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

NOTICE OF MOTION AND MOTION to Dismiss First Amended Complaint

C.D. Cal.April 3, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4838-4237-8821.1 8:16-cv-00966-BRO-SS BMW OF NORTH AMERICA, LLC’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED 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, HAKOP DEMIRCHYAN, JOEL GREEN, CHEVAY JONES, DR. GLYNDA ROBERSON, EDO TSOAR, PETER WEINSTEIN, THOMAS MUNK, PETER BERNARD, LAWRENCE CURCIO, NAVEEN PARMESHWAR, ADEEL SIDDIQUI, CHARLES OLSEN, ROBERT DESATNIK, ERIC WONDERLY, JOHN LINGSWEILER, STEVE RIDGES, AND BRANDON REDMOND, 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’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT FOR FAILURE TO STATE A CLAIM (FED. R. CIV. P. 12(B)(6)) Date: May 1, 2017 Time: 1:30 p.m. Place: Courtroom 7C Case 8:16-cv-00966-BRO-SS Document 61 Filed 04/03/17 Page 1 of 2 Page ID #:1036 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 4838-4237-8821.1 1 8:16-cv-00966-BRO-SS BMW OF NORTH AMERICA, LLC’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW NOTICE OF MOTION AND MOTION TO DISMISS PLEASE TAKE NOTICE that on Monday, May 1, 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’ First Amended Consolidated Class Action Complaint (“FAC”). Specifically, by this motion, under Fed. R. Civ. P. 8 and 12(b)(6), BMW NA seeks an order dismissing the following counts in the FAC for failure to state a claim upon which relief can be granted: C-III, C-V, D-IV, F-III, G-IV, H-III, H-V, I-III, J-III, J-V, K-III, K-V, and L-III. This motion is made following the conferences of counsel pursuant to L.R. 7-3. By letter dated March 17, 2017, counsel for BMW NA outlined in detail, with appropriate case law references, the two causes of action it would challenge in its motion to dismiss. Thereafter, on March 24, 2017, the parties participated in a telephonic meet and confer, but the parties were unable to reach a resolution regarding the claims BMW NA is challenging, necessitating this motion. 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: April 3, 2017 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 61 Filed 04/03/17 Page 2 of 2 Page ID #:1037 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 4816-6801-3381.3 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED 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, HAKOP DEMIRCHYAN, JOEL GREEN, CHEVAY JONES, DR. GLYNDA ROBERSON, EDO TSOAR, PETER WEINSTEIN, THOMAS MUNK, PETER BERNARD, LAWRENCE CURCIO, NAVEEN PARMESHWAR, ADEEL SIDDIQUI, CHARLES OLSEN, ROBERT DESATNIK, ERIC WONDERLY, JOHN LINGSWEILER, STEVE RIDGES, AND BRANDON REDMOND, 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’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT DUE TO FAILURE TO STATE A CLAIM (FED. R. CIV. P. 12(B)(6)) Date: May 1, 2017 Time: 1:30 p.m. Place: Courtroom 7C Case 8:16-cv-00966-BRO-SS Document 61-1 Filed 04/03/17 Page 1 of 11 Page ID #:1038 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 4816-6801-3381.3 i 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW TABLE OF CONTENTS Page I. Introduction .......................................................................................................1 II. Summary of Relevant Facts ..............................................................................2 III. Plaintiffs Fail To Allege BMW NA Breached the NVLW...............................4 IV. Plaintiffs’ Unjust Enrichment Claims Fail and Must Be Dismissed Because Plaintiffs Have an Adequate Remedy at Law, and The FAC Does Not Indicate Otherwise. ...........................................................................6 V. Conclusion.........................................................................................................9 Case 8:16-cv-00966-BRO-SS Document 61-1 Filed 04/03/17 Page 2 of 11 Page ID #:1039 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 4816-6801-3381.3 1 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW I. INTRODUCTION On February 3, 2017, this Court granted in part BMW of North America, LLC’s (“BMW NA”) Motion to Dismiss plaintiffs’ Consolidated Class Action Complaint (“Complaint”), which asserted over forty combined claims 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. Dkt. 55, Motion to Dismiss Order (“MTD Order”) at 37. On March 6, 2017, plaintiffs filed their First Amended Consolidated Class Action Complaint (“FAC”), which adds one additional California plaintiff, Hakop Demirchyan,1 drops certain causes of action,2 and adds allegations intended to cure the defects in plaintiffs’ remaining express warranty and unjust enrichment claims. Dkt. 56. Yet plaintiffs’ amendments do not cure the defects in plaintiffs’ breach of express warranty claims based on the New Vehicle Limited Warranty (“NVLW”) or their unjust enrichment claims under several states’ laws. BMW NA limits this motion to these two claims. First, plaintiffs still do not plead a viable breach of express warranty claim under the vehicles’ NVLW.3 Plaintiffs continue to allege that “limp mode” driving is caused 1 Plaintiff Hakop Demirchyan was the lone plaintiff in case 2:16-cv-09031-BRO-SSx, which was consolidated with this first-filed action by stipulation and Court order. Dkt. 53. 2 Plaintiffs have dropped their Florida, Georgia, Michigan, Tennessee, and Washington express warranty claims (Dkt. 37, Counts D-III, E-IV, G-III, I-III, and L-III) and breach of contract claims (Dkt. 37, B-VII, C-V, D-V, E-VI, F-V, G-V, H-V, I-V, J-V, K-V, L- V), which were claims plaintiffs agreed to drop as part of the first motion to dismiss meet and confer process. Plaintiffs also have dropped their implied warranty claims under Illinois, Ohio, Tennessee and Washington law (Dkt. 37, Counts F-IV, H-IV, I-IV, and L-IV), unjust enrichment claims under Georgia and Illinois law (Dkt. 37, Counts E- VII, F-VI), and stand-alone claim for exemplary damages (Dkt. 37, Count B-III), which were claims the Court dismissed in the MTD Order. 3 Although BMW NA maintains that plaintiffs’ warranty by representation claims lack merit and will be disproved in anticipated evidence based motions, it is not challenging the adequacy of plaintiffs’ allegations on the warranty by representation claims in this (footnote continued) Case 8:16-cv-00966-BRO-SS Document 61-1 Filed 04/03/17 Page 3 of 11 Page ID #:1040 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 4816-6801-3381.3 2 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW by a design choice and impacts all i3 REx vehicles. This theory pleads a design defect claim that this Court already held is not covered by BMW NA’s limited warranty covering defects in “materials and workmanship.” MTD Order at 19. The new facts in the FAC do not change this foundational and dispositive defect theory. Second, plaintiffs fail to plead valid unjust enrichment claims under several states’ laws because plaintiffs cannot assert these claims-either concurrently or in the alternative-where plaintiffs have an adequate legal remedy. The FAC does not allege plaintiffs lack an adequate legal remedy nor can it since plaintiffs concurrently seek legal remedies under other causes of action. Plaintiffs’ unjust enrichment claims remain defective for the reasons the Court addressed in the MTD Order. II. SUMMARY OF RELEVANT FACTS The foundational facts in the FAC are similar to those in the Complaint. There are now eighteen named plaintiffs-seven from California, two from Florida, and one each from Colorado, Georgia, Illinois, Michigan, Ohio, Tennessee, Texas, Utah, and Washington. FAC ¶¶ 72-89. Plaintiffs assert numerous 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, when the Range Extender on the subject vehicles is activated, their vehicles enter a so-called “limp mode” that affects the vehicle’s speed and performance. FAC ¶¶ 29, 41-43. Plaintiffs claim this potential reduced power driving mode was not disclosed to consumers and constitutes a defect.4 Id. ¶ 10-12. Specifically, plaintiffs claim the subject vehicles motion. 4 BMW NA maintains that reduced power driving for a heavily discharged battery is not a “defect,” does not present a safety concern, and was disclosed to consumers. For example, the owner’s manual for 2015 model year i3 REx vehicles expressly states in the Range Extender description that “[i]f 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 61-1 Filed 04/03/17 Page 4 of 11 Page ID #:1041 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 4816-6801-3381.3 3 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW “share a common design defect in that the Range Extender fails to operate as represented by BMW NA….” Id. ¶ 124. Plaintiffs purport to represent a 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. ¶ 107. 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. 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 thirty other claims on behalf of the various subclasses for: (1) fraud by concealment, (2) unjust enrichment, (3) violation of California’s Unfair Competition Law (Cal. Bus. & Prof. Code § 17200 et seq.) (“UCL”), (4) violation of California’s Consumers Legal Remedies Act (Cal. Civ. Code § 1750 et seq.) (“CLRA”), (5) violation of California’s False Advertising Law (Cal. Bus. & Prof. Code § 17500 et seq.) (“FAL”), (6) breach of implied warranty of merchantability (Cal. Com. Code § 2314), (7) breach of implied warranty of merchantability under the Song-Beverly Act (Cal. Civ. Code §§ 1791.1 & 1792), (8) breach of express warranties under the Song-Beverly Act (Cal. Civ. Code §§ 1791.2 & 1793.2(D)), (9) violations of the Colorado Consumer Protection Act (Colo. Rev. Stat. § 6-1-101 et seq.), (10) breach of express warranty (Colo. Rev. Stat. § 4-2-313), (11) breach of implied warranty of merchantability (Colo. Rev. Stat. § 4-2-314), (12) violation of Florida’s Unfair & Deceptive Trade Practices Act (Fla. Stat. § 501.201 et seq.), (13) breach of implied warranty of merchantability (Fla. Stat. § 672.314), (14) violation of Georgia’s Fair Business Practices Act (Ga. Code Ann. § 10-1-390 et seq.), (15) violation of Georgia’s Uniform Deceptive Trade Practices Act (Ga. Code Ann. § 10-1-370 et seq.), (16) breach of implied warranty of merchantability (Ga. Code Case 8:16-cv-00966-BRO-SS Document 61-1 Filed 04/03/17 Page 5 of 11 Page ID #:1042 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 4816-6801-3381.3 4 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Ann. § 11-2-314), (17) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. & 720 ILCS 295/1A), (18) breach of express warranty (810 Ill. Comp. Stat 5/2-313), (19) violation of the Michigan Consumer Protection Act (Mich. Comp. Laws § 445.903 et seq.), (20) breach of implied warranty of merchantability (Mich. Comp. Laws § 440.2314), (21) violations of the Consumer Sales Practices Act (Ohio Rev. Code § 1345.01 et seq.), (22) breach of express warranty (Ohio Rev. Code § 1302.26 (U.C.C. § 2-313)), (23) violation of Tennessee Consumer Protection Act (Tenn. Code § 47-18-101 et seq.), (24) violations of the Deceptive Trade Practices Act (Tex. Bus. & Com. Code § 17.41 et seq.), (25) breach of express warranty (Tex. Bus. & Com. Code § 2.313), (26) breach of implied warranty of merchantability (Tex. Bus. & Com. Code § 2.314), (27) violation of Utah Consumer Sales Practices Act (Utah Code Ann. § 13-11-1 et seq.), (28) breach of express warranty (Utah Code Ann. § 70A-2-313), (29) breach of implied warranty of merchantability (Utah Code Ann. § 70A-2-314), and (30) violation of the Washington Consumer Protection Act (Wash. Rev. Code § 19.86.010 et seq.). Prior to filing this motion, counsel for BMW NA sent a detailed meet and confer letter that outlined-with appropriate references to case law and to this Court’s Order- the causes of action BMW NA intended on challenging 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 discussion on March 24, 2017, but were unable to reach a resolution regarding these disputed claims.5 III. PLAINTIFFS FAIL TO ALLEGE BMW NA BREACHED THE NVLW. The Colorado, Illinois, Ohio, Texas,6 and Utah plaintiffs continue to allege that 5 The parties could not meet and confer in person because lead counsel for plaintiffs is located out-of-state. 6 Plaintiffs originally agreed to voluntarily withdraw Texas plaintiff John Lingsweiler’s express warranty claim after the parties’ November 21, 2016 meet and confer efforts. Dkt. 47, Motion to Dismiss Plaintiffs’ Consolidated Class Action Complaint (“MTD (footnote continued) Case 8:16-cv-00966-BRO-SS Document 61-1 Filed 04/03/17 Page 6 of 11 Page ID #:1043 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 4816-6801-3381.3 5 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW BMW NA breached the NVLW with no new facts that alter this Court’s finding that this lawsuit centers on an alleged design defect that is not covered under the express terms of BMW NA’s NVLW. See MTD Order at 18 (“the NVLW appears to unambiguously state that only ‘defects in materials and workmanship’ are covered under the NVLW”; “Plaintiffs’ allegations reflect claims of a design defect” which are not covered by BMW NA’s NVLW).7 Plaintiffs’ efforts to plead around the MTD Order fail. They attempt to plead a covered defect under the NVLW by alleging “BMW AG’s design decisions-made here with BMW NA’s knowledge-are incorporated into each step of the manufacturing process, such that a defect in the design of the REx system is indistinguishable from a manufacturing defect.” FAC ¶¶ 257, 420, 519, 629, 698 (emphasis added). But this semantic sleight of hand does not change plaintiffs’ foundational design defect theory. As plaintiffs would have it, because the allegedly defective design is implemented into all i3 REx vehicles through a manufacturing process, the alleged design defect somehow transforms into a covered defect in materials and workmanship. But the fact that an allegedly defective design is incorporated into the manufacturing process when all i3 REx vehicles are manufactured Complaint”), Ex. B. The FAC, however, asserts an express warranty claim on behalf of plaintiff John Lingsweiler and the Texas class. FAC ¶¶ 626-41. After the parties meet- and-confer on March 24, 2017, plaintiffs’ counsel agreed this was an oversight and that the Texas plaintiff’s express warranty claim remains withdrawn. 7 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”). Case 8:16-cv-00966-BRO-SS Document 61-1 Filed 04/03/17 Page 7 of 11 Page ID #:1044 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 4816-6801-3381.3 6 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW is self-evident: if a design choice is not incorporated into a vehicle through the manufacturing process (i.e. the assembly line), how else would a car be built? The applicable law requires focus on the nature of the claim, rather than the labels plaintiffs affix to them. Plaintiffs do not allege the defect is caused by select BMW i3 REx vehicles being produced outside of their intended design specifications- the definition of a defect in materials and workmanship. Rather, as in McCabe v. American Honda Motor Co., plaintiffs’ claim is that “the [i3 REx] is built in accordance with its intended specifications, but the design itself is inherently defective.” 100 Cal. App. 4th 1111, 1120 (2002); see also MTD Order n.6. The allegations in plaintiffs’ FAC clearly illustrate this. See, e.g., FAC ¶ 24 (“…when designing the REx feature on the i3…”) (emphasis added); ¶ 124 (“The Affected Vehicles share a common design defect in that the Range Extender fails to operate as represented by BMW NA…”) (emphasis added); ¶ 127 (“…BMW NA … failed to … disclose the defective design.”) (emphasis added). Moreover, the crux of plaintiffs’ claim is that all i3 REx vehicles suffer from the same alleged defect, which is clearly a design defect claim. Gertz v. Toyota Motor Corp., 2011 U.S. Dist. LEXIS 94183, at *10 (C.D. Cal. Aug. 22, 2011). In short, plaintiffs’ theory has been and remains that a defective design affects all i3 REx vehicles and that all i3 REx vehicles are made in conformity with this design choice. This is a design defect allegation that does not trigger the NVLW. See Sharma v. BMW of N. Am., LLC, 2014 U.S. Dist. LEXIS 84406, at *11-15 (N.D. Cal. June 19, 2014). Counts C-III, F-III, H-III, J-III, and K-III should be dismissed again. IV. PLAINTIFFS’ UNJUST ENRICHMENT CLAIMS FAIL AND MUST BE DISMISSED BECAUSE PLAINTIFFS HAVE AN ADEQUATE REMEDY AT LAW, AND THE FAC DOES NOT INDICATE OTHERWISE. Although this Court dismissed all unjust enrichment claims in the Complaint, the Case 8:16-cv-00966-BRO-SS Document 61-1 Filed 04/03/17 Page 8 of 11 Page ID #:1045 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 4816-6801-3381.3 7 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Colorado, Florida, Michigan, Ohio, Tennessee, Texas,8 Utah, and Washington plaintiffs re-plead them in the FAC “in the alternative” and “[i]n the event that no adequate legal remedy is available.” See FAC ¶¶ 278, 330, 476, 533, 579, 719, 766. This repositioning of the unjust enrichment claim appears to be the only modification to these claims. And no plaintiff claims he or she lacks an adequate legal remedy. Yet an unjust enrichment claim is available to a plaintiff only if he or she does not have an adequate remedy at law.9 See MTD Order at 30-35. And the FAC is replete with claims that, if successful, would provide plaintiffs with adequate legal remedies. That plaintiffs may not prevail on such claims for legal remedies is irrelevant. 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).10 8 Plaintiffs agreed to voluntarily withdraw unjust enrichment claims for Texas after the parties’ November 21, 2016 meet and confer efforts. MTD Complaint, Ex. B. The FAC, however, asserts unjust enrichment claims on behalf of Texas plaintiff John Lingsweiler and the Texas class. FAC ¶¶ 648-56. After the parties meet-and-confer on March 24, 2017, plaintiffs’ counsel agreed this was an oversight and that the Texas plaintiff’s unjust enrichment claim remains withdrawn. 9 Harris Grp., Inc. v. Robinson, 209 P.3d 1188, 1205 (Colo. App. 2009) (Colorado); Am. Honda Motor Co. v. Motorcycle Info. Network, Inc., 390 F. Supp. 2d 1170, 1178 (M.D. Fla. 2005) (Florida); Slusher v. Frome, 110 N.W.2d 672, 672-73 (Mich. 1961) (Michigan); Weiper v. W.A. Hill & Assoc., 661 N.E.2d 796, 804 (Ohio Ct. App. 1995) (Ohio); Paschall’s, Inc. v. Dozier, 407 S.W.2d 150, 155 (Tenn. 1966) (Tennessee); Tex. Carpenters Health Benefit Fund, IBEW-NECA v. Philip Morris, Inc., 21 F. Supp. 2d 664, 678 (E.D. Tex. 1998) (Texas); Ockey v. Lehmer, 189 P.3d 51, 61 (Utah 2008) (Utah); Orwick v. City of Seattle, 692 P.2d 793, 796 (Wash. 1984) (Washington). 10 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 (footnote continued) Case 8:16-cv-00966-BRO-SS Document 61-1 Filed 04/03/17 Page 9 of 11 Page ID #:1046 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 4816-6801-3381.3 8 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW Plaintiffs’ assertion that their unjust enrichment claim is made “in the alternative” does not help them. In re Porsche Cars N. Am., Inc. Plastic Coolant Tubes 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). In PCNA, the court held that the 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. 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.11 Plaintiffs do not dispute the validity or existence of BMW NA’s written warranty. To the contrary, they expressly quote the NVLW’s terms and claim BMW NA breached it. See FAC ¶¶ 257, 420, 519, 698. Plaintiffs also assert several other claims under consumer protection and other laws that provide for legal remedies if plaintiffs can prove BMW NA violated those laws. As such, plaintiffs cannot plead unjust enrichment claims concurrently or in the alternative. Francis v. Mead Johnson distinct from those pled under express warranty” and concluding “[p]laintiff has available a contractual remedy through the breach of express warranty claim”). 11 The mere fact that BMW NA’s NVLW 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 61-1 Filed 04/03/17 Page 10 of 11 Page ID #:1047 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 4816-6801-3381.3 9 8:16-cv-00966-BRO-SS MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT LEWIS BRISBOIS BISGAARD &SMITHLLP ATTORNEYS AT LAW & Co., 2010 U.S. Dist. LEXIS 137630, at *28 (D. Colo. Dec. 17, 2010) (holding that pleading unjust enrichment claims in the alternative was “superfluous” where the plaintiff sought the same damages for her legal claims); Terrill v. Electrolux Home Prod., Inc., 753 F. Supp. 2d 1272, 1291 (S.D. Ga. 2010) (holding that a plaintiff cannot use an unjust enrichment claim to alter or expand the terms of an express warranty that covers the product that is the subject of the claim and cannot bring an unjust enrichment claim in the alternative where the validity or existence of the subject contract is not being disputed); MTD Order at 31-32. Counts C-V, D-IV, G-IV, H-V,12 I-III, J-V, K- V, and L-III should be dismissed again. V. CONCLUSION BMW NA respectfully requests that its motion be granted. Dated: April 3, 2017 LEWIS BRISBOIS BISGAARD & SMITH LLP By: Eric Y. Kizirian Attorneys for Defendant BMW of North America, LLC 12 The Table of Contents in the FAC lists this as Count V, but it appears to be Count IV. Case 8:16-cv-00966-BRO-SS Document 61-1 Filed 04/03/17 Page 11 of 11 Page ID #:1048 EXHIBIT A Case 8:16-cv-00966-BRO-SS Document 61-2 Filed 04/03/17 Page 1 of 4 Page ID #:1049 4834-4107-9365.1 Eric Y. Kizirian 633 West 5th Street, Suite 4000 Los Angeles, California 90071 Eric.Kizirian@lewisbrisbois.com Direct: 213.580.3981 March 17, 2017 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 First Amended 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 limited to the adequacy of plaintiffs’ breach of warranty and unjust enrichment claims in their First Amended Consolidated Class Action Complaint (“FAC”), as discussed herein. We believe that these claims remain defective. It is our hope that plaintiffs will simply withdraw these claims, which will then allow us to file an answer to the remaining claims once a further amended complaint is filed. As such, 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 FAC that we intend to present in our anticipated motion. Breach of Express Warranty Based on the NVLW (Counts C-III, F-III, H-III, J-III, K-III): Notwithstanding Judge O’Connell’s Order that “Plaintiffs fail to establish breach of express warranty claims based upon the NVLW” (Motion to Dismiss Order (“MTD Order”) at 19), the Colorado, Illinois, Ohio, Texas,1 and Utah plaintiffs re-allege these claims with no new facts. Plaintiffs are still pursuing a design defect claim, which is not covered by the NVLW. Indeed, their claims are still based on “BMW AG’s design decisions ….” Plaintiffs’ attempted work around claim that AG’s “design choices” that ostensibly were “made here with BMW NA’s knowledge-are incorporated into each step of the manufacturing process, such that a defect in the design of the REx system is indistinguishable from a manufacturing defect” (FAC ¶¶ 1 Plaintiffs had agreed to voluntarily withdraw the Texas plaintiffs’ express warranty claims after the November 21, 2016 meet and confer. The FAC, however, asserts express warranty claims on behalf of the Texas plaintiffs. Case 8:16-cv-00966-BRO-SS Document 61-2 Filed 04/03/17 Page 2 of 4 Page ID #:1050 Jessica Thompson March 17, 2017 Page 2 4834-4107-9365.1 LEWIS BRISBOIS BISGAARD & SMITH LLP www.lewisbrisbois.com 257, 420, 519, 629, 698) does not withstand scrutiny. The nature of the claim, rather than the labels plaintiffs assign to them, are what’s controlling here. There is no claim that any BMW i3 REx was produced outside of intended specifications. As in McCabe, plaintiffs claim a “the product is built in accordance with its intended specifications, but the design itself is inherently defective.” McCabe v. American Honda Motor Co., 100 Cal. App. 4th 1111, 1120 (2002); see also MTD Order n.6. Moreover, the crux of plaintiffs’ claim is that all i3 REx vehicles suffer from the same alleged defect, which is clearly a design defect claim. Gertz v. Toyota Motor Corp., 2011 U.S. Dist. LEXIS 94183, at *10 (C.D. Cal. Aug. 22, 2011). The allegations that the allegedly defective design is incorporated into the manufacturing process when all i3 REx vehicles are produced is self-evident and does not salvage plaintiffs’ breach of warranty claim on the basis of the NVLW. Given the NVLW covers “defects in materials and workmanship” and not design defects (MTD Order at 18 & n.8), BMW NA intends on moving to dismiss plaintiffs’ express warranty claims based on the NVLW. We ask that plaintiffs drop their warranty breach allegations on the basis of the NVLW and proceed only on the basis of their claimed warranty by representation allegations. Unjust Enrichment (Counts C-V, D-IV, G-IV, H-V,2 I-III, J-V, K-V, L-III): The Colorado, Florida, Michigan, Ohio, Tennessee, Texas,3 Utah, and Washington plaintiffs re-plead their unjust enrichment claims even though Judge O’Connell dismissed these equitable claims on the basis that plaintiffs already have an adequate remedy at law. See MTD Order at 30-35. BMW NA maintains that plaintiffs cannot assert unjust enrichment claims in these states-either concurrently or in the alternative-when plaintiffs have available to them an adequate remedy at law. The cases Judge O’Connell cites in her Order also stand for the proposition that unjust enrichment claims cannot be plead in the alternative, even at the pleading stage, where plaintiffs seek damages at law for the same wrongful conduct. See, e.g., Francis v. Mead Johnson & Co., 2010 U.S. Dist. LEXIS 137630, at *28 (D. Colo. Dec. 17, 2010) (holding that pleading unjust enrichment in the alternative was superfluous where the plaintiff sought the same damages for her legal claims) (MTD Order at 31); Terrill v. Electrolux Home Prod., Inc., 753 F. Supp. 2d 1272, 1291 (S.D. Ga. 2010) (holding that a plaintiff cannot use an unjust enrichment claim to alter or expand the terms of an express warranty that covers the product that is the subject of the claim and cannot bring an unjust enrichment claim in the alternative where the validity or existence of the subject contract is not being disputed) (MTD Order at 32). Moreover, plaintiffs fail to “affirmatively show a lack of an adequate remedy at law on the face of the pleading” (MTD Order at 34), which further precludes their unjust enrichment claims from withstanding serious scrutiny. BMW NA thus intends on moving to dismiss plaintiffs’ unjust enrichment claims from the FAC. 2 The Table of Contents in the FAC lists this as Count V, but it appears it really is Count IV. 3 Plaintiffs had agreed to voluntarily withdraw the Texas plaintiffs’ unjust enrichment claims after the November 21, 2016 meet and confer. The FAC, however, asserts unjust enrichment claims on behalf of the Texas plaintiffs. Case 8:16-cv-00966-BRO-SS Document 61-2 Filed 04/03/17 Page 3 of 4 Page ID #:1051 Jessica Thompson March 17, 2017 Page 3 4834-4107-9365.1 LEWIS BRISBOIS BISGAARD & SMITH LLP www.lewisbrisbois.com Kindly let me know when you are available to discuss these further. Given that BMW NA’s response to the FAC is due April 3, 2017, I’d appreciate discussing these with you on Monday, March 20th, or my next available date on Friday, March 24, 2017. Our hope is that plaintiffs will agree to dismiss these two claims so the parties can continue focusing 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 61-2 Filed 04/03/17 Page 4 of 4 Page ID #:1052 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 4847-2092-8582.1 8:16-cv-00966-BRO-SS [Proposed] Order Granting BMW of North America, LLC’s Motion to Dismiss Plaintiffs’ First Amended Consolidated Class Action Complaint UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION BARRY BRAVERMAN, HAKOP DEMIRCHYAN, JOEL GREEN, CHEVAY JONES, DR. GLYNDA ROBERSON, EDO TSOAR, PETER WEINSTEIN, THOMAS MUNK, PETER BERNARD, LAWRENCE CURCIO, NAVEEN PARMESHWAR, ADEEL SIDDIQUI, CHARLES OLSEN, ROBERT DESATNIK, ERIC WONDERLY, JOHN LINGSWEILER, STEVE RIDGES, AND BRANDON REDMOND, 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 [PROPOSED] ORDER GRANTING BMW OF NORTH AMERICA, LLC’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT BMW of North America, LLC’s (“BMW NA”) motion to dismiss the First Amended Consolidated Class Action Complaint (“FAC”) of Plaintiffs Barry Braverman, Hakop Demirchyan, 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”) pursuant Case 8:16-cv-00966-BRO-SS Document 61-3 Filed 04/03/17 Page 1 of 2 Page ID #:1053 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 4847-2092-8582.1 2 8:16-cv-00966-BRO-SS [Proposed] Order Granting BMW of North America, LLC’s Motion to Dismiss Plaintiffs’ First Amended Consolidated Class Action Complaint to Fed. R. Civ. Proc. 12(b)(6) for failure to state a claim came on for hearing before this Court. The Court, having heard from counsel, and having fully considered all briefing and argument of the parties, hereby grants BMW NA’s motion to dismiss Plaintiffs’ FAC on all grounds raised in the motion to dismiss. IT IS SO ORDERED. Dated: _______________, 2017 _____________________________________ Beverly Reid O’Connell United States District Court Central District of California Case 8:16-cv-00966-BRO-SS Document 61-3 Filed 04/03/17 Page 2 of 2 Page ID #:1054