Aug. 9, 2013) (holding that defendant “correctly argues that it warranted that its products would be free from defects in material and workmanship… [which] does not cover design defects”); GT & MC, Inc. v. Tex. City Ref., Inc., 822 S.W.2d 252, 257 (Tex. App. 1991) (an agreement that expressly limits a party’s recovery for defects in materials or workmanship does not include design defects where there is no mention of such defects in the agreement); McLaughlin v. Monaco RV LLC, 2015 U.S. Dist. LEXIS 122072, at *11 (M.D. Fla. Sep. 14, 2015) (warranty for defects in materials or workmanship excludes claims in which consumers are unhappy with the product’s design). Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 21 of 32 Page ID #:728 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 4813-4318-1629.10 14 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW allege the subject vehicles do not reach the promised maximum driving range. Shein v. Canon U.S.A., Inc., is instructive here. 2009 U.S. Dist. LEXIS 131519 (C.D. Cal. June 22, 2009). Shein focused on statements on packaging and labels of ink cartridges which stated “the ink cartridges contained certain amounts of ink in them.” Id. at *6-7. Plaintiffs alleged Canon breached this warranty because the printers displayed warning messages that warned about low ink levels, warned that printing with an empty cartridge will damage the printer, and effectively forced the plaintiffs to prematurely replace ink cartridge and precluded plaintiffs from using all the ink in the cartridges. Id. at *2-4, 6-11. Canon argued plaintiffs “do not allege that the ink cartridges did not contain the volume of ink represented on the packaging” and “because the packaging accurately states the amount of ink in the cartridges, there is no false statement to support a claim of breach of express warranty.” Id. at *7. The court agreed because “[e]ven if the statements on the replacement cartridges are warranties that could form the basis for a breach of warranty claim, plaintiffs have failed to allege that any statement made on the packaging or labels of the ink cartridges is inaccurate.” Id. at *11. The same logic applies here. Plaintiffs’ claim here is their vehicles allegedly go into “limp mode” when the Range Extender is activated, which affects vehicle performance and limits vehicle speed. Comp. ¶¶ 34-35. Plaintiffs nowhere claim their vehicles cannot travel up to 150 miles combined between electric mode and Range Extender mode driving. Thus, plaintiffs have failed to allege any statement that created a warranty is false. See Murray, 2014 U.S. Dist. LEXIS 107721, at *33-34. Counts C- III, D-III, E-IV, F-III, G-III, H-III, I-III, J-III, K-III, and L-III must all be dismissed. V. PLAINTIFFS’ IMPLIED WARRANTY CLAIMS ALSO FAIL. A. Plaintiffs Lack Privity With BMW NA Which Bars Their Implied Warranty Claims in Most States. Plaintiffs’ breach of implied warranty claims under California, Florida, Georgia, Illinois, Ohio, Tennessee, Utah, and Washington law fail because these states each Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 22 of 32 Page ID #:729 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 4813-4318-1629.10 15 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW require privity to assert a breach of implied warranty claim, as follows: • California (Count B-V). “In general, privity of contract is required in an action for breach of express warranty and breach of implied warranty. There ‘is no privity between the original seller and a subsequent purchaser who is in no way a party to the original sale.’” Tapia v. Davol, Inc., 116 F. Supp. 3d 1149, 1159 (S.D. Cal. 2015). “Privity of contract is a prerequisite in California for recovery on a theory of breach of implied warranties of fitness and merchantability.” Blanco v. Baxter Healthcare Corp., 158 Cal. App. 4th 1039, 1058 (2008). “‘[P]rivity of contract’ (i.e., direct sale from defendant to plaintiff) remains a requirement for implied warranty liability in substantially all American jurisdictions.” Gottsdanker v. Cutter Labs., 182 Cal. App. 2d 602, 606 (1960). • Florida (Count D-IV). “In Florida, implied warranty claims require privity between the plaintiff and the defendant. Privity is required even if suit is brought against a manufacturer. A plaintiff who purchases a product, but does not buy it directly from the defendant, is not in privity with that defendant.” Tolliver v. Monaco Coach Corp., 2006 U.S. Dist. LEXIS 40007, at *4 (M.D. Fla. June 16, 2006) (citations omitted). “Under Florida law, a plaintiff cannot recover economic losses for breach of implied warranty in the absence of privity.” Mesa v. BMW of N. Am., LLC, 904 So. 2d 450, 458 (Fla. Dist. Ct. App. 2005). • Georgia (Count E-V). “‘Georgia law establishes that in order to recover under a theory of breach of implied warranty of merchantability, a plaintiff must have privity with the seller.’” Monticello v. Winnebago Indus., 369 F. Supp. 2d 1350, 1361 (N.D. Ga. 2005) (citations omitted). “[W]hen a buyer purchases a product from a retailer, and there is no privity of contract between the manufacturer and the buyer, no implied warranty runs from the manufacturer to the purchaser.” McQueen v. Minolta Bus. Sols., Inc., 275 Ga. App. 297, 300 (2005). • Illinois (Count F-IV). “In order for a plaintiff to file a claim for economic damages under the Uniform Commercial Code … for the breach of an implied Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 23 of 32 Page ID #:730 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 4813-4318-1629.10 16 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW warranty, he or she must be in vertical privity of contract with the seller.” Jensen v. Bayer AG, 371 Ill. App. 3d 682, 690-91 (2007) (citations omitted). “‘[P]rivity of contract is a prerequisite to recover economic damages for breach of implied warranty’ under Illinois law.” Caterpillar, Inc. v. Usinor Industeel, 393 F. Supp. 2d 659, 678 (N.D. Ill. 2005) (citations omitted). • Ohio (Count H-IV). “Ohio law requires privity in order to sustain a contract-based breach of implied warranty claim.” Risner v. Regal Marine Indus., 8 F. Supp. 3d 959, 994 (S.D. Ohio 2014). “Ohio law provides: ‘to support an implied warranty there must be privity between the buyer and the seller.’” Hahn v. Jennings, 2004 Ohio App. LEXIS 4320, at *4 (Ct. App. 2004) (citations omitted). “[W]ithout the benefit of a sales contract directly with [the manufacturer], [plaintiffs] are precluded from raising claims founded on UCC implied warranty theories for want of privity.” Johnson v. Monsanto Co., 2002 Ohio App. LEXIS 4740, at *8 (Ct. App. 2002). • Tennessee (Count I-IV). “The Court has found no opinion in which a Tennessee court has held that in the absence of privity a plaintiff could bring a claim for breach of an implied warranty to recover only economic damages…” Americoach Tours v. Detroit Diesel Corp., 2005 U.S. Dist. LEXIS 40182, at *25 (W.D. Tenn. Sep. 23, 2005). “[T]here is no implied warranty where there is no privity of contract, and [] there is no implied warranty of fitness running with a product from the manufacturer to the consumer.” Olney v. Beaman Bottling Co., 220 Tenn. 459, 462 (1967). • Utah (Count K-IV). “Privity of contract is required to bring a claim for breach of the implied warranty.” Davencourt at Pilgrims Landing Homeowners Ass’n v. Davencourt at Pilgrims Landing, LC, 221 P.3d 234, 252 (Utah 2009). • Washington (Count L-IV). “Contractual privity between the parties is required to establish a claim for breach of implied warranty.” Afoa v. China Airlines Ltd., 2013 U.S. Dist. LEXIS 93816, at *6 (W.D. Wash. July 3, 2013). “Privity is [] required for a breach of an implied warranty claim.” Thongchoom v. Graco, 117 Wash. App. 299, 307 (2003). Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 24 of 32 Page ID #:731 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 4813-4318-1629.10 17 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Privity is met where BMW NA and plaintiffs are “in adjoining links of the distribution chain.” Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir. 2008) (“an end consumer such as [plaintiff] who buys from a retailer is not in privity with a manufacturer”). Plaintiffs can never satisfy this requirement here because they each purchased or leased a putative class vehicle from a third-party dealership, not BMW NA. Comp. ¶¶ 60-76. Their summary claims of privity, devoid of factual support, do not defeat their admission that they are not in “adjoining links of the distribution chain” with BMW NA. Comp. ¶ 109, 249, 321, 393, 465, 604, 676, 898. Thus, their implied warranty claims fail. See, e.g., Annunziato v. eMachines, Inc., 402 F. Supp. 2d 1133, 1141 (C.D. Cal. 2005) (citations omitted) (dismissing plaintiff’s breach of implied warranty claim because he purchased his laptop from retailer BestBuy.com and not directly from defendant eMachines). B. Plaintiffs Have Not Plead Any Facts To Demonstrate Third-Party Beneficiary Status. Plaintiffs cannot salvage their deficient implied warranty claims by summarily proclaiming that “privity is not required here because Plaintiffs and each of the other Class members are intended third-party beneficiaries of contracts between BMW and its dealers.” Comp. ¶¶ 109, 249, 321, 393, 465, 604, 676, 898. First, even if plaintiffs’ third-party beneficiary claims were not conclusory, their implied warranty claims would still fail. The viability of the third-party beneficiary exception to the privity requirement for implied warranty claims is questionable under California law after Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008). Kirsopp v. Yamaha Motor Co., 2015 U.S. Dist. LEXIS 68639, at *16-20 (C.D. Cal. Jan. 7, 2015) (questioning (without deciding) whether the “third-party-beneficiary exception necessarily remains viable in California following Clemens”). Several other states at issue have affirmatively rejected a third-party beneficiary exception to the privity requirement. See, e.g., Barnett v. Leiserv, Inc., 968 F. Supp. 690, 695 (N.D. Ga. 1997) (“In the absence of privity between Plaintiff and Defendant… the court does not agree Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 25 of 32 Page ID #:732 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 4813-4318-1629.10 18 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW that the [third-party beneficiary] exception applies”) (Georgia); Savett v. Whirlpool Corp., 2012 U.S. Dist. LEXIS 124086, at *30 (N.D. Ohio Aug. 31, 2012) (holding that “Ohio law requires privity in order to sustain a breach of implied warranty claim” and rejecting plaintiff’s argument that privity is not required because “he was an intended third-party beneficiary to the contract between Home Depot and Whirlpool”) (Ohio); McIntosh v. Wiley, 2006 U.S. Dist. LEXIS 89589, at *9 (S.D. Tex. Dec. 11, 2006) (rejecting the third-party beneficiary exception to the privity rule because that would mean “that any party in the downstream of commerce could bring a breach of contract claim against manufacturers and wholesale distributors with which they have no real relationship, merely [by] arguing that the plaintiffs consumption of the given product ‘benefits’ her in some vague and tenuous sense”) (Texas). Several other states such as Colorado, Michigan, Tennessee, and Utah have not, to BMW NA’s knowledge, addressed the issue.12 Even assuming such an exception can apply, plaintiffs have not alleged facts to support a third party beneficiary claim. Plaintiffs merely conclude they are “intended third-party beneficiaries of contracts between BMW and its dealers” (Comp. ¶¶ 109, 249, 321, 393, 465, 604, 676, 898), but do not provide “specific allegations identifying or describing the agreements under which Plaintiffs claim third party beneficiary 12 Florida, Illinois, and Washington recognize a third-party beneficiary exception to the privity requirement. Traxler v. PPG Indus., 158 F. Supp. 3d 607, 626 (N.D. Ohio 2016) (“The Supreme Court of Washington has carved out a third-party beneficiary exception to the general rule that a vertical non-privity plaintiff cannot recover from a remote manufacturer for breach of implied warranty”); Hemphill v. Sayers, 552 F. Supp. 685, 691 (S.D. Ill. 1982) (an exception to the privity requirement in warranty actions includes “a plaintiff standing in a third-party beneficiary relationship to the seller's sales contract”); Sanchez-Knutson v. Ford Motor Co., 52 F. Supp. 3d 1223, 1233-34 (S.D. Fla. 2014) (denying Ford’s motion to dismiss plaintiff’s implied warranty claim due to lack of privity and holding that “[p]laintiff can pursue a claim of breach of implied warranty through third-party beneficiary law”). But as stated herein, plaintiffs have not alleged facts to establish the third-party beneficiary exception could plausibly apply here. Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 26 of 32 Page ID #:733 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 4813-4318-1629.10 19 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW status.” Kirsopp, 2015 U.S. Dist. LEXIS 68639, at *19 (citations omitted). A plaintiff seeking to enforce a contract as a third-party beneficiary “must plead a contract which was made expressly for his or her benefit and one in which it clearly appears that he or she was a beneficiary.” Pershing Pac. W., LLC v. Ferretti Grp., USA, Inc., 2013 U.S. Dist. LEXIS 9851, at *20 (S.D. Cal. Jan. 24, 2013) (emphasis added). Plaintiffs fail to plead such facts. Their conclusory third-party beneficiary claim based on unidentified contracts between BMW NA and its dealers-which can only be franchise agreements here-do not rise to the level of pleading “specific allegations identifying or describing the agreements under which” plaintiffs claim third-party beneficiary status. Id. at *19; Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (a claim is plausible on its face “when the plaintiff pleads factual content that allows the court to draw [] reasonable inference[s]…”). Counts B-V, D-IV, E-V, F-IV, H-IV, I-IV, K-IV, and L-IV must be dismissed. VI. PLAINTIFFS’ NATIONWIDE MAGNUSON-MOSS CLAIM FAILS BECAUSE THEIR STATE LAW WARRANTY CLAIMS FAIL. The Magnuson-Moss Act does not create a new substantive body of federal warranty law. It only “supplement[s] state warranty law by prescribing certain minimum standards for warrantors, and by affording consumers additional avenues for redress.” Walsh v. Ford Motor Co., 807 F.2d 1000, 1012 (D.C. Cir. 1986). Indeed, “except in the specific instances in which Magnuson-Moss expressly prescribes a regulating rule, the Act calls for the application of state written … warranty law …” Id. Thus, the “failure to state a warranty claim under state law necessarily constitute[s] a failure to state a claim under Magnuson-Moss.” Daugherty v. Am. Honda Motor Co., 144 Cal. App. 4th 824, 833 (2006). As detailed herein, plaintiffs have not alleged any viable express claim and several of their implied warranty claims also are deficient. Thus, their nationwide Magnuson-Moss claim must also be dismissed. // // Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 27 of 32 Page ID #:734 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 4813-4318-1629.10 20 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW VII. PLAINTIFFS’ UNJUST ENRICHMENT CLAIMS MUST BE DISMISSED BECAUSE PLAINTIFFS ALREADY HAVE AN ADEQUATE REMEDY AT LAW. With the exception of the California plaintiffs, the remaining eleven named plaintiffs from Colorado, Florida, Georgia, Illinois, Michigan, Ohio, Tennessee, Texas,13 Utah, and Washington each assert an unjust enrichment claim against BMW NA. Comp. ¶¶ 256-64, 328-36, 400-08, 472-80, 543-51, 611-19, 683-91, 757-65, 831- 39, 905-13. But an unjust enrichment claim is unavailable to a plaintiff who already has an adequate remedy at law, as noted in the following decisions from the various states implicated by plaintiffs’ claims: • Colorado (Count C-VI). “Equity may not be used to fashion relief when there is a ‘plain, speedy, adequate remedy at law.’” Harris Grp. v. Robinson, 209 P.3d 1188, 1205 (Colo. App. 2009). For example, in Francis v. Mead Johnson & Co., the district court held that “[a]lthough Plaintiff has adequately pled the elements of her unjust enrichment claim, it must be dismissed because the [Colorado Consumer Protection Act] provides an adequate legal remedy.” 2010 U.S. Dist. LEXIS 137630, at *27-28 (D. Colo. Dec. 17, 2010). • Florida (Count D-VI). “It is well settled in Florida that unjust enrichment is an equitable remedy and is, therefore, not available where there is an adequate legal remedy. Thus, to properly state a claim for unjust enrichment, a party must allege that no adequate legal remedy exists.” Am. Honda Motor Co. v. Motorcycle Info. Network, Inc., 390 F. Supp. 2d 1170, 1178 (M.D. Fla. 2005). • Georgia (Count E-VII). “‘Equity will grant relief only where there is no available adequate and complete remedy at law’… and ‘[t]he availability of money damages affords … an adequate and complete remedy.…’” McGlashan v. Snowden, 292 Ga. 450, 451, 738 S.E.2d 619, 620 (2013) (citations omitted) (granting defendant’s 13 As noted above, after the parties’ meet-and-confer on November 21, 2016, plaintiffs’ counsel agreed to voluntarily dismiss the unjust enrichment claim on behalf of the Texas subclass. Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 28 of 32 Page ID #:735 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 4813-4318-1629.10 21 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW summary judgment motion as to plaintiff’s unjust enrichment claim). • Illinois (Count F-VI). “[B]ecause unjust enrichment is an equitable remedy, it is only available when there is no adequate remedy at law.” DigaComm, LLC v. Vehicle Safety & Compliance, LLC, 2009 U.S. Dist. LEXIS 15790, at *25 (N.D. Ill. Mar. 2, 2009). “It is axiomatic that an unjust enrichment claim is viable only when there is no adequate remedy at law.” Season Comfort Corp. v. Ben A. Borenstein Co., 281 Ill. App. 3d 648, 656 (1995). • Michigan (Count G-VI). Romeo Inv. v. Mich. Consol. Gas Co., 2007 Mich. App. LEXIS 1190, at *29 (Ct. App. May 1, 2007) (dismissing plaintiff’s unjust enrichment claim in its entirety and holding that “[w]hen a plaintiff has set forth both legal and equitable claims seeking identical relief and covering the same subject matter, the proper course is generally dismissal of the equitable claim”). See also Pacheco v. Boar’s Head Provisions Co., 2010 U.S. Dist. LEXIS 30463, at *13-14 (W.D. Mich. Mar. 30, 2010) (dismissing plaintiffs’ unjust enrichment claim and holding that “[a]lthough Michigan cases do not explicitly list the ‘nonexistence of any other remedy at law’ as an element of an unjust enrichment claim, Michigan cases have consistently held that ‘[e]quity will not take jurisdiction where there is a full, complete, and adequate remedy at law…’”) (citations omitted). • Ohio (Count H-VI). “A plaintiff is entitled to equitable relief only when there is no adequate legal remedy available.” Cerdant, Inc. v. DHL Express (USA), Inc., 2009 U.S. Dist. LEXIS 27070, at *16 (S.D. Ohio Mar. 30, 2009). • Tennessee (Count I-VI). Law v. Bioheart, Inc., 2009 U.S. Dist. LEXIS 21464, at *55-56 (W.D. Tenn. Mar. 13, 2009) (dismissing plaintiffs’ unjust enrichment claim and holding that “[p]laintiffs have made no showing of inequitable conduct or other wrongdoing by [defendant] leading to its being unjustly enriched. Nor have Plaintiffs shown an inadequate remedy at law justifying equitable remedies, including recovery under a theory of unjust enrichment or for an implied or quasi-contract”). • Utah (Count K-VI). “It is settled in Utah that ‘the law will not imply an Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 29 of 32 Page ID #:736 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 4813-4318-1629.10 22 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW equitable remedy when there is an adequate remedy at law….’ [Thus, where a legal remedy is available,] ‘the law will not imply the equitable remedy of unjust enrichment.’ Moreover … a plaintiff ‘must affirmatively show a lack of an adequate remedy at law on the face of the pleading.’” Thorpe v. Wash. City, 243 P.3d 500, 507 (Utah Ct. App. 2010) (citations omitted). • Washington (Count L-VI). Under Washington law, a claim for unjust enrichment is barred where the plaintiff has an adequate remedy at law. Seattle Prof’l Eng’g Emples. Ass’n v. Boeing Co., 139 Wash. 2d 824, 838 (2000). The case law in these states is clear: if a plaintiffs have an adequate legal remedy available, they cannot assert an equitable claim for unjust enrichment. Yet plaintiffs each plead an unjust enrichment claim concurrently with numerous other legal claims which, if successful, provide them with more than adequate legal relief. For example, while BMW NA challenges the sufficiency and plausibility of plaintiffs’ claims for breach of express warranty, this cause of action could-if sufficiently plead with facts-provide plaintiffs with an adequate legal remedy. Speier-Roche v. Volkswagen Grp. of Am., Inc., 2014 U.S. Dist. LEXIS 59991, at *25-26 (S.D. Fla. Apr. 30, 2014) (holding that “because there is an express warranty governing Plaintiff’s rights, her unjust enrichment claim must fail. Plaintiff’s failure to state a claim for breach of warranty does not save the unjust enrichment claim”) (citations omitted); see also David v. Am. Suzuki Motor Corp., 629 F. Supp. 2d 1309, 1324-25 (S.D. Fla. 2009) (dismissing unjust enrichment claim in suit for alleged defect in the frame of the motorcycle, which is also the basis of Plaintiff’s breach of express warranty claim, because “[t]he unjust enrichment claim arises out of Defendants’ alleged failure to perform under the warranty, and the damages pled under unjust enrichment are not distinct from those pled under express warranty” and concluding “[p]laintiff has available a contractual remedy through the breach of express warranty claim”). Plaintiffs cannot salvage their equitable unjust enrichment claims by arguing they are pled “in the alternative.” In re Porsche Cars N. Am., Inc. Plastic Coolant Tubes Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 30 of 32 Page ID #:737 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 4813-4318-1629.10 23 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Prods. Liab. Litig. (“PCNA”), 880 F. Supp. 2d 801, 847 (S.D. Ohio 2012) (“A plaintiff may bring an unjust enrichment claim in the alternative to a breach of contract claim if and only if the validity or existence of the subject contract is in dispute”) (emphasis added). Thus, in PCNA, the court held that the Georgia plaintiff failed to state a claim for unjust enrichment because a valid express warranty already governed the subject matter in dispute. Id. at 846-47. The court reasoned that the plaintiff “does not contend that the validity or existence of the [vehicle’s] express warranty, which defines [defendant’s] obligation to reimburse consumers for defective parts, is in dispute in this case.” Id. at 847. That plaintiff failed to allege an actionable breach of express warranty claim did not change the outcome. Id. at 818. The result was the same under Illinois law because the “Illinois Plaintiff does not dispute the fact that the 2004 Warranty covers the subject matter of his unjust enrichment claim.” Id. at 851. Thus, “[i]n determining whether a contract precludes an unjust enrichment claim, courts consider the subject matter of the contract and not the specific terms or provisions of that contract.” Id.14 Plaintiffs do not dispute the validity or existence of BMW NA’s written warranty. To the contrary, they expressly quote its terms and assert breach of warranty claims based on it. See Comp. ¶¶ 232, 304, 376, 448, 520, 587, 659, 734, 807, 881. Plaintiffs also assert several other claims under consumer protection and other laws that provide for adequate legal remedies if plaintiffs can satisfy their burden of establishing any law was violated. As such, plaintiffs cannot plead unjust enrichment claims concurrently (or in the alternative). Counts C-VI, D-VI , E-VII , F-VI , G-VI , H-VI , I- VI, J-VI , K-VI , L-VI must be dismissed. 14 The mere fact that BMW NA’s warranty only applies to defects in materials and workmanship and does not encompass design defect claims like plaintiffs’ does not compel a different outcome. See PCNA, 880 F. Supp. 2d at 851 (citing Ramirez v. Gen. Elec. Co., 2008 U.S. Dist. LEXIS 84178, at *1-2 (D. Conn. Oct. 20, 2008), wherein the “court rejected the plaintiff’s argument that the warranty did not apply to his claim for a design defect and stated the warranty ‘defined the relationship of the parties with respect to the subject matter on which the [unjust enrichment] claim rests’”). Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 31 of 32 Page ID #:738 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 4813-4318-1629.10 24 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW VIII. THE CALIFORNIA PLAINTIFFS’ “EXEMPLARY DAMAGES” CLAIM REQUIRES DISMISSAL BECAUSE IT IS NOT AN INDEPENDENT CAUSE OF ACTION. The California plaintiffs’ exemplary damages claim under Cal. Civ. Code § 3294 (Comp. ¶¶ 187-92) must be dismissed because “exemplary damages” are not an independent cause of action.15 Indeed, punitive damages “are merely incident to a cause of action, and can never constitute the basis thereof.” Orient Handel v. United States Fid. & Guar. Co., 192 Cal. App. 3d 684, 697 (1987) (citations omitted) (emphasis added); Davis v. Runnels, 2011 U.S. Dist. LEXIS 60680, at *6 n.2 (E.D. Cal. June 7, 2011) (Cal. Civ. Code § 3294 “does not provide an independent cause of action but rather provides the bases for imposition of exemplary damages”); see also, e.g., Arndell v. Robison, Belaustegui, Sharp & Low, 2012 U.S. Dist. LEXIS 126570, at *2 (D. Nev. Sep. 6, 2012) (dismissing plaintiffs’ claims and “requiring Plaintiffs to amend their Complaint … to treat exemplary damages as a form of relief, not a cause of action”). As such, plaintiffs’ stand-alone exemplary damages cause of action in count B-VIII must be dismissed. IX. CONCLUSION BMW NA respectfully requests that its motion be granted. Dated: November 28, 2016 LEWIS BRISBOIS BISGAARD & SMITH LLP By: Eric Y. Kizirian Attorneys for Defendant BMW of North America, LLC 15 While BMW NA vehemently denies any allegations the California plaintiffs make regarding BMW NA’s purported “intentional deception” (Comp. ¶ 192) or “knowing and malicious” conduct (id. ¶ 189), it reserves making any arguments directly addressing these accusations at a later stage should plaintiffs’ claims survive. Case 8:16-cv-00966-BRO-SS Document 47-1 Filed 11/28/16 Page 32 of 32 Page ID #:739 EXHIBIT A Case 8:16-cv-00966-BRO-SS Document 47-2 Filed 11/28/16 Page 1 of 7 Page ID #:740 4851-5167-7245.2 633 West 5th Street, Suite 4000 Los Angeles, California 90071 Telephone: 213.250.1800 Fax: 213.250.7900 www.lewisbrisbois.com ERIC Y. KIZIRIAN DIRECT DIAL: 213.580.3981 ERIC.KIZIRIAN@LEWISBRISBOIS.COM November 16, 2016 File No. 6002.1179 ARIZONA • CALIFORNIA • COLORADO • CONNECTICUT • FLORIDA • GEORGIA • ILLINOIS • INDIANA • KANSAS • KENTUCKY • LOUISIANA • MARYLAND • MASSACHUSETTS • MISSOURI • NEVADA • NEW JERSEY • NEW MEXICO • NEW YORK • NORTH CAROLINA • OHIO • OREGON • PENNSYLVANIA • RHODE ISLAND • TEXAS • WASHINGTON • WEST VIRGINIA VIA ELECTRONIC MAIL ONLY Jessica Thompson Hagens Berman Sobol Shapiro LLP 1918 Eight Avenue, Suite 3300 Seattle, WA 98101 E-Mail: jessicat@hbsslaw.com Re: BMW i3 REx Consolidated Complaint (L.R. 7-3 Meet and Confer) Rollolazo et al. v. BMW NA et al. (C.D. Cal. Case No. 16-cv-00966-BRO-SS) Dear Jessica: I am writing on behalf of BMW of North America, LLC (“BMW NA”) to inform you that BMW NA intends to file a Rule 12(b)(6) motion to dismiss challenging the adequacy of plaintiffs’ claims listed below as alleged in their Consolidated Class Action Complaint (“Complaint”). Pursuant to Local Rule 7-3, we request that plaintiffs agree to meet and confer regarding BMW NA’s anticipated motion. To ensure our meet and confer is productive, we provide the following details regarding the substantive issues in the Complaint that we intend to present in our anticipated motion. Lessee Standing on Basis of “Diminished Value”: Fourteen of the seventeen named plaintiffs are vehicle lessees. Although the subject vehicles are not theirs to sell, these fourteen lessee plaintiffs attempt to invoke standing on the basis of an alleged “diminished value” for their vehicles. These named plaintiffs who leased their vehicles have no Article III standing to pursue diminished value claims because they can never demonstrate a concrete injury-in-fact. See, e.g., Copelan v. Infinity Ins. Co., 2016 U.S. Dist. LEXIS 82847, at *6 (C.D. Cal. June 14, 2016). Their other allegations of standing are conclusory and cannot withstand scrutiny either. Exemplary Damages (Count B-VIII): This claim is improperly framed as a stand-alone cause of action when in fact it is “merely incident to a cause of action, and can never constitute the basis thereof.” Orient Handel v. U.S. Fid. & Guar. Co., 192 Cal. App. 3d 684, 697 (1987); See also Clark v. McClurg, 215 Cal. 279, 282 (1932) (same); Arndell v. Robison, Belaustegui, Sharp & Low, Case 8:16-cv-00966-BRO-SS Document 47-2 Filed 11/28/16 Page 2 of 7 Page ID #:741 Jessica Thompson November 16, 2016 Page 2 4851-5167-7245.2 LEWIS BRISBOIS BISGAARD & SMITH LLP • www.lewisbrisbois.com 2012 U.S. Dist. LEXIS 126570, at *2 (D. Nev. Sep. 6, 2012) (dismissing plaintiffs’ claims and “requiring Plaintiffs to amend their Complaint … to treat exemplary damages as a form of relief, not a cause of action”). Although we dispute the standard for exemplary damages could ever be satisfied in this case, at most this is a prayer for relief. Breach of Contract (Counts B-VII, C-V, D-V, E-VI, F-V, G-V, H-V, I-V, J-V, K-V, L- V): The allegation that “[e]ach and every sale or lease of an Affected Vehicle by an authorized BMW dealer constitutes a contract between BMW and the purchaser or lessee” (see, e.g. Comp. ¶ 254) is conclusory and insufficient to allege a contract was formed between the plaintiffs and BMW NA. If the actual contracts for the sale or lease of vehicles were attached to the Complaint (the Court can receive them as part of a judicial notice request in any event), it is clear there is no contract between BMW NA and plaintiffs. The contracts are between plaintiffs and the third-party dealers or the leasing entity. The Complaint includes no facts showing plaintiffs entered into valid, enforceable contracts with BMW NA. Also, plaintiffs fail to allege the exact terms of the claimed contracts or that they fulfilled each of their obligations under the contracts they allege form the basis for their breach of contract claims (as required by some states). To the extent plaintiffs believe a contract exists with BMW NA as a result of a sales transaction with a dealer, courts (including courts in the Central District) have recognized that dealers are not “agents” of a vehicle distributor like BMW NA. See, e.g., Herremans v. BMW of N. Am. LLC, 2014 U.S. Dist. LEXIS 145957, * 18 (C.D. Cal. Oct. 3, 2014) (dealers not agent of BMW and citing cases). On a state- specific level, plaintiffs’ breach of contract claims have numerous defects:  Colorado (Count C-V): “To prove breach of contract under Colorado Law, a plaintiff must show: (1) the defendant entered into an enforceable contract; (2) the plaintiff performed as required by the contract or was justified in not performing; (3) the defendant failed to perform the contract; and (4) damages resulted to the plaintiff.” Health Grades, Inc. v. Robert Wood Johnson Univ. Hosp., Inc., 634 F. Supp. 2d 1226, 1243 (D. Colo. 2009) (citing Western Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992)). “In order to establish the existence of a contract, the evidence must show that the parties agreed upon all essential terms.” Mott v. Narconon Fresh Start, 2015 U.S. Dist. LEXIS 32816, at *8 (D. Colo. Mar. 17, 2015) (citing I.M.A., Inc. v. Rocky Mountain Airways, Inc., 713 P.2d 882, 888 (Colo. 1986) (internal quotation marks omitted)).  Florida (Count D-V): “The elements of a breach of contract claim are straightforward: ‘(1) a valid contract; (2) a material breach; and (3) damages.’” Oginsky v. Paragon Props. Of Costa Rica LLC, 784 F. Supp. 2d 1353, 1371 (S.D. Fla. 2011). “Under Florida law, ‘a third-party [like BMW NA] cannot be bound by a contract to which it was not a party.’” Purifoy v. Walter Inv. Mgmt. Corp., 2015 U.S. Dist. LEXIS 170732, at *9 (S.D.N.Y. Dec. 21, 2015) (citing Miles v. Naval Aviation Museum Found., Inc., 289 F.3d 715, 720 (11th Cir. 2002)). “As a result, a plaintiff may not assert a breach of Case 8:16-cv-00966-BRO-SS Document 47-2 Filed 11/28/16 Page 3 of 7 Page ID #:742 Jessica Thompson November 16, 2016 Page 3 4851-5167-7245.2 LEWIS BRISBOIS BISGAARD & SMITH LLP • www.lewisbrisbois.com contract claim against a third party.” Id.; Norfolk S. Ry. Co. v. Groves, 586 F.3d 1273, 1282 (11th Cir. 2009) (“It goes without saying that a contract cannot bind a nonparty.”).  Georgia (Count E-VI): “‘The elements for a breach of contract claim in Georgia are the (1) breach and the (2) resultant damages (3) to the party who has the right to complain about the contract being broken. A breach occurs if a contracting party repudiates or renounces liability under the contract; fails to perform the engagement as specified in the contract; or does some act that renders performance impossible.’” Loncke v. Bank of Am., 2015 U.S. Dist. LEXIS 180382, at *50-51 (N.D. Ga. Jan. 16, 2015) (citations omitted). “Thus, ‘to assert a claim for breach of contract, the party against whom the claim is brought must have been a party to the contract.’” Benjamin v. Am. Airlines, Inc., 32 F. Supp. 3d 1309, 1318 (S.D. Ga. 2014) (emphasis added).  Illinois (Count F-V): “The required elements of a breach of contract claim in Illinois are the standard ones of common law: ‘(1) offer and acceptance, (2) consideration, (3) definite and certain terms, (4) performance by the plaintiff of all required conditions, (5) breach, and (6) damages.’” Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 560 (7th Cir. 2012) (citations omitted). “Under Illinois law, ‘consideration consists of some detriment to the offeror, some benefit to the offeree, or some bargained-for exchange between them.’” Id. (citations omitted).  Michigan (Count G-V): “To state a breach of contract claim against Defendant, Plaintiff must allege: (1) the existence of a contract between the parties, (2) the terms of the contract require performance of certain actions, (3) Defendant breached the contract, and (4) the breach caused the Plaintiff an injury. . . .” Groeb Farms, Inc. v. Alfred L. Wolff, Inc., 2009 U.S. Dist. LEXIS 15395, at *7-8 (E.D. Mich. Feb. 27, 2009). Plaintiffs have not pled facts to satisfy elements (1), (2), and (3); and because there was no contract with BMW NA, element (4) cannot be shown either.  Ohio (Count H-V): “Under Ohio law, to prove breach of contract, a plaintiff must demonstrate by a preponderance of evidence that: (1) a contract existed; (2) plaintiff fulfilled his obligations; (3) defendant failed to fulfill his obligations; and (4) damages resulted from this failure. . . . Therefore, the Court must first determine whether a contract existed and its essential terms.” Doe v. SexSearch, 502 F. Supp. 2d 719, 728-29 (N.D. Ohio 2007) (citations omitted). Plaintiffs have not pled facts to satisfy elements (1), (2), and (3); and because there was no contract with BMW NA, element (4) cannot be shown either.  Tennessee (Count I-V): “To state a claim for breach of contract under Tennessee law, the plaintiff must allege ‘(1) the existence of an enforceable contract, (2) non- performance amounting to a breach of the contract, and (3) damages caused by the breached contract.’” Quality Mfg. Sys. v. R/X Automation Sols., Inc., 2016 U.S. Dist. Case 8:16-cv-00966-BRO-SS Document 47-2 Filed 11/28/16 Page 4 of 7 Page ID #:743 Jessica Thompson November 16, 2016 Page 4 4851-5167-7245.2 LEWIS BRISBOIS BISGAARD & SMITH LLP • www.lewisbrisbois.com LEXIS 63743, at *44 (M.D. Tenn. May 13, 2016) (citations omitted). Plaintiffs have not pled facts to satisfy elements (1) and (2); and because there was no contract with BMW NA, element (3) cannot be shown either.  Texas (Count J-V): “To establish liability for breach of contract, [plaintiffs must] establish as a matter of law: (1) the existence of a valid contract; (2) performance or tendered performance by the claimant; (3) breach of the contract by the defendant; and (4) damages to the plaintiff resulting from that breach.” Pagosa Oil & Gas, L.L.C. v. Marrs & Smith P’ship, 323 S.W.3d 203, 214-15 (Tex. App. 2010). There is no cause of action where no contract was formed with defendant. See Whiddon v. Chase Home Fin., LLC, 666 F. Supp. 2d 681, 692 (E.D. Tex. 2009) (dismissing breach of contract claim because plaintiff “never alludes to the formation of any contract between [plaintiff and defendant] nor do the facts stated in his petition suggest that any of the elements required to create a binding contract are present.)  Utah (Count K-V): A prima facie breach of contract cases requires proof of (1) a contract, (2) performance by the party seeking recovery, (3) breach by the other party, and (4) damages. Whipple v. State, 2011 U.S. Dist. LEXIS 109630, at *50-51 (D. Utah Aug. 24, 2011) (citing Bair v. Axiom Design, LLC, 20 P.3d 388 (2001)). Here, the “complaint contains no facts establishing that Plaintiff had a contract with the [Defendants], and thus the complaint fails to establish that the [Defendants] breached a contract with Plaintiff.” Id. at *51.  Washington (Count L-V): “The elements of a breach of contract claim in Washington are: 1) the existence of a valid contract between the parties, 2) breach by the defendant, and 3) damages.” GMAC, LLC v. Hiatt Pontiac GMC Trucks, Inc., 2009 U.S. Dist. LEXIS 113456, at *29 (W.D. Wash. Dec. 7, 2009). No contract has been pled here with BMW NA, much less its breach. Hayes v. Deutsche Bank Nat’l Tr. Co., 2016 U.S. Dist. LEXIS 148452, at *5 (W.D. Wash. Oct. 26, 2016) (dismissing breach of contract claim because “[t]he Complaint alleges generally that Defendants ‘materially and substantially breached the written . . . terms . . . in the alleged note and/or Deed of Trust . . . to the detriment of Plaintiff,’ but the Complaint does not point to any specific terms breached by each defendant.”). Breach of Implied Warranty (Counts B-V, D-IV, E-V, F-IV, H-IV, I-IV, K-IV, L-IV): Several of the states in the Complaint require privity for an implied warranty of merchantability claim. Given that plaintiffs lack contractual privity with BMW NA, their implied warranty claims fail as follows:  California (Count B-V): Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir. 2008) (Under California law, “a plaintiff asserting breach of warranty claims must Case 8:16-cv-00966-BRO-SS Document 47-2 Filed 11/28/16 Page 5 of 7 Page ID #:744 Jessica Thompson November 16, 2016 Page 5 4851-5167-7245.2 LEWIS BRISBOIS BISGAARD & SMITH LLP • www.lewisbrisbois.com stand in vertical contractual privity with the defendant. A buyer and seller stand in privity if they are in adjoining links of the distribution chain.”).  Florida (Count D-IV): Speier-Roche v. Volkswagen Grp. of Am., Inc., 2014 U.S. Dist. LEXIS 59991, at *21 (S.D. Fla. Apr. 30, 2014) (“Florida law requires privity for implied warranty claims”); Mesa v. BMW of N. Am., LLC, 904 So. 2d 450, 458 (Fla. Dist. Ct. App. 2005) (“Under Florida law, a plaintiff cannot recover economic losses for breach of implied warranty in the absence of privity”).  Georgia (Count E-V): McQueen v. Minolta Bus. Sols., Inc., 275 Ga. App. 297, 300 (2005) (“Implied warranties [] arise out of a contract for sale of goods and can only run to a buyer who is in privity of contract with the party against whom the implied warranty is being asserted… [W]hen a buyer purchases a product from a retailer, and there is no privity of contract between the manufacturer and the buyer, no implied warranty runs from the manufacturer to the purchaser”).  Illinois (Count F-IV): Jensen v. Bayer AG, 371 Ill. App. 3d 682, 690-91 (2007) (“In order for a plaintiff to file a claim for economic damages under the Uniform Commercial Code … for the breach of an implied warranty, he or she must be in vertical privity of contract with the seller”).  Ohio (Count H-IV): Risner v. Regal Marine Indus., 8 F. Supp. 3d 959, 994 (S.D. Ohio 2014) (“Ohio law requires privity in order to sustain a contract-based breach of implied warranty claim”).  Tennessee (Count I-IV): Olney v. Beaman Bottling Co., 220 Tenn. 459, 462 (1967) (“there is no implied warranty where there is no privity of contract, and [] there is no implied warranty of fitness running with a product from the manufacturer to the consumer”).  Utah (Count K-IV): Davencourt at Pilgrims Landing Homeowners Ass’n v. Davencourt at Pilgrims Landing, LC, 221 P.3d 234, 252 (Utah 2009) (“Privity of contract is required to bring a claim for breach of the implied warranty.”).  Washington (Count L-IV): Afoa v. China Airlines Ltd., 2013 U.S. Dist. LEXIS 93816, at *6 (W.D. Wash. July 3, 2013) (“Contractual privity between the parties is required to establish a claim for breach of implied warranty”). Breach of express warranty (Counts C-III, D-III, E-IV, F-III, G-III, H-III, I-III, J-III, K-III, L-III): Plaintiffs’ express warranty claims fail because plaintiffs are unambiguously asserting design defect claims that are not covered by BMW NA’s limited warranty that only covers defects in materials or workmanship. In addition, Colorado, Florida, Georgia, Illinois, Michigan, Case 8:16-cv-00966-BRO-SS Document 47-2 Filed 11/28/16 Page 6 of 7 Page ID #:745 Jessica Thompson November 16, 2016 Page 6 4851-5167-7245.2 LEWIS BRISBOIS BISGAARD & SMITH LLP • www.lewisbrisbois.com Ohio, Tennessee, and Texas each require a plaintiff to demonstrate that he/she presented the vehicle to the defendant and gave the defendant an opportunity to repair the purported defect, and that the defendant refused or failed to repair the purported defect after a reasonable number of attempts. More than half of the named plaintiffs have admittedly failed to present their vehicles to an authorized BMW dealership for repair (as required by the terms of their written warranties) because they claim presentation would be “futile.” These plaintiffs have thus failed to do what courts recognize is a prerequisite for bringing a breach of express warranty claim against a defendant and have not fulfilled their obligations under the terms of the warranty they claim BMW NA breached. Unjust Enrichment (Counts C-VI, D-VI, E-VII, F-VI, G-VI, H-VI, I-VI, J-VI, K-VI, L- VI): Colorado, Florida, Georgia, Illinois, Michigan, Ohio, Tennessee, Texas, Utah, and Washington all preclude a plaintiff from pursuing an unjust enrichment claim, which is an equitable claim, when the plaintiff has an adequate remedy at law. Given that plaintiffs are asserting legal statutory and common law causes of action against BMW NA, an equitable claim like unjust enrichment is unavailable to them. Kindly let me know when you are available to discuss these further. Given that BMW NA’s response to the complaint is due November 28, 2016, I’d appreciate discussing these with you not later than Monday, November 21, 2016 (if not sooner). My hope is that plaintiffs will agree to dismiss these claims so that the parties can focus their efforts on the claims that are truly at issue. Very truly yours, Eric Y. Kizirian of LEWIS BRISBOIS BISGAARD & SMITH LLP EYK cc: Steve Berman Benjamin F. Johns Kathryn Harvey Jonathan Michaels Case 8:16-cv-00966-BRO-SS Document 47-2 Filed 11/28/16 Page 7 of 7 Page ID #:746 EXHIBIT B Case 8:16-cv-00966-BRO-SS Document 47-3 Filed 11/28/16 Page 1 of 4 Page ID #:747 1 Zarifian, Zourik From: Jessica Thompson Sent: Wednesday, November 23, 2016 4:35 PM To: Kizirian, Eric Cc: Cho, Dyanne; Steve Berman; Benjamin F. Johns; Kathryn Harvey; jmichaels@mlgautomotivelaw.com; Zarifian, Zourik Subject: RE: Consolidated Complaint (BMW i3): Local Rule 7-3 meet and confer Thanks for clarifying, Eric. We agree to withdraw Parmeshwar and Lingsweiler as well, but not to withdraw Ridges. So in sum, we are withdrawing all express warranty claims (NVLW and by representation) for Braverman, Bernard, Curcio, Lingsweiler, Olsen, Parmeshwar, Redmond, Roberson, and Wonderly without prejudice. Thanks, Jessica Jessica Thompson | Hagens Berman Sobol Shapiro LLP | Direct: (206) 268-9335 From: Kizirian, Eric [mailto:Eric.Kizirian@lewisbrisbois.com] Sent: Wednesday, November 23, 2016 2:09 PM To: Jessica Thompson Cc: Cho, Dyanne; Steve Berman; Benjamin F. Johns; Kathryn Harvey; jmichaels@mlgautomotivelaw.com; Zarifian, Zourik Subject: RE: Consolidated Complaint (BMW i3): Local Rule 7-3 meet and confer Jessica, thanks for the update. To clarify, based on our review of the complaint, the following nine plaintiffs have not alleged presentment (Braverman, Roberson, Bernard, Curcio, Parmeshwar, Olsen, Wonderly, Lingsweiler, and Redmond). You list Ridges, who in fact does allege presentment. You fail to include Pameshwar and Lingsweiler who do not allege presentment. Please confirm this and let us know if you withdraw as to them also. Also, are you withdrawing the express warranty by representation claim as to these plaintiffs or keeping those? Hope you have a good holiday also. From: Jessica Thompson [mailto:jessicat@hbsslaw.com] Sent: Wednesday, November 23, 2016 1:45 PM To: Kizirian, Eric Cc: Cho, Dyanne; Steve Berman; Benjamin F. Johns; Kathryn Harvey; jmichaels@mlgautomotivelaw.com; Zarifian, Zourik Subject: RE: Consolidated Complaint (BMW i3): Local Rule 7-3 meet and confer Hi Eric, Thanks again for your letter and the call on Monday. We can agree to withdraw the following claims: Case 8:16-cv-00966-BRO-SS Document 47-3 Filed 11/28/16 Page 2 of 4 Page ID #:748 2 • Breach of Contract claims for each state; • Express warranty claims without prejudice for plaintiffs who do not have presentment allegations (Braverman, Roberson, Bernard, Curcio, Olsen, Wonderly, Ridges, and Redmond); and • Unjust enrichment claims for Texas. Hope you enjoy the holiday. Please feel free to give a call if you need clarification. Best, Jessica Jessica Thompson | Hagens Berman Sobol Shapiro LLP | Direct: (206) 268-9335 From: Kizirian, Eric [mailto:Eric.Kizirian@lewisbrisbois.com] Sent: Thursday, November 17, 2016 12:36 PM To: Jessica Thompson Cc: Cho, Dyanne; Steve Berman; Benjamin F. Johns; Kathryn Harvey; jmichaels@mlgautomotivelaw.com; Zarifian, Zourik Subject: RE: Consolidated Complaint (BMW i3): Local Rule 7-3 meet and confer Jessica, how about 11 a.m. pacific? Since you’ll have had some time to digest the letter by then, my hope is that you’ll be able to give me some concrete direction during on the call as to plaintiffs’ intentions. From: Jessica Thompson [mailto:jessicat@hbsslaw.com] Sent: Thursday, November 17, 2016 12:32 PM To: Kizirian, Eric Cc: Cho, Dyanne; Steve Berman; Benjamin F. Johns; Kathryn Harvey; jmichaels@mlgautomotivelaw.com Subject: RE: Consolidated Complaint (BMW i3): Local Rule 7-3 meet and confer Thanks, Eric. Can you let us know some times on Monday that would work for you? Jessica Thompson | Hagens Berman Sobol Shapiro LLP | Direct: (206) 268-9335 From: Kizirian, Eric [mailto:Eric.Kizirian@lewisbrisbois.com] Sent: Wednesday, November 16, 2016 10:01 PM To: Jessica Thompson Cc: Cho, Dyanne; Steve Berman; Benjamin F. Johns; Kathryn Harvey; jmichaels@mlgautomotivelaw.com Subject: Consolidated Complaint (BMW i3): Local Rule 7-3 meet and confer Jessica, Please see attached letter regarding plaintiffs’ consolidated complaint. Regards, Eric Case 8:16-cv-00966-BRO-SS Document 47-3 Filed 11/28/16 Page 3 of 4 Page ID #:749 3 Eric Y. Kizirian Partner | Co-Chair, Class Action & Mass Torts Practice Eric.Kizirian@lewisbrisbois.com T: 213.580.3981 F: 213.250.7900 633 W. 5th Street, Suite 4000, Los Angeles, CA 90071 | LewisBrisbois.com Representing clients from coast to coast. View our nationwide locations. This e-mail may contain or attach privileged, confidential or protected information intended only for the use of the intended recipient. If you are not the intended recipient, any review or use of it is strictly prohibited. If you have received this e-mail in error, you are required to notify the sender, then delete this email and any attachment from your computer and any of your electronic devices where the message is stored. Case 8:16-cv-00966-BRO-SS Document 47-3 Filed 11/28/16 Page 4 of 4 Page ID #:750