Paul Stockinger et al v. Toyota Motor Sales, U.S.A., Inc

NOTICE OF MOTION AND MOTION to Dismiss Plaintiffs' Complaint

C.D. Cal.March 3, 2017

DB1/ 90809060.1 NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ COMPLAINT 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES MORGAN, LEWIS & BOCKIUS LLP David L. Schrader, Bar No. 149638 david.schrader@morganlewis.com Esther K. Ro, Bar No. 252203 esther.ro@morganlewis.com Jahmy S. Graham, Bar No. 300880 jahmy.graham@morganlewis.com 300 South Grand Avenue Twenty-Second Floor Los Angeles, CA 90071-3132 Tel: +1.213.612.2500 Fax: +1.213.612.2501 Attorneys for Defendant Toyota Motor Sales, U.S.A., Inc. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA PAUL STOCKINGER, ELIZABETH STOCKINGER, GAILYN KENNEDY, BASUDEB DEY, BRENDA FLINN, and ELIEZER CASPER on behalf of themselves and all others similarly situated, Plaintiffs, vs. TOYOTA MOTOR SALES, U.S.A., INC., a California corporation, Defendant. Case No. 2:17-cv-00035-VAP (KSx) NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ COMPLAINT [Memorandum of Points and Authorities; Request for Judicial Notice; Declarations of Barry M. Hare and David L. Schrader filed concurrently herewith] [[Proposed] Order lodged concurrently herewith] Date: April 3, 2017 Time: 2:00 p.m. Judge: Hon. Virginia A. Phillips Ctrm.: 8A, 8th Floor Complaint filed: January 3, 2017 Case 2:17-cv-00035-VAP-KS Document 28 Filed 03/03/17 Page 1 of 3 Page ID #:237 DB1/ 90809060.1 1 NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ COMPLAINT 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES NOTICE OF MOTION AND MOTION TO DISMISS TO THE COURT AND TO ALL PARTIES AND COUNSEL OF RECORD: PLEASE TAKE NOTICE THAT on April 3, 2017 at 2:00 p.m., or as soon thereafter as this matter may be heard in Courtroom 8A of the Central District of California, located at 350 West 1st Street, Los Angeles, California 90012, the Honorable Virginia A. Phillips presiding, Defendant Toyota Motor Sales, U.S.A., Inc. (“Toyota”) will and hereby does move the Court for an order dismissing Plaintiffs’ Paul Stockinger, Elizabeth Stockinger, Gailyn Kennedy, Basudeb Dey, Brenda Flinn, and Eliezer Casper (collectively, “Plaintiffs”) Class Action Complaint (“Complaint”) pursuant to Federal Rule of Civil Procedure 12(b)(6) and 9(b). Toyota moves to dismiss the entirety of Plaintiffs’ Complaint for the following reasons: First, Plaintiffs fail to plausibly allege a defect with their HVAC systems that is causing the purported odors experienced. Second, Plaintiffs’ fraud-based claims fail because Plaintiffs do not identify a material misrepresentation made by Toyota about their vehicles or HVAC systems. Similarly, Plaintiffs fail to identify an omission by Toyota and that Toyota had a duty to disclose this fact. Moreover, it is undisputed that Toyota discloses the possibility of HVAC odor in its owner’s manuals. Third, Plaintiffs fail to plead a breach of warranty claim. Plaintiffs’ breach of express warranty claim fails because the written warranty is limited to defects in “materials and/or workmanship” and does not cover design defects. Plaintiffs also fail to plead a breach of the implied warranty of merchantability because their vehicles are fit for their ordinary purpose of providing transportation. The failure to plead an underlying breach of warranty claim requires dismissal of Plaintiffs’ claims under the Song-Beverly Warranty Act and the Magnuson-Moss Warranty Act. Case 2:17-cv-00035-VAP-KS Document 28 Filed 03/03/17 Page 2 of 3 Page ID #:238 DB1/ 90809060.1 2 NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ COMPLAINT 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Fourth, Plaintiffs have not otherwise alleged a claim under state consumer protections laws for any “unlawful” or “unfair” conduct. Fifth, Plaintiffs’ equitable claims fail because Plaintiffs have alleged that there is an inadequate remedy at law. Further, unjust enrichment is not an independent claim under prevailing California law. Sixth, Plaintiffs do not have standing to pursue claims regarding vehicles they did not purchase. This motion is made following the conference of counsel pursuant to L.R. 7-3 that took place on February 24, 2017. This motion is based on this Notice of Motion and Motion to Dismiss, the accompanying Memorandum of Points and Authorities, Toyota’s Request for Judicial Notice, the Declaration of Barry M. Hare, the Declaration of David L. Schrader, and all other matters that may be judicially noticed, as well as the files and records in this case, and any oral or documentary evidence that may be adduced at the hearing on this matter. Dated: March 3, 2017 MORGAN, LEWIS & BOCKIUS LLP David L. Schrader Esther K. Ro Jahmy S. Graham By /s/ David L. Schrader David L. Schrader Attorneys for Defendant Toyota Motor Sales, U.S.A., Inc. Case 2:17-cv-00035-VAP-KS Document 28 Filed 03/03/17 Page 3 of 3 Page ID #:239 DB1/ 90970339.8 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES MORGAN, LEWIS & BOCKIUS LLP David L. Schrader, Bar No. 149638 david.schrader@morganlewis.com Esther K. Ro, Bar No. 252203 esther.ro@morganlewis.com Jahmy S. Graham, Bar No. 300880 jahmy.graham@morganlewis.com 300 South Grand Avenue Twenty-Second Floor Los Angeles, CA 90071-3132 Tel: +1.213.612.2500 Fax: +1.213.612.2501 Attorneys for Defendant Toyota Motor Sales, U.S.A., Inc. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA PAUL STOCKINGER, ELIZABETH STOCKINGER, GAILYN KENNEDY, BASUDEB DEY, BRENDA FLINN, and ELIEZER CASPER on behalf of themselves and all others similarly situated, Plaintiffs, vs. TOYOTA MOTOR SALES, U.S.A., INC., a California corporation, Defendant. Case No. 2:17-cv-00035-VAP (KSx) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS TOYOTA MOTOR SALES, U.S.A., INC.’S MOTION TO DISMISS PLAINTIFFS’ COMPLAINT [Notice of Motion and Motion; Request for Judicial Notice, and Declarations of David L. Schrader and Barry M. Hare filed concurrently herewith] [[Proposed] Order lodged concurrently herewith] Date: April 3, 2017 Time: 2:00 p.m. Judge: Hon. Virginia A. Phillips Ctrm.: 8A, 8th Floor Complaint filed: January 3, 2017 Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 1 of 36 Page ID #:240 DB1/ 90970339.8 TABLE OF CONTENTS Page i MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES I. INTRODUCTION ................................................................................ 1 II. RELEVANT BACKGROUND ............................................................ 3 A. Summary Of Plaintiffs’ Allegations ..................................................... 3 B. HVAC Odor May Be Caused By Multiple Factors Unrelated To Any Alleged Design Defect .................................................................. 4 C. The Owner’s Manuals Disclose The Possibility Of HVAC Odor ........ 5 III. LEGAL STANDARDS ........................................................................ 5 IV. ARGUMENT ........................................................................................ 6 A. All Claims Fail Because Plaintiffs Do Not Plausibly Allege Any Design Defect That Caused Odors Or Mold in Their Vehicles ............ 6 1. Plaintiffs fail to plead facts that their vehicles experienced any mold-related safety hazard and they cannot rely upon conclusory “information and belief” allegations to do so .......... 7 2. Plaintiffs fail to plead facts connecting the alleged design defect to the odors they have purportedly experienced .............. 8 B. Plaintiffs’ Fraud-Based Claims Fail For Multiple Reasons ................ 10 1. Plaintiffs have not alleged a misrepresentation by Toyota....... 10 2. Plaintiffs have not identified a material omission by Toyota ....................................................................................... 11 3. Plaintiffs have not alleged a duty to disclose by Toyota .......... 12 a. Florida law does not have an “exclusive knowledge” exception .................................................... 13 b. Virginia law recognizes a limited “exclusive knowledge” exception .................................................... 14 c. Plaintiffs fail to satisfy the elements of the “exclusive knowledge” exception under California, Kansas, and Washington Law ........................................ 14 d. Plaintiff Dey cannot satisfy any unique exceptions triggering a duty to disclose under California law ......... 17 C. Plaintiffs Fail To State Breach Of Warranty Claims .......................... 18 1. Plaintiffs’ breach of express warranty claims fail for multiple reasons ........................................................................ 18 Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 2 of 36 Page ID #:241 DB1/ 90970339.8 TABLE OF CONTENTS (continued) Page ii MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES 2. Plaintiffs’ breach of implied warranty of merchantability claims fail for multiple reasons ................................................ 19 3. Plaintiffs’ MMWA and California statutory warranty claims fail as a matter of law .................................................... 20 D. Plaintiffs Also Fail To State A Claim Under The “Unlawful” And “Unfair” Prongs of State Consumer Protection Laws ................ 20 E. Plaintiffs’ Equitable Claims Fail Because They Have Not Established That There is No Adequate Remedy at Law Available ............................................................................................. 21 F. Plaintiffs Do Not Have Standing To Pursue Claims Regarding Vehicles They Did Not Purchase ........................................................ 23 V. CONCLUSION ................................................................................... 25 Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 3 of 36 Page ID #:242 DB1/ 90970339.8 iii MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES TABLE OF AUTHORITIES Page(s) CASES Adelson v. U.S. Legal Support, Inc., 715 F. Supp. 2d 1265 (S.D. Fla. 2010) ................................................................ 21 Am. Honda Motor Co. v. Sup. Ct., 199 Cal. App. 4th 1367 (2011) ............................................................................ 15 Am. Suzuki Motor Corp. v. Sup. Ct., 37 Cal. App. 4th 1291 (1995) .............................................................................. 19 Arista Records, LLC v. Doe 3, 604 F.3d 110 (2d Cir. 2010) .................................................................................. 8 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .................................................................................. 5, 6, 7, 9 Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753 (9th Cir. 2015) ............................................................................... 23 Barakezyan v. BMW of N.A., LLC, No. CV1600173SJOGJSX, 2016 WL 2840803 (C.D. Cal. Apr. 7, 2016) .................................................................................................................... 12 BCJJ, LLC v. LeFevre, No. 8:09-CV-551-T-17EAJ, 2011 WL 989230 (M.D. Fla. Mar. 21, 2011) .................................................................................................................... 14 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................................... 5, 9, 10 Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009) ............................................................................... 20 Blantz v. Cal. Dep’t of Corr. & Rehab., 727 F.3d 917 (9th Cir. Cal. 2013) ......................................................................... 7 Bros.v. Hewlett–Packard Co., No. C-06-02254, 2007 WL 485979 (N.D. Cal. Feb. 12, 2007) .......................... 18 Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 4 of 36 Page ID #:243 DB1/ 90970339.8 iv MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Brown v. Hain Celestial Grp., Inc., 913 F. Supp. 2d 881 (N.D. Cal. 2012)................................................................. 24 Brown v. Transurban USA. Inc., 144 F. Supp. 3d 809 (E.D. Va. 2015) .................................................................. 23 Carrea v. Dreyer’s Grand Ice Cream, Inc., No. C 10-01044 JSW, 2011 WL 159380 (N.D. Cal. Jan. 10, 2011) ................... 24 Cel-Tech Comm., Inc., v. Los Angeles Cell. Tel. Co., 20 Cal. 4th 163 (1999) ......................................................................................... 21 Chandler v. Wash. Toll Bridge Authority, 17 Wash. 2d 591 (1943) ...................................................................................... 23 Coe v. Philips Oral Healthcare Inc., No. C13-518-MJP, 2014 WL 722501(W.D. Wash. Feb. 24, 2014) ................... 19 Daugherty v. American Honda Motor Co., Inc., 51 Cal. Rptr. 3d 118 (2006) ................................................................................. 12 Decoteau v. FCA US LLC, No. 215CV00020MCEEFB, 2015 WL 6951296 (E.D. Cal. Nov. 10, 2015) ...................................................................................................................... 9 Diamond “S” Dev. Corp. v. Mercantile Bank, 989 So. 2d 696 (Fla. 5th DCA 2008) .................................................................. 23 Durkee v. Ford Motor Co., No. C 14-0617 PJH, 2014 WL 4352184 (N.D. Cal. Sept. 2, 2014) .................... 22 Enomoto v. Space Adventures, Ltd., 624 F. Supp. 2d 443 (E.D. Va. 2009) .................................................................. 11 Favors v. Matzke, 53 Wash. App. 789 (1989) ............................................................................ 13, 14 Fisher v. Honda N. Am., No. LA CV13-09285 JAK, 2014 WL 2808188 (C.D. Cal. June 12, 2014) .................................................................................................................... 15 Franklin v. Gwinnett Cnty. Pub. Sch., 503 U.S. 60 (1992) .............................................................................................. 22 Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 5 of 36 Page ID #:244 DB1/ 90970339.8 v MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Gertz v. Toyota Motor Corp., No. CV 10-1089, 2011 WL 3681647 (C.D. Cal. Aug. 22, 2011) ....................... 18 Granfield v. NVIDIA Corp., No. C 11-05403 JW, 2012 WL 2847575 (N.D. Cal. July 11, 2012) ................... 24 Gray v. Toyota Motor Sales, U.S.A., No. CV 08-1690 PSG JCX, 2012 WL 313703 (C.D. Cal. Jan. 23, 2012) .................................................................................................................... 18 Grodzitsky v. Am. Honda Motor Co., No. 2:12-CV-1142-SVW-PLA, 2013 WL 690822 (C.D. Cal. Feb. 19, 2013) .............................................................................................................. 16 Guerrero v. Target Corp., 889 F. Supp. 2d 1348 (S.D. Fla. 2012) ................................................................ 11 Hangman Ridge Training Stables, Inc., 105 Wash. 2d 778 (1986) .................................................................................... 11 Hass v. Citizens of Humanity, LLC, No. 14-CV-1404 JLS (WVG), 2016 WL 7097870 (S.D. Cal. Dec. 6, 2016) ................................................................................................................ 24 Herremans v. BMW of N. Am., LLC, No. CV 14-02363 MMM PJWX, 2014 WL 5017843 (C.D. Cal. Oct. 3, 2014) ........................................................................................................ 16 Herron v. Best Buy Co. Inc., 924 F. Supp. 2d 1161 (E.D. Cal. 2013) ......................................................... 14, 16 In re 5-hour ENERGY Mktg. & Sales Practices Litig., No. 13-2438 PSG, 2017 WL 385042 (C.D. Cal. Jan. 24, 2017) ......................... 23 In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prod. Liab. Litig., 754 F. Supp. 2d 1145 (C.D. Cal. 2010) ................................................... 18, 19, 23 Int’l Petroleum Serv., Inc. v. S & N Well Serv., Inc., 230 Kan. 452 (1982) ............................................................................................ 19 Johns v. Bayer Corp., No. 09CV1935DMSJMA, 2010 WL 476688 (S.D. Cal. Feb. 9, 2010) .................................................................................................................... 24 Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 6 of 36 Page ID #:245 DB1/ 90970339.8 vi MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) ......................................................................... 6, 11 Klem v. Wash. Mut. Bank, 176 Wash. 2d 771 (2013) .................................................................................... 21 Knievel v. ESPN, 393 F.3d 1068 (9th Cir. 2005) ............................................................................... 6 Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (2003) ....................................................................................... 22 Licul v. Volkswagen Grp. of Am., Inc., No. 13-61686-CIV, 2013 WL 6328734 (S.D. Fla. Dec. 5, 2013) ....................... 22 LiMandri v. Judkins, 52 Cal. App. 4th 326 (1997) ................................................................................ 17 Lopez v. Washington Mut. Bank, F.A., 302 F.3d 900 (9th Cir. 2002) ............................................................................... 21 Lowe v. Mercedes Benz of N. Am., 103 F.3d 118,1996 WL 694433 (4th Cir. Dec. 5, 1996) ..................................... 19 Lozano v. AT&T Wireless Services, Inc., 504 F.3d 718 (9th Cir. 2007) ............................................................................... 21 Maloney v. Indymac Mortg. Servs., No. CV 13-04781 DDP, 2014 WL 6453777 (C.D. Cal. Nov. 17, 2014) .................................................................................................................... 23 Marcus v. Apple Inc., No. C 14-03824 WHA, 2015 WL 1743381 (N.D. Cal. Apr. 16, 2015) .................................................................................................................... 12 Marriott Int’l, Inc. v. Am. Bridge Bah., Ltd., 193 So. 3d 902 (Fla. 3d DCA 2015) .................................................................... 13 Noell Crane Sys. GmbH v. Noell Crane & Serv., 677 F. Supp. 2d 852 (E.D. Va. 2009) .................................................................. 14 Oestreicher v. Alienware Corp., 544 F. Supp. 2d 964 (9th Cir. 2009) .............................................................. 11, 17 Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 7 of 36 Page ID #:246 DB1/ 90970339.8 vii MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Plastic Packaging Corp. v. Sun Chem. Corp., 136 F. Supp. 2d 1201 (D. Kan. 2001) ........................................................... 13, 14 Polygon Northwest Co. LLC v. Louisiana-Pacific Corp., No. C11-620 MJP, 2012 WL 2504873 (W.D. Wash. June 28, 2012)................. 16 Rhynes v. Stryker Corp., No. 10-5619 SC, 2011 WL 2149095 (N.D. Cal. May 31, 2011) ........................ 22 Seattle Prof’l Eng’g Employees Ass’n v. Boeing Co., 139 Wash. 2d 824 (2000) .................................................................................... 22 Shafer, Kline & Warren, Inc. v. The Allen Grp.-Kansas City, LLC, No. 13-2472-JAR-TJJ, 2014 WL 1974525 (D. Kan. May 15, 2014) ........... 22, 23 Somers v. Apple, Inc., 729 F.3d 953 (9th Cir. 2013) ............................................................................... 10 Sonner v. Schwabe N. Am., Inc., No. EDCV151358VAPSPX, 2017 WL 474106 (C.D. Cal. Feb. 2, 2017) (Phillips, J.) ............................................................................................... 24 Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001) ................................................................................. 6 Stickrath v. Globalstar, Inc., No. C07-1941 TEH, 2008 WL 344209 (N.D. Cal. Feb. 6, 2008) ....................... 17 Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962 (C.D. Cal. 2014) ................................................................. 19 Taragan v. Nissan N. Am., Inc., No. C 09-3660 SBA, 2013 WL 3157918 (N.D. Cal. June 20, 2013).................. 18 Testo v. Russ Dunmire Oldsmobile, Inc., 16 Wash. App. 39 (1976) .................................................................................... 19 TransPetrol, Ltd. v. Radulovic, 764 So. 2d 878 (Fla. 4th DCA 2000) .................................................................. 13 Troup v. Toyota Motor Corp., 545 F. App’x 668 (9th Cir. 2013) ........................................................................ 19 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) ............................................................................... 6 Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 8 of 36 Page ID #:247 DB1/ 90970339.8 viii MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Vivendi SA v. T-Mobile USA Inc., 586 F.3d 689 (9th Cir. 2009) ................................................................................. 7 White v. Potocska, 589 F. Supp. 2d 631 (E.D. Va. 2008) .................................................................. 13 Wilson v. Frito-Lay N. Am., Inc., 961 F. Supp. 2d 1134 (N.D. Cal. 2013)............................................................... 25 Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012) ................................................................. 13, 15, 17 Wolph v. Acer Am. Corp., No. C 09-01314 JSW, 2009 WL 2969467 (N.D. Cal. Sept. 14, 2009) .................................................................................................................... 16 Yagman v. General Motors Co., No. CV-14-4696-MWF, 2014 WL 4177295 (C. D. Cal. Aug. 22, 2014) .................................................................................................................. 8, 9 Zapata Fonseca v. Goya Foods, Inc., No. 16-CV-02559-LHK, 2016 WL 4698942 (N.D. Cal. Sept. 8, 2016) .................................................................................................................... 22 STATUTES AND OTHER AUTHORITIES 15 U.S.C. § 45(n) ...................................................................................................... 21 15 U.S.C. § 2310(a) .................................................................................................. 20 15 U.S.C. § 2310(a)(1) ............................................................................................. 20 15 U.S.C. § 2310(a)(3)(C)(ii) ................................................................................... 20 California Consumer Legal Remedies Act ............................................. 10, 11, 21, 22 California Unfair Competition Law .................................................................. passim Fed. R. Civ. P. 9(b) ....................................................................................... 2, 6, 7, 11 Fed. R. Civ. P. 12(b)(6) .............................................................................................. 5 Federal Trade Commission Act ................................................................................ 21 Fla. Stat. Ann. § 672.314 .......................................................................................... 19 Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 9 of 36 Page ID #:248 DB1/ 90970339.8 ix MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Florida Deceptive & Unfair Trade Practices Act ................................... 10, 11, 13, 21 Kan. Stat. Ann. § 50-626(a)–(b) ......................................................................... 11, 21 Kansas Consumer Protection Act ........................................................... 10, 11, 13, 21 Magnuson-Moss Warranty Act ...................................................................... 2, 20, 21 Song-Beverly Warranty Act ................................................................................. 2, 20 Virginia Consumer Protection Act ............................................................... 10, 11, 13 Washington Consumer Protection Act ................................................... 10, 11, 13, 21 Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 10 of 36 Page ID #:249 DB1/ 90970339.8 1 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES INTRODUCTION Plaintiffs concede in their Complaint that odors from a heating, ventilation and air conditioning system (“HVAC”) can be produced by many different causes unrelated to any design defect in the HVAC system. Odors introduced into the vehicle’s cabin, for example, from outside sources such as exhaust fumes, dirty gym clothes, and take-out food can accumulate in the HVAC system and be released through the air vents. A blocked drainage hose or debris stuck in the HVAC system can cause odors. Outside temperature, along with the frequency and settings of HVAC system usage, can affect the occurrence of odors. Notwithstanding the multiple potential sources of HVAC odors, Plaintiffs assert that the HVAC systems in their vehicles—along with more than 30 different Toyota and Lexus models that Plaintiffs never purchased—contain a design defect that causes the retention of water, leading to odors, and, upon information and belief, mold growth. On this basis, Plaintiffs seek to allege fraud-based and breach of warranty claims against Toyota. The viability of Plaintiffs’ Complaint depends, of course, on the existence of the alleged odor-causing and mold-causing defect in their vehicles; however, Plaintiffs’ conclusory allegations fall far short of pleading such a defect. Plaintiffs’ Complaint pleads no facts that the HVAC system in any Plaintiffs’ vehicle actually retains water, much less has developed any mold growth. Nor can an alleged defect be presumed simply from the existence of odor from Plaintiffs’ HVAC systems, given that Plaintiffs’ own pleading acknowledges that HVAC odor has multiple potential causes unrelated to any design defect. This fundamental pleading failure requires dismissal of Plaintiffs’ Complaint. In addition to the overarching pleading defect, Plaintiffs’ Complaint is deficient in other ways: First, while Plaintiffs’ fraud-based claims arise under different state laws, which vary widely, they each fail because Plaintiffs do not identify a material Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 11 of 36 Page ID #:250 DB1/ 90970339.8 2 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES misrepresentation made by Toyota about their vehicles as required by Rule 9(b). Plaintiffs also fail to identify any factual omission by Toyota that Toyota had a duty to disclose. In this regard, it is undisputed that Toyota discloses information regarding the operation and maintenance of the HVAC system in its owner’s manuals, including the possibility of HVAC odor, thus, negating any failure to disclose theory. In addition, there are no facts showing that Toyota had knowledge—let alone “exclusive” knowledge—of any supposed defect when Plaintiffs purchased their vehicles. Second, Plaintiffs fail to plead a breach of warranty claim. Plaintiffs’ express warranty claim fails because Plaintiffs identify no express warranty other than the written warranties—which are limited to defects in “materials and/or workmanship,” and which excludes design defects. Plaintiffs fail to state an implied warranty of merchantability claim because they do not and cannot allege any facts required to support a finding that their vehicles are not fit for their ordinary purpose of providing transportation. Failure to plead an underlying breach of warranty claim requires dismissal of Plaintiffs’ claims under the Song-Beverly Warranty Act and the Magnuson-Moss Warranty Act. Third, Plaintiffs have not otherwise alleged an “unlawful” or “unfair” claim under state consumer protection laws because they have not alleged a predicate violation and do not attempt to assert an “unfair” business practice. Fourth, Plaintiffs’ equitable claims fail because Plaintiffs have alleged claims that may entitle them to an adequate legal remedy. The factual bases for their equitable claims are entirely duplicative of those legal claims. Finally, Plaintiffs have no standing to pursue their sweeping claims on behalf of a proposed class encompassing more than 30 other vehicle models Plaintiffs did not purchase. In fact, Plaintiffs cannot satisfy even the most flexible test for standing, because Plaintiffs do not allege any facts to plausibly show that the HVAC systems in their vehicles are the same or even similar to the 34 other Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 12 of 36 Page ID #:251 DB1/ 90970339.8 3 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES disparate proposed class vehicles—ranging from a 2006 subcompact car to a 2015 large sports utility vehicle. Toyota should not be subject to a massive discovery fishing expedition regarding vehicles to which Plaintiffs have no connection. I. RELEVANT BACKGROUND A. Summary Of Plaintiffs’ Allegations. Plaintiffs reside in different states and allege they purchased different model Toyota and Lexus vehicles from five different dealerships at different times. Compl. at ¶ 15 (new 2015 Toyota Sienna in Washington); ¶ 17 (new Lexus 2007 350 ES in Virginia); ¶ 19 (new 2014 Toyota Prius in California); ¶ 21 (new 2015 Toyota RAV4 in Kansas); ¶ 23 (new 2011 Toyota Sienna in Florida). Plaintiffs contend that their vehicles contain a “Defective HVAC System,” which they say “emits noxious and foul odors into the vehicles” as well as, “on information and belief . . . mold and other contaminants.” Id. at ¶ 3 (emphasis added). Plaintiffs assert that, on “information and belief, the Defective HVAC System [in their own vehicles] fails to adequately remove water from the evaporator and surrounding enclosure. The moist environment promotes foul odors and microbial growth (mold), which are emitted into the passenger compartment of the Class Vehicles by the blower.” Id. at ¶ 36 (emphasis added); see also id. at ¶ 3. Each Plaintiff contends that he or she purchased his or her vehicle without knowledge of the alleged design defect and “corresponding safety hazard.” Plaintiffs Kennedy, Dey, and the Stockingers contend that they have been “exposed to noxious and foul odors” emitted from their HVAC systems, which “on information and belief, is filled with mold and other contaminants.” Id. at ¶¶ 16, 18, 20 (emphasis added). Even though Plaintiffs have the ability to test for the presence of accumulated water or such “mold” or “other contaminants,” apparently they have not done so and plead no facts to support their conclusory “information and belief” allegations. Plaintiff Flinn does not even allege that she personally experienced “noxious and foul odors” from her HVAC system. Id. at ¶ 22. And Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 13 of 36 Page ID #:252 DB1/ 90970339.8 4 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Plaintiff Casper alleges that unidentified “occupants” experienced such odors, but does not specifically allege that he has experienced any such odors. Id. at ¶ 24. No Plaintiff identifies a specific relevant advertisement or other affirmative representation that he or she reviewed prior to making his or her purchase. Aside from conclusory “information and belief” allegations, no Plaintiff alleges that his or her HVAC system actually retains water or contains mold growth as a result of the purported design defect. No Plaintiff alleges that he or she complained to Toyota about the alleged defect, brought the vehicle in for repair, stopped driving the vehicle, stopped using the HVAC system, or that the HVAC system failed to cool and heat the vehicle. Notwithstanding Plaintiffs’ failure to allege basic facts to support their claims, they seek to represent millions of Toyota and Lexus owners and lessees who own 38 different models spanning 11 model years. Yet Plaintiffs plead no facts to show that the millions of proposed class vehicles share a common HVAC system design, let alone a common design defect causing HVAC odors. B. HVAC Odor May Be Caused By Multiple Factors Unrelated To Any Alleged Design Defect. The plausibility of Plaintiffs’ core legal conclusion—that a common design defect caused the HVAC odor that some of them allegedly experienced—must be considered in light of the fact that HVAC odor may be caused by multiple, independent factors that have nothing to do with any alleged design defect. Indeed, the very documents attached to Plaintiffs’ Complaint provide several alternative sources of HVAC odor unrelated to a design defect, including a “[b]lockage of the evaporator housing drain pipe;” exterior and interior odors, such as air fresheners, animals, dirt, or trash accumulating in the HVAC system; external odors accumulating on the evaporator and released when the evaporator core changes temperature; and debris entering the HVAC system. See Compl. at Exhs. A, B, C, and D. The unverified complaints of third parties referenced in the Complaint Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 14 of 36 Page ID #:253 DB1/ 90970339.8 5 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES further suggest other possible sources of HVAC odor, including wet carpets (id. at p. 23), a stuck A/C drain flap (id.), and usage and environmental factors (id. at p. 27 [the odor “occurs in the summer, in hot months with the AC is used on a daily basis. It does not occur in the winter”]). According to Plaintiffs’ own pleading, therefore, HVAC odor, which is not unique to Toyota or Lexus vehicles,1 has multiple causes unrelated to any alleged design defect. C. The Owner’s Manuals Disclose The Possibility Of HVAC Odor. Not only do multiple causes of HVAC odor exist, but Toyota affirmatively discloses the possibility of HVAC odor to its customers. Each of Plaintiff’s vehicles came with an owner’s manual at the time of purchase. See Declaration of Barry M. Hare (“Hare Decl.”) at ¶ 3; see also Request for Judicial Notice (“RJN”). The owner’s manuals are also available online. Id. With the exception of the manual for Plaintiff Kennedy’s 2007 Lexus ES 350 vehicle (for which the warranty period has long since expired), the owner’s manuals expressly disclose:  Air conditioning odors • During use, various odors from inside and outside the vehicle may enter into and accumulate in the air conditioning system. This may then cause odor to be emitted from the vents. • To reduce potential odors from occurring: It is recommended that the air conditioning system be set to outside air mode prior to turning the vehicle off. Id., e.g., at Exh. 1 [2011 Toyota Sienna owner’s manual excerpt]. II. LEGAL STANDARDS To survive a motion to dismiss under Rule 12(b)(6), Plaintiffs must provide “more than labels and conclusions.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). It is well-settled that “[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Ashcroft v. Iqbal, 556 U.S. 1 Another unverified complaint referenced in Plaintiffs’ Complaint states that “the problem is occurring with other luxury cars (Jaguar, BMW).” Compl. at p. 20. Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 15 of 36 Page ID #:254 DB1/ 90970339.8 6 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES 662, 679 (2009). In doing so, this Court must disregard “legal conclusions” and “conclusory statements,” and must scrutinize the well-pleaded factual allegations to ensure that they are more than “‘merely consistent with’ a defendant’s liability.” Id. at 677–79. Additionally, because Plaintiffs’ Complaint sounds in fraud, it is subject to the heightened pleading standard set forth in Rule 9(b). Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009). Rule 9(b) applies to both misrepresentation and omission claims, and requires the complaint to set forth “‘the who, what, when, where, and how’ of the misconduct charged.” Vess v. Ciba- Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003). In deciding the instant motion, the Court may consider documents subject to judicial notice or “incorporated by reference” into the Complaint. A document is “incorporated by reference” when the “contents are alleged in a complaint” or when “the plaintiff’s claim depends on the contents of a document.”2 Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). The Court need not “accept as true allegations that contradict matters properly subject to judicial notice or by exhibit.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). III. ARGUMENT A. All Claims Fail Because Plaintiffs Do Not Plausibly Allege Any Design Defect That Caused Odors Or Mold in Their Vehicles. Plaintiffs’ Complaint purports to assert claims arising from purported misrepresentations, omissions, and breaches of warranty by Toyota about an alleged defect in their HVAC systems. Thus, the alleged defect must be properly pled in order for Plaintiffs’ Complaint to move forward with respect to all of these 2 Here, Plaintiffs’ owner’s manuals and warranty guides, and the Center for Disease Control (“CDC”) webpage, are expressly referenced and central to Plaintiffs’ omission-based claims and breach of warranty claims. See Compl., e.g., at ¶¶ 31 (referencing owner’s manuals), fn. 11 – 14 (referencing warranty and maintenance guides), 49 (alleging that Toyota failed to “disclose the defect to consumers at the time of purchase or lease of the Class Vehicles (or anytime thereafter) . . .”); fn. 8 (referencing CDC webpage); see also RJN. Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 16 of 36 Page ID #:255 DB1/ 90970339.8 7 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES purported claims. Plaintiffs assert that, on “information and belief,” the alleged design defect causes the retention of moisture, leading to mold growth in and odors from their HVAC systems. See Compl. at ¶ 36. Plaintiffs’ defect-related allegations, however, fall short of meeting the plausibility threshold because (1) Plaintiffs do not plead any specific facts to show the retention of water or the corresponding presence of mold growth in their vehicles; and (2) Plaintiffs fail to allege facts to connect the alleged defect to the odors they have purportedly experienced, which cannot be assumed given the multiple causes of HVAC odor. 1. Plaintiffs fail to plead facts that their vehicles experienced any mold-related safety hazard and they cannot rely upon conclusory “information and belief” allegations to do so. Plaintiffs’ “information and belief” allegations about the retention of water in their own HVAC systems and a corresponding mold-related safety hazard are entirely conclusory. Id. at ¶¶ 3, 36, 37. Plaintiffs allege no facts to support them. Plaintiffs do not allege that they inspected their HVAC systems, tested their vehicles for water retention or mold growth, or experienced abnormal levels of mold in their vehicles. Plaintiffs’ defect theory relies upon the very conclusory statements that Iqbal forbids. See, e.g., Iqbal, 556 U.S. at 681 (allegations that defendant was the “principal architect” of discriminatory policy and that plaintiff was subject to policy “solely on account” of protected characteristics were “conclusory and not entitled to be assumed true”). Plaintiffs’ allegations about a mold-causing defect in their own vehicles are based entirely on “information and belief,” which is insufficient under Iqbal/Twombly and Rule 9(b). Id. at ¶¶ 3, 16, 18, 20, 22, 24, 36, 37; see, e.g., Blantz v. Cal. Dep’t of Corr. & Rehab., 727 F.3d 917, 927 (9th Cir. Cal. 2013) (conclusory allegations on “information and belief” are insufficient to state a claim in the absence of “specific factual allegations regarding [the defendant’s] involvement in the actions giving rise to this lawsuit”); see also Vivendi SA v. T- Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 17 of 36 Page ID #:256 DB1/ 90970339.8 8 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Mobile USA Inc., 586 F.3d 689, 694 (9th Cir. 2009) (holding “information and belief” allegations regarding the defendant’s involvement in the allegedly fraudulent scheme were insufficient under Iqbal/Twombly). For example, Plaintiffs include a picture of an evaporator in their Complaint, asserting on “information and belief” that it is a Lexus evaporator with “evidence of mold growth.” Id. at ¶ 39. But this picture does not purport to be of any of Plaintiffs’ vehicles. The picture of a different vehicle supposedly depicting mold growth underscores Plaintiffs’ failure to conduct a basic inquiry about their own vehicles prior to filing their Complaint, including taking steps to determine if they have any retained water or mold growth in their own HVAC systems, which Plaintiffs claim cause odor. Although allegations on “information and belief” may be considered when the “facts are peculiarly within the possession and control of the defendants, . . . or where the belief is based on factual information that makes the inference of culpability plausible,” these exceptions do not apply here. Arista Records, LLC v. Doe 3, 604 F.3d 110, 120-21 (2d Cir. 2010). The “information and belief” facts are ones that are either known to Plaintiffs or are ascertainable by them. Plaintiffs are in possession of their vehicles and only they can determine whether their HVAC systems retain water or contain mold growth. See Yagman v. General Motors Co., No. CV-14-4696-MWF, 2014 WL 4177295, at *3 (C. D. Cal. Aug. 22, 2014) (dismissing complaint for failing to plausibly allege a defect under Iqbal/Twombly, in part because the “[p]laintiff is in the best position to ascertain the condition of the car engine, which evidently is still in his possession”). Since Plaintiffs’ design defect claims are dependent on the presence of odor produced by accumulated water and mold and Plaintiffs have not pled facts establishing such water or mold, Plaintiffs have failed to plausibly allege a design defect in their vehicles. 2. Plaintiffs fail to plead facts connecting the alleged design defect to the odors they have purportedly experienced. Plaintiffs’ defect theory fails for another reason: the mere existence of odor Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 18 of 36 Page ID #:257 DB1/ 90970339.8 9 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES alleged in Plaintiffs’ vehicles is insufficient. As the Complaint acknowledges, odor can be produced by many different causes. Two cases illustrate the implausibility of odor-causing defect allegations. In Decoteau v. FCA US LLC, No. 215CV00020MCEEFB, 2015 WL 6951296, at *1 (E.D. Cal. Nov. 10, 2015), the court held that the plaintiffs failed to plausibly plead the existence of a defect with their vehicles. The plaintiffs alleged that their vehicles “surge forward or hesitate before taking off from a stop,” “stopped moving while [ ] driving,” and “automatically move backward.” Id. Based on these experiences, the plaintiffs alleged that there must be defects with the transmission causing the described injuries. Id. The court rejected the plaintiffs’ unsupported assertion, holding that plaintiffs “must also plausibly connect the existence of the alleged defect to the injuries they claim to have suffered.” Id. at *3. Similarly, in Yagman, supra, 2014 WL 4177295, at *3, the plaintiff alleged that “the vehicle’s engine stopped running and it experienced a complete electrical shutdown,” and that after “unsuccessful testing by a mechanic at a GM dealership, the engine broke down again.” Id. at *2. The plaintiff argued these allegations were sufficient under Iqbal and Twombly because “a jury could reasonably draw the inference that the vehicle was defective.” Id. The court rejected the plaintiff’s argument, finding he had “only alleged an injury, not a defect.” Id. at *3. The court observed that “a reasonable inference from pleaded facts does not necessarily rise to the level of plausibility. The fact that the engine failed renders it merely possible that a manufacturing defect was the cause . . . .” Id. Like Decoteau and Yagman, Plaintiffs have asserted only an alleged injury— undescribed odors in their vehicles. But the mere presence of odor is insufficient to show a defect, particularly where there are “obvious alternative explanation[s]” of HVAC odor that are completely unrelated to the alleged design defect, including blockages introduced into the drain hoses, interior and exterior odors being brought into the vehicle and accumulating in the HVAC system, usage patterns, and Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 19 of 36 Page ID #:258 DB1/ 90970339.8 10 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES environmental conditions. See Twombly, 550 U.S. at 567 (the presence of an “obvious alternative explanation” precludes finding that the plaintiff has plausibly alleged its claims); see Sec. I.B (describing alternative causes of HVAC odors). Plaintiffs allege no facts that odors in their vehicles are the result of accumulated water or mold in their HVAC systems, as opposed to the many other potential causes. See, e.g., Somers v. Apple, Inc., 729 F.3d 953, 965 (9th Cir. 2013) (affirming dismissal of antitrust claim in part due to obvious alternative explanations for the defendant’s music pricing). Put simply, Plaintiffs have not plausibly alleged a design defect with their HVAC systems, because there are many known, alternative causes of HVAC odor and Plaintiffs allege nothing to link the odor in their vehicles to water or mold accumulation in their HVAC systems. Thus, all of Plaintiffs’ claims fail. B. Plaintiffs’ Fraud-Based Claims Fail For Multiple Reasons. Plaintiffs’ failure to plead the existence of an odor-causing or mold-causing defect is fatal to all of their claims. Additional reasons exist for discussing the various counts in the Complaint. The requirements of Plaintiffs’ claims under the California Consumer Legal Remedies Act (“CLRA”), California Unfair Competition Law (“UCL”), Florida Deceptive & Unfair Trade Practices Act (“FDUTPA”), Kansas Consumer Protection Act (“KCPA”), Virginia Consumer Protection Act (“VCPA”), and Washington Consumer Protection Act (“WCPA”), as well as their fraud and negligent misrepresentation claims, vary from state to state. At a minimum, however, to survive a motion to dismiss, Plaintiffs must identify a specific material misrepresentation or omission that Toyota had a duty to disclose. Because Plaintiffs’ Complaint fails to meet these basic requirements, their fraud-based claims should be dismissed. 1. Plaintiffs have not alleged a misrepresentation by Toyota. Plaintiffs do not identify a single representation—let alone a material Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 20 of 36 Page ID #:259 DB1/ 90970339.8 11 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES misrepresentation—made to them by Toyota about their vehicles or HVAC systems. See Kearns, 567 F.3d at 1125-26 (affirming dismissal of CLRA and UCL claims where the plaintiff failed to plead particular misrepresentation relied upon, when those misrepresentations were made, and by whom); Enomoto v. Space Adventures, Ltd., 624 F. Supp. 2d 443, 456 (E.D. Va. 2009) (fraud is a necessary element to establish a claim under the VCPA); accord Kan. Stat. Ann. § 50-626(a)– (b) (the KCPA requires a misrepresentation of a material fact); accord Hangman Ridge Training Stables, Inc., 105 Wash. 2d 778, 785 (1986) (the WCPA requires an unfair or deceptive act); Guerrero v. Target Corp., 889 F. Supp. 2d 1348, 1355–57 (S.D. Fla. 2012) (dismissing misrepresentation-based claims under FDUTPA because plaintiff relied upon conclusory allegations without providing specific facts). Iqbal/Twombly and Rule 9(b) plainly require more. Moreover, generalized statements like “We’re confident—as you should be—that your Toyota will provide you with many years of enjoyable driving,” are non-actionable puffery. Compl. at ¶ 116; see Oestreicher v. Alienware Corp., 544 F. Supp. 2d 964, 973 (9th Cir. 2009) (“Generalized, vague, and unspecified assertions constitute ‘mere puffery’ . . . and hence are not actionable” (internal citation omitted)). Plaintiffs also plead no details regarding any statements, including if and when each Plaintiff viewed such statements before purchasing their vehicle. Thus, Plaintiffs’ misrepresentation-based claims should be dismissed. 2. Plaintiffs have not identified a material omission by Toyota. Plaintiffs assert in conclusory fashion that Toyota “failed to disclose the existence of the Defective HVAC System,” which they define as an HVAC system “that emits noxious and foul odors” and, “upon information and belief . . . mold and other contaminants.” Compl. at ¶ 3. Yet the possibility of HVAC odor is expressly disclosed in the owner’s manuals accompanying Plaintiffs’ vehicles at the time of purchase. Those owner’s manuals are also available online. See Sec. I.C; see also Hare Decl. at ¶ 3. Regardless of what law applies, disclosure of allegedly omitted Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 21 of 36 Page ID #:260 DB1/ 90970339.8 12 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES information refutes Plaintiffs’ omission-based claims. Courts have dismissed similar claims as a matter of law when the alleged problem associated with the supposed defect is disclosed in user guides or owner’s manuals that are available at the time of purchase, and this Court should do the same here. See Marcus v. Apple Inc., No. C 14-03824 WHA, 2015 WL 1743381, at *2 (N.D. Cal. Apr. 16, 2015) (defendant satisfied any duty to disclose the alleged defect because the potential for laptop to get hot and burn customers was included in the hard-copy user guides included with each laptop sold); Barakezyan v. BMW of N.A., LLC, No. CV1600173SJOGJSX, 2016 WL 2840803, *12 (C.D. Cal. Apr. 7, 2016) (finding that “information about a louder function-noise associated with carbon ceramic brakes was available to Plaintiff pre-purchase” because the defendant “disclosed the potential for brake noise in its owner’s manual,” which the plaintiff “had access to at the dealership before purchase and eventually online”). Further, any assertion that Toyota failed to disclose an alleged mold-related safety hazard fails because Plaintiffs do not allege the existence of any mold growth in their own HVAC systems. See, e.g., Daugherty v. American Honda Motor Co., Inc., 51 Cal. Rptr. 3d 118, 130, n. 8 (2006) (conclusory allegations of safety risks are insufficient when the complaint is “devoid of factual allegations that the alleged defect caused any physical injuries or posed any safety risk”). Plaintiffs also do not attempt to show that any mold in their vehicles is more than what normally exists in the environment or any such level of mold poses a safety risk. See Declaration of David L. Schrader at Exh. 1 [Center for Disease Control, “Basic Facts: Molds in the Environment] (“Molds are found in virtually every environment and can be detected, both indoors and outdoors, year round”); see also RJN. 3. Plaintiffs have not alleged a duty to disclose by Toyota. Plaintiffs’ omission-based claims must be dismissed for another reason. Each of the state laws under which Plaintiffs assert their omission-based claims requires Plaintiffs to show the existence of a duty to disclose—and each generally Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 22 of 36 Page ID #:261 DB1/ 90970339.8 13 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES rejects a broad duty to disclose when the parties are engaged in an arms-length transaction. See Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1141 (9th Cir. 2012) (“California courts have generally rejected a broad duty to disclose . . .”); White v. Potocska, 589 F. Supp. 2d 631, 642 (E.D. Va. 2008) (same under Virginia law); Plastic Packaging Corp. v. Sun Chem. Corp., 136 F. Supp. 2d 1201, 1205 (D. Kan. 2001) (same under Kansas law); TransPetrol, Ltd. v. Radulovic, 764 So. 2d 878, 879 (Fla. 4th DCA 2000) (stating that “[a] defendant’s knowing concealment or non-disclosure of a material fact may only support an action for fraud where there is a duty to disclose”); Favors v. Matzke, 53 Wash. App. 789, 796 (1989) (same under Washington law). Here, Plaintiffs contend that there is an exception to this general “no duty to disclose” rule “because Defendant possessed superior and exclusive knowledge regarding the defect and the hazard associated with the Defective HVAC system.” Compl. at ¶¶ 119 (fraud); 105 (UCL); 209 (FDUTPA); 236 (KCPA); 257 (VCPA); 276 (WCPA). As described below, the state laws applicable to the named Plaintiffs’ omission-based claims differ on this issue.3 Some state laws do not recognize this exception, while others recognize variations of it (and only for certain claims). Nonetheless, even if the law of all applicable states recognized this exception, Plaintiffs have failed to satisfy its requirements. a. Florida law does not have an “exclusive knowledge” exception. As a general matter, the prevailing view under Florida law does not recognize a categorical “exclusive” knowledge exception to fraud-based claims. Marriott Int’l, Inc. v. Am. Bridge Bah., Ltd., 193 So. 3d 902, 908 (Fla. 3d DCA 2015) (dismissing fraud-based claim where there was no fiduciary duty and no 3 Plaintiffs Casper, Flinn, Kennedy, and the Stockingers allege that their claims arise respectively under the laws of Florida, Kansas, Virginia, and Washington. Compl. ¶¶ 202, 224, 248, 269. Plaintiff Dey’s claims are brought under California law, were he resides and purchased his vehicle. Compl. ¶ 19. Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 23 of 36 Page ID #:262 DB1/ 90970339.8 14 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES partial disclosure requiring a further disclosure by the defendant); BCJJ, LLC v. LeFevre, No. 8:09-CV-551-T-17EAJ, 2011 WL 989230, at *7 (M.D. Fla. Mar. 21, 2011) (“In the absence of a fiduciary relationship, the nondisclosure of material facts in an arms-length transaction is not actionable misrepresentation unless Defendant M & I employed an artifice or trick to prevent an independent investigation by Plaintiff BCJJ”). Thus, Plaintiff Casper’s fraud and negligent misrepresentation claims must be dismissed as a matter of law. b. Virginia law recognizes a limited “exclusive knowledge” exception. Under Virginia law, any exception based on exclusive knowledge requires facts to show that the plaintiff exercised reasonable diligence but was unable to discover the alleged omission. See Noell Crane Sys. GmbH v. Noell Crane & Serv., 677 F. Supp. 2d 852, 872-873 (E.D. Va. 2009) (finding no duty to disclose where the plaintiff failed to sufficiently allege a circumstance “where one of the parties has superior knowledge or means of knowledge, ‘which is not within the fair and reasonable reach of the other party and which he could not discover by the exercise of reasonable diligence’”). Plaintiff Kennedy fails to allege facts to satisfy this requirement and, as described below, he also cannot meet the additional requirements to satisfy the “exclusive” knowledge exception. c. Plaintiffs fail to satisfy the elements of the “exclusive knowledge” exception under California, Kansas, and Washington Law. For those state laws that recognize this exception, pleading “exclusive knowledge” requires Plaintiffs to show that Toyota “knew of th[e] defect while plaintiffs did not, and, given the nature of the defect, it was difficult to discover.” Herron v. Best Buy Co. Inc., 924 F. Supp. 2d 1161, 1175 (E.D. Cal. 2013) (internal citations omitted); Plastic Packaging Corp., 136 F. Supp. 2d at 1205 (D. Kan. 2001) (same under Kansas law); Favors, 53 Wash. App. at 796 (same under Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 24 of 36 Page ID #:263 DB1/ 90970339.8 15 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Washington law). Plaintiffs fail to satisfy their burden of establishing this exception for three reasons. First, Plaintiffs fail to allege in the first instance that Toyota knew about any alleged mold-causing or odor-causing defect at the time of Plaintiffs’ purchases. Wilson, 668 F.3d at 1145 (requiring that the “plaintiffs must sufficiently allege that a defendant was aware of a defect at the time of sale to survive a motion to dismiss”). Plaintiffs rely primarily on technical service bulletins (“TSBs”) to establish Toyota’s knowledge (Compl. at ¶¶ 53-62), but TSBs are routine communications to dealerships; they do not reflect knowledge of a defect. See Am. Honda Motor Co. v. Sup. Ct., 199 Cal. App. 4th 1367, 1378 (2011) (“A TSB is not and cannot fairly be construed by a trial court as an admission of a design or other defect, because TSB’s are routinely issued to dealers to help diagnose and repair typical complaints”). Moreover, although the TSBs cited by Plaintiffs acknowledge and describe potential sources of HVAC odors, none of the TSBs show that Toyota was aware, let alone possessed any “exclusive” knowledge, of any alleged design defect—that is, the retention of water in the HVAC systems that causes mold growth and odors. Several TSBs attached by Plaintiffs also involve vehicle models other than those owned by Plaintiffs. See Compl. at Exh. A [May 9, 1997 TSB re: Air Conditioning Evaporator Odor addressing vehicles not at issue in Plaintiffs’ Complaint]; Exh. B [Nov. 29, 2011 TSB re: HVAC Odor involving Toyota Camrys]. See, e.g., Fisher v. Honda N. Am., No. LA CV13-09285 JAK, 2014 WL 2808188, at *6 (C.D. Cal. June 12, 2014) (finding TSBs insufficient to support an inference of knowledge because three of the TSBs did not relate to the one model of vehicle at issue, and while only one TSB related to a model of the alleged class vehicle, it did not refer to the defect at issue). Second, Plaintiffs also attempt to show knowledge based on a handful of unverified and undescribed consumer complaints to NHTSA spanning 15 years, as Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 25 of 36 Page ID #:264 DB1/ 90970339.8 16 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES well as conclusory allegations about unidentified “pre-production testing, pre- production design failure mode analysis, production design failure mode analysis, early consumer complaints made to Defendant’s network of exclusive dealers, aggregate warranty data compiled from those dealers, repair order and parts data received from the dealers, consumer complaints to dealers and NHTSA, and testing performed in response to consumer complaints.” Compl. ¶ 50-52, 62. These allegations are insufficient to show exclusive knowledge. See Grodzitsky v. Am. Honda Motor Co., No. 2:12-CV-1142-SVW-PLA, 2013 WL 690822, at *6 (C.D. Cal. Feb. 19, 2013) (finding insufficient complaint alleging knowledge based on “pre-release testing data, early consumer complaints to Honda and dealers, testing done in response to complaints, replacement part sales data, aggregate data from Honda dealers, and other internal sources”); see also Herremans v. BMW of N. Am., LLC, No. CV 14-02363 MMM PJWX, 2014 WL 5017843, at *17 (C.D. Cal. Oct. 3, 2014) (same); see also Polygon Northwest Co. LLC v. Louisiana-Pacific Corp., No. C11-620 MJP, 2012 WL 2504873, at *6 (W.D. Wash. June 28, 2012) (holding that the “mere existence of other customers having filed warranty claims does not suggest LP knew the Rockwell siding was defective”). Third, Plaintiffs’ own allegations refute their assertion that Toyota had “exclusive” knowledge about HVAC odor and its underlying source; indeed, Plaintiffs identify numerous publicly available sources about the possibility of HVAC odor, including NHTSA complaints and websites addressing HVAC odor (i.e., Compl. at n. 7, citing the CARSPEC website). See, e.g., Herron, 924 F. Supp. 2d at 1175 (failing to plead “exclusive” knowledge where the plaintiff “could have readily recognized any deficiencies in his Laptop’s battery life” because of publicly available information); see Wolph v. Acer Am. Corp., No. C 09-01314 JSW, 2009 WL 2969467, at *4 (N.D. Cal. Sept. 14, 2009) (no exclusivity because “[b]ased on Plaintiffs[’] own allegations” information about the purportedly omitted fact was publicly available). Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 26 of 36 Page ID #:265 DB1/ 90970339.8 17 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Moreover, Toyota disclosed the possibility of HVAC odor in nearly all of the owner’s manuals for the Plaintiffs’ vehicles—which were provided to Plaintiffs at the time of purchase and available online. See Hare Decl. at Exhs. 1–4. Simply put, Toyota did not have “exclusive” knowledge regarding the potential for HVAC odor since it disclosed this very information. See Stickrath v. Globalstar, Inc., No. C07-1941 TEH, 2008 WL 344209, at *4 (N.D. Cal. Feb. 6, 2008) (no exclusivity where the defendant disclosed purportedly omitted information “in public filings” and in “an application with the FCC”). d. Plaintiff Dey cannot satisfy any unique exceptions triggering a duty to disclose under California law. California consumer protection laws also require that the duty to disclose be tied to “a safety issue.” Wilson, 668 F.3d at 1141; see also Oestreicher, 544 F. Supp. 2d at 971 (rejecting duty to disclose because alleged defect did not involve a safety issue).4 As described above, Plaintiffs fail to allege a safety issue arising from the alleged defect. Thus, no Plaintiff has alleged a duty to disclose under California consumer protection laws. Further, to the extent Plaintiff Dey (or any other Plaintiff) attempts to establish a duty to disclose based on any “active concealment” by Toyota of the alleged defect, this exception also fails. Although California recognizes an “active concealment” exception, see LiMandri v. Judkins, 52 Cal. App. 4th 326, 336 (1997), Plaintiff Dey has not alleged any facts that Toyota “actively concealed” or “‘sought to suppress information in the public domain or obscure the consumers’ 4 No duty to disclose non-safety related defects that manifest during the warranty period exists under California law. Wilson, 668 F.3d at 1141 (“manufacturer’s duty to consumers is limited to its warranty obligations absent either an affirmative misrepresentation or a safety issue”). Unless the product presents a safety risk, the plaintiff must avail himself or herself of the remedies available through the applicable warranty, as mandated by the California UCC. To create a different duty to disclose during the warranty period would eviscerate the parties’ contractual relationship—and the bargained-for rights and remedies in that warranty. Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 27 of 36 Page ID #:266 DB1/ 90970339.8 18 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES ability’ to discover it.” Taragan v. Nissan N. Am., Inc., No. C 09-3660 SBA, 2013 WL 3157918, at *7 (N.D. Cal. June 20, 2013) (quoting Gray v. Toyota Motor Sales, U.S.A., No. CV 08-1690 PSG JCX, 2012 WL 313703, at *9 (C.D. Cal. Jan. 23, 2012) (holding that “mere nondisclosure” does not constitute “active concealment”)). Indeed, the disclosures about the potential for HVAC odor in the owner’s manuals negates the plausibility of any “active concealment” theory. C. Plaintiffs Fail To State Breach Of Warranty Claims. 1. Plaintiffs’ breach of express warranty claims fail for multiple reasons. Plaintiffs’ express warranty claims are based solely on the “Toyota New Vehicle Limited Warranty” and the “Lexus Basic Warranty.” Compl. at ¶ 38. As Plaintiffs acknowledge, however, these written warranties cover only defects in “materials and/or workmanship,” which excludes design defects.5 See Bros.v. Hewlett–Packard Co., No. C-06-02254, 2007 WL 485979, at *4 (N.D. Cal. Feb. 12, 2007) (“Unlike defects in materials or workmanship, a design defect is manufactured in accordance with the product’s intended specifications”). Courts routinely dismiss breach of express warranty claims based on a design defect when the warranty covers only defects in “materials and/or workmanship.” See In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prod. Liab. Litig., 754 F. Supp. 2d 1145, 1180-81 (C.D. Cal. 2010) (dismissing claim because warranty guaranteeing against “materials and workmanship” did not extend to design defects); see also Gertz v. Toyota Motor Corp., No. CV 10-1089, 2011 WL 3681647, at *3 (C.D. Cal. Aug. 22, 2011) (same). Moreover, regardless of the type of defect at issue, a manufacturer is “not liable for breach of express warranty merely because a product manifests recurring 5 Plaintiffs occasionally reference a “manufacturing defect” in their Complaint, but allege no facts to support this assertion. It is clear that Plaintiffs’ Complaint is limited to an alleged design defect with Plaintiffs’ HVAC systems. See, e.g., Compl. at ¶¶ 7, 16, 18, 20, 24. Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 28 of 36 Page ID #:267 DB1/ 90970339.8 19 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES failures during the warranty period. Rather, the question is whether [a plaintiff] sought repairs, refunds, or replacements and, if so, whether [the manufacturer] responded appropriately under the warranty.” Coe v. Philips Oral Healthcare Inc., No. C13-518-MJP, 2014 WL 722501, at *7 (W.D. Wash. Feb. 24, 2014) (dismissing breach of express warranty claim because the plaintiffs did not allege that they exercised the warranty or that the defendant responded inappropriately). Because no Plaintiff alleges that he or she sought repairs of the alleged defect during the warranty period, the claims must be dismissed. See, e.g., In re Toyota Motor Corp., 754 F. Supp. 2d at 1179 (applying rule). 2. Plaintiffs’ breach of implied warranty of merchantability claims fail for multiple reasons. “[I]n the case of automobiles, the implied warranty of merchantability can be breached only if the vehicle manifests a defect that is so basic it renders the vehicle unfit for its ordinary purpose of providing transportation.” Am. Suzuki Motor Corp. v. Sup. Ct., 37 Cal. App. 4th 1291, 1296 (1995) (citation omitted); accord Testo v. Russ Dunmire Oldsmobile, Inc., 16 Wash. App. 39, 44 (1976) (same under Washington law); accord Lowe v. Mercedes Benz of N. Am., 103 F.3d 118,1996 WL 694433, at *4 (4th Cir. Dec. 5, 1996) (same under Virginia law); accord Fla. Stat. Ann. § 672.314 (products need only be “fit for ordinary purpose[] for which such goods are used”). The implied warranty of merchantability does not require an automobile to be “perfect in every detail so long as it ‘provides for a minimum level of quality.’” Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962, 980 (C.D. Cal. 2014) (citation omitted); accord Int’l Petroleum Serv., Inc. v. S & N Well Serv., Inc., 230 Kan. 452, 454 (1982) (same under Kansas law); see also Troup v. Toyota Motor Corp., 545 F. App’x 668, 669 (9th Cir. 2013) (affirming dismissal of implied warranty claim because “alleged defect did not compromise the vehicle’s safety, render it inoperable, or drastically reduce its mileage range”). Plaintiffs’ conclusory allegation that their vehicles “were not fit for the Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 29 of 36 Page ID #:268 DB1/ 90970339.8 20 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES ordinary purpose of providing safe and reliable transportation” is insufficient under Iqbal/Twombly to support a breach of implied warranty of merchantability claim. Compl. at ¶ 156. Plaintiffs do not contend that they cannot use or have stopped using their vehicles—or even their HVAC systems—because of the alleged defect. Plaintiffs do not allege that their HVAC systems have failed to heat and cool their vehicles. Thus, their claims should be dismissed. 3. Plaintiffs’ MMWA and California statutory warranty claims fail as a matter of law. Plaintiff Dey’s Song-Beverly Act and Plaintiffs’ Magnuson-Moss Warranty Act (“MMWA”) claims should be dismissed because Plaintiffs fail to allege a breach of implied or express warranty under any state law. See Birdsong v. Apple, Inc., 590 F.3d 955, 958, n. 2 (9th Cir. 2009) (dismissing Song-Beverly Act and MMWA claims because no state law warranty claim had been pled). Plaintiffs’ MMWA claim also fails because Plaintiffs do not allege that they availed themselves of Toyota’s informal dispute resolution procedures, as required by 15 U.S.C. § 2310(a). The MMWA contains an explicit congressional policy statement encouraging “warrantors to establish procedures whereby consumer disputes are fairly and expeditiously settled through informal dispute settlement mechanisms.” Id. § 2310(a)(1). Pursuant to this policy, a “class of consumers may not proceed in a class action . . . unless the named plaintiffs . . . initially resort to [the warrantor’s informal dispute settlement mechanism].” Id. § 2310(a)(3)(C)(ii). Here, all of Plaintiffs’ vehicles are subject to warranty manuals with a “Dispute Settlement Program.” Hare Decl. at Exhs. 5–9 [Toyota and Lexus warranty manuals contain a “Dispute Settlement Program”]. Plaintiffs do not and cannot allege that they went through this dispute resolution program. D. Plaintiffs Also Fail To State A Claim Under The “Unlawful” And “Unfair” Prongs of State Consumer Protection Laws. Plaintiff Dey’s “unlawful” UCL claim fails because he has not pled a Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 30 of 36 Page ID #:269 DB1/ 90970339.8 21 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES predicate legal violation under the CLRA, Song-Beverly Act, or MMWA. See Compl. at ¶ 102; Lopez v. Washington Mut. Bank, F.A., 302 F.3d 900, 907 (9th Cir. 2002) (requiring violation of a predicate law to support an “unlawful” UCL claim). Plaintiff Dey also fails to allege a claim under the “unfair” prong of the UCL. In order for a business act to be considered “unfair,” it “must be tethered to some legislatively declared policy or proof of some actual or threatened impact on competition.” Cel-Tech Comm., Inc., v. Los Angeles Cell. Tel. Co., 20 Cal. 4th 163, 187 (1999); see Lozano v. AT&T Wireless Services, Inc., 504 F.3d 718, 736 (9th Cir. 2007) (rejecting the three part Federal Trade Commission Act (“FTCA”) test in consumer cases). The Complaint is devoid of any allegations required for an “unfair” UCL claim, and thus this claim should be dismissed. The WCPA and FDUPTA follow the FTCA’s definition of “unfair,” which exists when a practice “causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and is not outweighed by countervailing benefits.” Klem v. Wash. Mut. Bank, 176 Wash. 2d 771, 787 (2013) (quoting 15 U.S.C. § 45(n)); accord Adelson v. U.S. Legal Support, Inc., 715 F. Supp. 2d 1265, 1277 (S.D. Fla. 2010). Plaintiffs Casper and the Stockingers do not even attempt to plead the elements of this theory. Thus, their claims under the WCPA and FDUPTA, respectively, should be dismissed.6 E. Plaintiffs’ Equitable Claims Fail Because They Have Not Established That There is No Adequate Remedy at Law Available. Plaintiffs seek equitable relief in the form of restitution and injunctive relief through their state law consumer protection claims and “claims” for unjust enrichment. See Compl. at ¶¶ 95, 111, 184, 221, 245, 265, 284. These claims for equitable relief fail for several fundamental reasons. First, “it is axiomatic that a court should determine the adequacy of damages 6 The KCPA has no “unfair” prong; instead, it prohibits a supplier from engaging in “any deceptive act or practice.” K.S.A. § 50-626(a). Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 31 of 36 Page ID #:270 DB1/ 90970339.8 22 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES at law before resorting to equitable relief.” See Franklin v. Gwinnett Cnty. Pub. Sch., 503 U.S. 60, 62 (1992). “Where the claims pleaded by a plaintiff may entitle her to an adequate remedy at law, equitable relief is unavailable.” Rhynes v. Stryker Corp., No. 10-5619 SC, 2011 WL 2149095, at *4 (N.D. Cal. May 31, 2011) (emphasis added); accord Licul v. Volkswagen Grp. of Am., Inc., No. 13-61686- CIV, 2013 WL 6328734, at *7 (S.D. Fla. Dec. 5, 2013) (Florida law); accord Shafer, Kline & Warren, Inc. v. The Allen Grp.-Kansas City, LLC, No. 13-2472- JAR-TJJ, 2014 WL 1974525, at *2 (D. Kan. May 15, 2014) (Kansas law); accord Seattle Prof’l Eng’g Employees Ass’n v. Boeing Co., 139 Wash. 2d 824, 839 (2000) (Washington law). Here, Plaintiffs allege they are entitled to an adequate legal remedy through their breach of warranty, fraud, and statutory consumer protection claims, which may entitle them to damages. See Compl., e.g., at ¶¶ 124, 147, 159, 198, 220, 244, 265, 283. Thus, the Complaint does not and cannot sufficiently allege that an adequate legal remedy is not available. Durkee v. Ford Motor Co., No. C 14-0617 PJH, 2014 WL 4352184, at *2 (N.D. Cal. Sept. 2, 2014). Second, Plaintiffs’ claims for equitable relief fail because they allege no distinction between the factual basis for their claims seeking equitable remedies and their claims seeking legal remedies. See Zapata Fonseca v. Goya Foods, Inc., No. 16-CV-02559-LHK, 2016 WL 4698942, * 7 (N.D. Cal. Sept. 8, 2016) (because the plaintiff’s claims seeking equitable relief “‘rel[ied] upon the same factual predicates as . . . [the] [p]laintiff’s legal causes of action’ . . . they must be dismissed”). Accordingly, Plaintiffs’ requests for equitable relief, including their UCL, CLRA, and unjust enrichment claims, should be dismissed.7 Third, Plaintiffs’ claims for unjust enrichment (Compl. at ¶¶ 179 – 185) must be dismissed because Plaintiffs allege the existence and enforceability of an express contract and unjust enrichment is unavailable to redefine that relationship. See 7 The UCL only allows for equitable remedies. See Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 (2003). Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 32 of 36 Page ID #:271 DB1/ 90970339.8 23 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Maloney v. Indymac Mortg. Servs., No. CV 13-04781 DDP, 2014 WL 6453777, *7 (C.D. Cal. Nov. 17, 2014) (applying rule); see also Brown v. Transurban USA. Inc., 144 F. Supp. 3d 809, 844 (E.D. Va. 2015) (“[A] condition precedent to the assertion of . . . a[n] [unjust enrichment] claim is that no express contract exists between the parties”) (internal citation omitted); Shafer, Kline & Warren, Inc., 2014 WL 1974525, at *2 (same under Kansas law); Diamond “S” Dev. Corp. v. Mercantile Bank, 989 So. 2d 696, 697 (Fla. 5th DCA 2008) (same under Florida law); Chandler v. Wash. Toll Bridge Authority, 17 Wash. 2d 591, 605 (1943) (same under Washington law). Lastly, Plaintiff Dey’s unjust enrichment “claim” should be dismissed because no independent cause of action for unjust enrichment exists under prevailing California law. See In re Toyota Motor Corp., 754 F. Supp. 2d at 1193- 94 (“Simply put, ‘there is no cause of action in California for unjust enrichment’”); accord Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015). F. Plaintiffs Do Not Have Standing To Pursue Claims Regarding Vehicles They Did Not Purchase. In the Ninth Circuit, there “is no controlling authority on whether Plaintiffs have standing to sue for products that they did not purchase.” In re 5-hour ENERGY Mktg. & Sales Practices Litig., No. 13-2438 PSG (PLAX), 2017 WL 385042, at *13 (C.D. Cal. Jan. 24, 2017). Courts have taken two different approaches—both of which apply significant standing limits on named plaintiffs who seek to pursue class claims based upon products that they themselves did not purchase. These limits help ensure that a company is not subject to burdensome class-wide discovery regarding products which have no connection to the Plaintiffs. Plaintiffs lack standing under both approaches. Under one line of authority, when a plaintiff asserts class claims “based both on products that she purchased and products that she did not purchase, claims relating to products not purchased by the named Plaintiffs “must be dismissed for Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 33 of 36 Page ID #:272 DB1/ 90970339.8 24 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES lack of standing.” Granfield v. NVIDIA Corp., No. C 11-05403JW, 2012 WL 2847575, at *6 (N.D. Cal. July 11, 2012) (emphasis added); Carrea v. Dreyer’s Grand Ice Cream, Inc., No. C 10-01044 JSW, 2011 WL 159380, at *3 (N.D. Cal. Jan. 10, 2011) (applying principle); Johns v. Bayer Corp., No. 09CV1935DMSJMA, 2010 WL 476688, *4–5 (S.D. Cal. Feb. 9, 2010) (same). Plaintiffs clearly cannot satisfy this standard. Plaintiffs allege that they purchased four vehicle models (a Toyota Sienna, a Lexus 350 ES, a Toyota Prius, and a Toyota RAV4). Thus, Plaintiffs lack standing to pursue claims regarding the 34 other makes and models of Toyota and Lexus vehicles that they did not purchase. A second line of authority recognizes that a plaintiff “may have standing to assert claims for unnamed class members based on products he or she did not purchase so long as the products and alleged misrepresentations are substantially similar.” Brown v. Hain Celestial Grp., Inc., 913 F. Supp. 2d 881, 890 (N.D. Cal. 2012) (emphasis added). This Court recently applied this standard in the context of class certification. Sonner v. Schwabe N. Am., Inc., No. EDCV151358VAPSPX, 2017 WL 474106, at *3 (C.D. Cal. Feb. 2, 2017) (Phillips, J.); see also Hass v. Citizens of Humanity, LLC, No. 14-CV-1404 JLS (WVG), 2016 WL 7097870, at *7 (S.D. Cal. Dec. 6, 2016) (dismissing claims based upon products plaintiff did not purchase because no facts showing “those products and their labels are substantially similar to the Ingrid brand jeans Plaintiff purchased”). Even under a “substantially similar” standard, Plaintiffs lack standing to pursue claims on behalf of the vehicles they never purchased. Plaintiffs seek to engage in a massive class-wide discovery fishing expedition based upon the naked and insufficient legal conclusion that all 38 models of Toyota and Lexus vehicles— ranging from subcompact cars to large sports utility vehicles and spanning 11 model years—have the same alleged defect. But Plaintiffs fail to allege a single fact about the other 34 vehicles they never purchased—much less that those vehicles have the same, or even similar, HVAC systems to the specific models Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 34 of 36 Page ID #:273 DB1/ 90970339.8 25 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Plaintiffs purchased. Indeed, Plaintiffs’ very pleading shows the opposite; the October 17, 2013 Safety Recall for HVAC Assembly—which has nothing to do with HVAC odor—states that only certain Avalon, Camry, and Venza vehicles are covered by the recall because “[t]he HVAC assembly used on other vehicles is of a different design.” Compl. at Exh. E. See e.g. Wilson v. Frito-Lay N. Am., Inc., 961 F. Supp. 2d 1134, 1142 (N.D. Cal. 2013) (dismissing claims regarding unpurchased products with prejudice because the court “will not assume that each of these subtly different Products is like all the others” and plaintiffs “have to say more, especially when they are asserting standing as to Products they did not purchase—otherwise their pleadings amount to unacceptably bare legal conclusions”). Likewise, because Plaintiffs do not allege any facts about the marketing of the other 34 different vehicles they never purchased, Plaintiffs do not and cannot show that any unidentified misrepresentations or omissions they rely upon were uniform across the sale of those disparate vehicles—which took place at different times and dealerships across the country. Put simply, Plaintiffs lack standing to bring claims for injuries regarding vehicles about which they have asserted no facts and to which they have no connection. Plaintiffs should not be entitled to engage in a class-wide discovery fishing expedition over such claims based on a sweeping and conclusory allegation of a supposed common defect. Although all of Plaintiffs’ claims should be dismissed in this action, at a minimum, the Court should dismiss the claims as to models not purchased by the named Plaintiffs. IV. CONCLUSION For the foregoing reasons, Toyota respectfully requests the Court grant this motion to dismiss Plaintiffs’ Complaint. Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 35 of 36 Page ID #:274 DB1/ 90970339.8 26 MEMORANDUM IN SUPPORT OF TOYOTA’S MOTION TO DISMISS 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 MORGAN, LEWIS & BOCKIUS LLP ATTORNEYS AT LAW LOS ANGELES Dated: March 3, 2017 MORGAN, LEWIS & BOCKIUS LLP David L. Schrader Esther K. Ro Jahmy S. Graham By /s/ David L. Schrader David L. Schrader Attorneys for Defendant Toyota Motor Sales, U.S.A., Inc. Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 36 of 36 Page ID #:275 [PROPOSED] ORDER GRANTING TOYOTA’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE 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 DB1/ 90809597.1 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA PAUL STOCKINGER, ELIZABETH STOCKINGER, GAILYN KENNEDY, BASUDEB DEY, BRENDA FLINN, and ELIEZER CASPER on behalf of themselves and all others similarly situated, Plaintiffs, vs. TOYOTA MOTOR SALES, U.S.A., INC., a California corporation, Defendant. Case No. 2:17-cv-00035-VAP (KSx) [PROPOSED] ORDER GRANTING TOYOTA MOTOR SALES, U.S.A., INC.’S MOTION TO DISMISS PLAINTIFFS’ CLASS ACTION COMPLAINT AND REQUEST FOR JUDICIAL NOTICE Date: April 3, 2017 Time: 2:00 p.m. Judge: Hon. Virginia A. Phillips Ctrm.: 8A Case 2:17-cv-00035-VAP-KS Document 28-2 Filed 03/03/17 Page 1 of 8 Page ID #:276 DB1/ 90809597.1 1 [PROPOSED] ORDER GRANTING TOYOTA’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE 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 Pending before this Court is the motion of Defendant Toyota Motor Sales, U.S.A., Inc. (“Toyota”) to dismiss the Class Action Complaint (“Complaint”), filed by Plaintiffs Paul Stockinger, Elizabeth Stockinger, Gailyn Kennedy, Basudeb Dey, Brenda Flinn, and Eliezer Casper (collectively, “Plaintiffs”), pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure and request for judicial notice in support thereof. After full consideration of the moving and opposing papers of all parties, supporting declarations and exhibits, the arguments of counsel, and all other matters presented to the Court, IT IS HEREBY ORDERED that: Toyota’s motion to dismiss the Complaint is GRANTED WITHOUT LEAVE TO AMEND. Plaintiffs have failed to state a claim against Toyota upon which relief may be granted for any of their purported causes of action under: (1) California Consumer Legal Remedies Act, Cal. Civ. Code § 1750, et seq. (“CLRA”), (2) California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq. (“UCL”), (3) Fraud, (4) Negligent Misrepresentation, (5) Breach of Express Warranty, (6) Breach of Implied Warranty, (7) Violation of the Magnuson- Moss Warranty Act, 15 U.S.C. § 2301, et seq., (8) Violation of the Song-Beverly Consumer Warranty Act, Cal. Civ. Code § 1791, et seq., (9) Unjust Enrichment, (10) Violation of the Florida Unfair & Deceptive Trade Practices Act., Fla. Stat. § 501.201, et seq., (11) Violation of the Kansas Consumer Protection Act, Kan. Stat. Ann. § 50-623, et seq., (12) Violation of the Virginia Consumer Protection Act, Va. Code Ann. § 59.1-196, et seq., and (13) Violation of the Washington Consumer Protection Act, RCW 19.86, et seq. Plaintiffs fail to allege a defect with their own HVAC systems that is causing the odors complained of. Plaintiffs’ allegations on “information and belief” are insufficient to allege a defect with their vehicles. Blantz v. Cal. Dep’t of Corr. & Rehab., 727 F.3d 917, 927 (9th Cir. 2013) (conclusory allegations on “information and belief” were insufficient to state a claim in the absence of “specific factual allegations regarding [the defendant’s] involvement in the actions giving rise to this Case 2:17-cv-00035-VAP-KS Document 28-2 Filed 03/03/17 Page 2 of 8 Page ID #:277 DB1/ 90809597.1 2 [PROPOSED] ORDER GRANTING TOYOTA’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE 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 lawsuit”). The facts that Plaintiffs plead on “information and belief” are ones that are either known to Plaintiffs or are ascertainable by them. Plaintiffs are in possession of their vehicles and whether their HVAC systems retain water or contain mold growth is ascertainable by them. See Yagman v. General Motors Co., No. CV-14-4696-MWF AGRX, 2014 WL 4177295, at *3 (C. D. Cal. Aug. 22, 2014) (dismissing complaint for failing to plausibly allege a defect under Iqbal/Twombly, in part because the “[p]laintiff is in the best position to ascertain the condition of the car engine, which evidently is still in his possession”). Absent such factual allegations, the Court cannot conclude that Plaintiffs have plausibly alleged a design defect in their vehicles. Plaintiffs’ defect-related allegations fail for another reason. Although Plaintiffs allege the existence of odor, they do not plead any facts to support that the alleged defect causes odors from their HVAC systems. This failure is critical because absent causation, Plaintiffs have not sufficiently pled that their HVAC systems contain the alleged defect. Decoteau v. FCA US LLC, No. 215CV00020MCEEFB, 2015 WL 6951296, at *1 (E.D. Cal. Nov. 10, 2015); Yagman, supra, 2014 WL 4177295, at *3. The foregoing failures require dismissal of Plaintiffs’ Complaint in its entirety. Plaintiffs’ fraud-based claims fail because Plaintiffs do not identify a material misrepresentation made by Toyota about their vehicles or HVAC systems. See, e.g., Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009). Similarly, Plaintiffs fail to identify a fact omitted by Toyota and that Toyota had a duty to disclose this fact. See Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1141 (9th Cir. 2012) (observing that “California courts have generally rejected a broad duty to disclose . . .”); White v. Potocska, 589 F. Supp. 2d 631, 642 (E.D. Va. 2008) (same under Virginia law); Plastic Packaging Corp. v. Sun Chem. Corp., 136 F. Supp. 2d 1201, 1205 (D. Kan. 2001) (same under Kansas law); TransPetrol, Ltd. v. Case 2:17-cv-00035-VAP-KS Document 28-2 Filed 03/03/17 Page 3 of 8 Page ID #:278 DB1/ 90809597.1 3 [PROPOSED] ORDER GRANTING TOYOTA’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE 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 Radulovic, 764 So. 2d 878, 879 (Fla. 4th DCA 2000) (stating that “[a] defendant’s knowing concealment or non-disclosure of a material fact may only support an action for fraud where there is a duty to disclose”); Favors v. Matzke, 53 Wash. App. 789, 796 (1989) (“[T]he rule has always been that silence as to the material facts is not fraud where there is no duty to disclose”). Moreover, it is undisputed that Toyota discloses the possibility of HVAC odor in its owner’s manuals, which undermines any allegation of a failure to disclose, let alone “exclusive” knowledge or “active concealment” by Toyota. Herron v. Best Buy Co. Inc., 924 F. Supp. 2d 1161, 1175 (E.D. Cal. 2013) (“exclusive” knowledge requires plaintiffs to show that Toyota “knew of th[e] defect while plaintiffs did not, and, given the nature of the defect, it was difficult to discover”); Plastic Packaging Corp., 136 F. Supp. 2d at 1205 (D. Kan. 2001) (same under Kansas law); Favors, 53 Wash. App. at 796 (same under Washington law); Taragan v. Nissan N. Am., Inc., No. C 09-3660 SBA, 2013 WL 3157918, at *7 (N.D. Cal. June 20, 2013) (quoting Gray v. Toyota Motor Sales, U.S.A., No. CV 08-1690 PSG JCX, 2012 WL 313703, at *9 (C.D. Cal. Jan. 23, 2012) (holding that “mere nondisclosure” does not constitute “active concealment” under California law). Plaintiffs fail to plead a breach of warranty claim. Plaintiffs’ breach of express warranty claim fails because the written warranty is limited to defects in “materials and/or workmanship” and does not cover design defects. See In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prod. Liab. Litig., 754 F. Supp. 2d 1145, 1180-81 (C.D. Cal. 2010). Plaintiffs’ breach of warranty claims fail for another reason, too. Regardless of the type of defect at issue, a manufacturer is “not liable for breach of express warranty merely because a product manifests recurring failures during the warranty period. Rather, the question is whether [a plaintiff] sought repairs, refunds, or replacements and, if so, whether [the manufacturer] responded appropriately under the warranty.” Coe v. Philips Oral Healthcare Inc., No. C13-518-MJP, 2014 WL 722501, at *7 (W.D. Case 2:17-cv-00035-VAP-KS Document 28-2 Filed 03/03/17 Page 4 of 8 Page ID #:279 DB1/ 90809597.1 4 [PROPOSED] ORDER GRANTING TOYOTA’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE 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 Wash. Feb. 24, 2014) (dismissing breach of express warranty claim because the plaintiffs did not allege that they exercised the warranty or that the defendant responded inappropriately”), citing Kent v. Hewlett-Packard Co., No. 09-5341 JF PVT, 2010 WL 2681767, at *10 (N.D. Cal. July 6, 2010). Plaintiffs also fail to plead a breach of the implied warranty of merchantability because their vehicles are fit for their ordinary purpose of providing transportation. See Troup v. Toyota Motor Corp., 545 F. App’x 668, 669 (9th Cir. 2013); accord Lowe v. Mercedes Benz of N. Am., 103 F.3d 118,1996 WL 694433, at *4 (4th Cir. Dec. 5, 1996) (dismissing implied warranty claim as the vehicle was “in compliance because it was at all times fit and used for its ordinary purpose – transportation”). The failure to plead an underlying breach of warranty claim requires dismissal of Plaintiffs’ claims under the Song-Beverly Warranty Act and the Magnuson-Moss Warranty Act. See Birdsong v. Apple, Inc., 590 F.3d 955, 958, n. 2 (9th Cir. 2009). Further, Plaintiffs’ failure to avail themselves of Toyota’s information dispute resolution procedures as required by 15 U.S.C. § 2310(a) requires dismissal of Plaintiffs’ Magnuson-Moss Warranty Act claim. Plaintiffs fail to otherwise allege an “unlawful” or “unfair” business practices that would give rise to any state consumer protection claim. See Lopez v. Washington Mut. Bank, F.A., 302 F.3d 900, 907 (9th Cir. 2002) (requiring violation of a predicate law to support an “unlawful” UCL claim); see also Cel-Tech Comm., Inc., v. Los Angeles Cell. Tel. Co., 20 Cal. 4th 163, 187 (1999) (finding that in order for a business act to be considered “unfair,” it “must be tethered to some legislatively declared policy or proof of some actual or threatened impact on competition”). The WCPA and FDUPTA follow the FTCA’s definition of “unfair,” which exists when a practice “causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and is not outweighed Case 2:17-cv-00035-VAP-KS Document 28-2 Filed 03/03/17 Page 5 of 8 Page ID #:280 DB1/ 90809597.1 5 [PROPOSED] ORDER GRANTING TOYOTA’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE 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 by countervailing benefits.” Klem v. Wash. Mut. Bank, 176 Wn.2d 771, 787 (2013) (quoting 15 U.S.C. § 45(n)); accord Adelson v. U.S. Legal Support, Inc., 715 F. Supp. 2d 1265, 1277 (S.D. Fla. 2010). Plaintiffs Casper and the Stockingers do not even attempt to pled the elements of this theory. Thus, their claims under the WCPA and FDUPTA, respectively, should be dismissed. Plaintiffs’ claims for equitable relief fail because they have not alleged that there is an inadequate remedy at law, and the claims alleged (e.g., breach of warranty and fraud) may entitle them to an adequate legal remedy. See Franklin v. Gwinnett Cnty. Pub. Sch., 503 U.S. 60, 62 (1992); Rhynes v. Stryker Corp., 2011 No. 10-5619 SC, WL 2149095, at *4 (N.D. Cal. May 31, 2011); accord Licul v. Volkswagen Grp. of Am., Inc., No. 13-61686-CIV, 2013 WL 6328734, at *7 (S.D. Fla. Dec. 5, 2013) (Florida law); accord Shafer, Kline & Warren, Inc. v. The Allen Grp.-Kansas City, LLC, No. 13-2472-JAR-TJJ, 2014 WL 1974525, at *2 (D. Kan. May 15, 2014) (Kansas law); accord Seattle Prof’l Eng’g Employees Ass’n v. Boeing Co., 139 Wash. 2d 824, 839 (2000) (Washington law). Plaintiffs’ claims for equitable relief also fail because they rely on the same facts for both their claims seeking equitable remedies from her claims seeking legal remedies. See Zapata Fonseca v. Goya Foods, Inc., 2016 No. 16-CV-02559-LHK, 2016 WL 4698942, * 7 (N.D. Cal. Sept. 8, 2016). Plaintiffs’ claim for unjust enrichment (Compl. at ¶¶ 179 – 185) also must be dismissed because Plaintiffs allege the existence and enforceability of an express contract and unjust enrichment is unavailable to redefine that relationship. See Maloney v. Indymac Mortg. Servs., No. CV 13-04781 DDP AGRX, 2014 WL 6453777, *7 (C.D. Cal. Nov. 17, 2014) (dismissing unjust enrichment claim because “Rule 8 does not allow a plaintiff to circumvent state law by stating a claim for both express and quasi contract”); see also Brown v. Transurban USA. Inc., 144 F. Supp. 3d 809, 844 (E.D. Va. 2015) (“[A] condition precedent to the assertion of . . . a[n] [unjust enrichment] claim is that no express contract exists between the Case 2:17-cv-00035-VAP-KS Document 28-2 Filed 03/03/17 Page 6 of 8 Page ID #:281 DB1/ 90809597.1 6 [PROPOSED] ORDER GRANTING TOYOTA’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE 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 parties”) (internal citation omitted); Shafer, Kline & Warren, Inc., 2014 WL 1974525, at *2 (same under Kansas law); Diamond “S” Dev. Corp. v. Mercantile Bank, 989 So. 2d 696, 697 (Fla. Dist. Ct. App. 2008) (same under Florida law); Chandler v. Wash. Toll Bridge Authority, 17 Wash. 2d 591, 605 (1943) (same under Washington law). Further, unjust enrichment is not an independent claim under prevailing California law. In re Toyota Motor Corp., 754 F. Supp. 2d at 1193-94 (“Simply put, ‘there is no cause of action in California for unjust enrichment’” (internal citations omitted)). Plaintiffs also fail to establish standing to pursue their claims relating to vehicles they did not purchase and do not own. See Wilson v. Frito-Lay N. Am., Inc., 961 F. Supp. 2d 1134, 1141 (N.D. Cal. 2013). Further, Toyota’s request for judicial notice is GRANTED and the Court takes judicial notice of Exhibit 1 attached the Declaration of David L. Schrader and Exhibits 1 – 9, attached to the Declaration of Barry M. Hare, as well as the fact that mold can be found in virtually every environment, both indoors and outdoors. These documents and facts are “not subject to reasonable dispute” because they “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). Likewise, scientific facts—such as the fact that mold can be found virtually anywhere—are readily judicially noticeable. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 593 (1993) (noting that “firmly established” scientific theories “properly are subject to judicial notice”); see also United States v. DeBetham, 348 F. Supp. 1377, 1383 (S.D. Cal.) (‘“General scientific acceptance’ is a proper condition upon the court’s taking judicial notice of scientific facts.”) aff’d sub nom. United States v. De Betham, 470 F.2d 1367 (9th Cir. 1972). Further, the incorporation by reference doctrine provides an independent basis for the Court’s consideration of exhibits attached to the Schrader and Hare Case 2:17-cv-00035-VAP-KS Document 28-2 Filed 03/03/17 Page 7 of 8 Page ID #:282 DB1/ 90809597.1 7 [PROPOSED] ORDER GRANTING TOYOTA’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE 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 declarations. See Knievel v. ESPN, 393 F.3d 1068, 1076-1077 (9th Cir. 2005); Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998), superseded by statute on other grounds as stated in Abrego v. Dow Chem. Co., 443 F.3d 676 (9th Cir. 2006). IT IS SO ORDERED. Dated: ______________, 2017 HON. VIRGINIA A. PHILLIPS DISTRICT COURT CHIEF JUDGE Case 2:17-cv-00035-VAP-KS Document 28-2 Filed 03/03/17 Page 8 of 8 Page ID #:283