Kobe Falco v. Nissan North America Inc et al, No. 2:2013cv00686 - Document 114 (C.D. Cal. 2015)
Court Description: ORDER DENYING DEFENDANTS MOTIONS TO DISMISS UNDER RULES 12(b)(2) AND 12(b)(6) 99 , 100 by Judge Dean D. Pregerson: The Court DENIES the motions to dismiss as to all claims except the Fifth Cause of Action (Fraud), which is DISMISSED as to NML. (lc). Modified on 4/6/2015 (lc).
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Kobe Falco v. Nissan North America Inc et al Doc. 114 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 KOBE FALCO, individually, and on behalf of a class similarly situated individuals, 13 Plaintiff, 14 v. 15 16 NISSAN NORTH AMERICA INC., NISSAN MOTOR CO.LTD, a Japanese Company, 17 18 Defendants. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 13-00686 DDP (MANx) ORDER DENYING DEFENDANT’S MOTIONS TO DISMISS UNDER RULES 12(b)(2) AND 12(b)(6) [Dkt. Nos. 99, 100] 19 20 Presently before the Court are two Motions to Dismiss the 21 Second Amended Complaint as to Nissan Motor Co. Ltd (“NML”), one 22 for lack of personal jurisdiction and one for failure to state a 23 claim. 24 considered the parties’ submissions, the Court adopts the following 25 order. 26 I. 27 28 (Dkt. Nos. 99, 100.) Having heard oral arguments and BACKGROUND The Court has already set out the background facts of this case in its order of October 10, 2013, and they remain largely the Dockets.Justia.com 1 same. 2 between 2005 and 2007 that shared in common a particular kind of 3 timing chain system, which they allege was prone to failure and put 4 consumers at risk. 5 DDP MANX, 2013 WL 5575065, at *1-2 (C.D. Cal. Oct. 10, 2013). 6 bring this action under various California and Washington consumer 7 protection statutes on behalf of themselves and others similar 8 situated. 9 Briefly, the named Plaintiffs purchased four Nissan vehicles Falco v. Nissan N. Am. Inc., No. CV 13-00686 They (Second Amended Complaint (“SAC”) at 1.) NML is the parent company of Nissan North America (“NNA”), 10 which sells Nissan products in the United States. 11 NML was a Defendant in the original state complaint in this case. 12 (Dkt. No. 1.) 13 lacked jurisdiction over it, (Dkt. No. 27), the Court ordered 14 limited discovery to establish the jurisdictional facts. 15 65.) 16 its opinion in Daimler AG v. Bauman, 134 S. Ct. 746 (2014). 17 argued Bauman foreclosed any possibility of general jurisdiction. 18 (Dkt. No. 78.) 19 a defendant, but with leave for Plaintiffs to re-add NML in a 20 future amended complaint. 21 Plaintiffs filed the SAC, which did add NML back as a defendant. 22 (Dkt. No. 90.) 23 II. LEGAL STANDARD 24 A. Personal Jurisdiction 25 (Id. at ¶ 21.) After NML filed a motion asserting that the Court (Dkt. No. While that discovery was under way, the Supreme Court issued NML The parties therefore stipulated to dismiss NML as (Dkt. Nos. 83, 86.) A few months later, The present motions followed. A court in a given “forum state” may exercise specific 26 personal jurisdiction over a non-resident defendant if the 27 following conditions are met: 28 2 1 (1) The non-resident defendant must purposefully direct his 2 activities or consummate some transaction with the forum or 3 resident thereof; or perform some act by which he purposefully 4 avails himself of the privilege of conducting activities in 5 the forum, thereby invoking the benefits and protections of 6 its laws; 7 (2) the claim must be one which arises out of or relates to 8 the defendant's forum-related activities; and 9 (3) the exercise of jurisdiction must comport with fair play 10 and substantial justice, i.e. it must be reasonable. 11 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th 12 Cir.2004). 13 two prongs; the burden then shifts to the defendant to show that 14 the exercise of jurisdiction would be unreasonable. 15 B. 16 A plaintiff bears the burden of establishing the first Id. Motions to Dismiss A complaint will survive a motion to dismiss when it contains 17 “sufficient factual matter, accepted as true, to state a claim to 18 relief that is plausible on its face.” 19 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 20 570 (2007)). 21 “accept as true all allegations of material fact and must construe 22 those facts in the light most favorable to the plaintiff.” 23 v. Hayes, 213 F.3d 443, 447 (9th Cir.2000). 24 well-pleaded factual allegations, a court should assume their 25 veracity and then determine whether they plausibly give rise to an 26 entitlement of relief.” 27 whether a complaint states a plausible claim for relief” is a 28 “context-specific task that requires the reviewing court to draw on Ashcroft v. Iqbal, 556 U.S. When considering a Rule 12(b)(6) motion, a court must “When there are Iqbal, 556 U.S. at 679. 3 Resnick “Determining 1 its judicial experience and common sense.” 2 not include “detailed factual allegations,” but it must offer “more 3 than an unadorned, the-defendant-unlawfully-harmed-me accusation.” 4 Id. at 678. 5 the assumption of truth.” 6 C. 7 Id. A complaint need Statements of legal conclusions “are not entitled to Id. at 679. Rule 9(b) Claims sounding in fraud are subject to the heightened 8 pleading requirements of Federal Rule of Civil Procedure 9(b), 9 which requires that a plaintiff alleging fraud “must state with 10 particularity the circumstances constituting fraud.” 11 Rule 9(b), a pleading must identify the who, what, when, where, and 12 how of the misconduct charged, as well as what is false or 13 misleading about [the purportedly fraudulent] statement, and why it 14 is false.” 15 1055 (9th Cir.2011) (internal quotation marks and citations 16 omitted). 17 III. DISCUSSION 18 A. 19 “To satisfy Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, Personal Jurisdiction over NML Plaintiffs, having conducted limited discovery against NML as 20 to jurisdiction, have filed the SAC adding NML back in as a 21 Defendant in this action. 22 specific jurisdiction, because, as the parties appear to agree,1 23 NML was intimately involved with the design and testing of the 24 timing chain system at issue. 25 jurisdiction, because it only participated in design choices and Plaintiffs proceed under a theory of NML argues that there is no specific 26 27 28 1 See Reply ISO Mot. Dismiss Rule 12(b)(2) at 1:7-9 (NML has “never denied” that it “had design ‘release responsibility’ for the design of the vehicles”). 4 1 “never manufactured, distributed, sold, or warranted” any of the 2 vehicles in question. 3 1:10-11.) 4 personal jurisdiction on which Plaintiff relies only applies to an 5 entity that “actually placed the product into the stream of 6 commerce.” 7 (Reply ISO Mot. Dismiss Rule 12(b)(2) at Defendant argues that the “stream of commerce” theory of (Id. at 3:1-2.) At the outset, the Court notes that Plaintiffs do not concede 8 that all physical fabrication was done solely by NNA. 9 20, n.4.) (Opp’n at But even if it was, that does not foreclose a finding 10 that NML “manufactured” the vehicles and components in question. 11 Design is a critical portion of the manufacturing process; without 12 design, there is simply nothing to manufacture. 13 defining characteristic of a manufactured good is the imposition of 14 a man-made pattern, form, or design onto raw materials.2 15 attempt to separate its control over the design and testing phases 16 of manufacturing from the physical act of fabricating the vehicles, 17 and to insist that only the latter qualifies as “manufacturing” or 18 “putting a product into the stream of commerce,” is therefore 19 unconvincing – at least on these facts. 20 a case where a wholly independent designer sells a product design Indeed, the NML’s This is not, for example, 21 22 23 24 25 26 27 28 2 Black’s Law Dictionary 1109 (10th ed. 2014) (defining a “manufacture” as “any material form produced . . . from an unshaped composition of matter”). A district court in Kansas, confronted with a case in which a foreign company had provided the design for a motorcycle built by a sibling U.S. company, held that it had personal jurisdiction because “Honda R & D's design was a product . . . . Honda R & D's design may be likened to a component of the Honda motorcycle; in fact, it is a component which controls all other components.” Wessinger v. Vetter Corp., 685 F. Supp. 769, 777 (D. Kan. 1987) (emphases added). The Court need not adopt the holding of Wessinger to resolve this case, but that holding does provide one metaphor for thinking about the key role of design in manufacturing. 5 1 to another company and is completely uninvolved in the production 2 of the physical product thereafter.3 3 shows that NML took almost total responsibility for the relevant 4 components up through the initial production release,4 NML 5 conducted testing of the components,5 NML had authority over the 6 manufacturing process, because parts and vehicles could not be 7 manufactured without NML’s “release,”6 NML appears to have been 8 involved in monitoring the manufacturing plant,7 and NML had the 9 final authority to change or decline to change the manufacture of Rather, Plaintiff’s evidence 10 faulty parts, including for pricing reasons.8 11 evidence to the contrary on any of these points. 12 NML has produced no Thus, the Court finds that NML, at the very least, 13 participated in manufacturing the vehicles in question (and 14 possibly warranting them as well), and has therefore placed them 15 into the stream of commerce. 16 3 17 18 See, e.g., Lyons v. Rienzi & Sons, Inc., 856 F. Supp. 2d 501, 506, 510 (E.D.N.Y. 2012) (declining to find specific jurisdiction over Italian company that sold its yacht design to an unrelated Wisconsin firm for $30,000 and had no further hand in the process). 19 4 20 5 21 6 22 Decl. Mark Pifko, Ex. 1 at transcript page 54. Pifko Decl., Ex. 1 at transcript page 56. Pifko Decl., Ex. 1 at transcript pages 25-26 (NML was the entity that gave “approval to use [particular] parts on an engine or a vehicle”). 23 7 24 8 25 26 27 28 Pifko Decl., Ex. 1 at transcript page 27. Pifko Decl., Ex. 2 (NML had authority to reject a proposed “countermeasure” in 2003); Id., Ex. 5 at transcript page 140 (same); Id., Ex. 7 (manufacturing change proposed by NNA and thirdparty contractor, but NML “resisted” and the change was not adopted); Id., Ex. 5 at transcript pages 81-82 (NNA’s design team did not have “budgetary responsibility” for the components in question because they didn’t have “design responsibility,” while NML did have design responsibility and took into account the impact of design changes on the budgeted “piece price”). 6 1 That would not matter, of course, if NML had not aimed its 2 efforts at the California market. See, e.g., J. McIntyre Mach., 3 Ltd. v. Nicastro, 131 S. Ct. 2780, 2790, 180 L. Ed. 2d 765 (2011) 4 (Kennedy, J., plurality opinion) (no jurisdiction because 5 “[r]espondent has not established that J. McIntyre engaged in 6 conduct purposefully directed at” the forum state). 7 of a product into the stream of commerce, without more, is not an 8 act purposefully directed toward a forum state.” 9 v. Wärtsilä North America, Inc., 485 F.3d 450, 459 (9th Cir.2007). “The placement Holland America 10 In this case, however, the Court concludes that this requirement is 11 satisfied, because NML “purposely direct[ed]” its activities at the 12 forum state. 13 797, 802 (9th Cir.2004). 14 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d NML appears to have used NNA as a “distributor who has agreed 15 to serve as the sales agent in the forum State” for the vehicles 16 that NML helped to manufacture. 17 Court of California, Solano Cnty., 480 U.S. 102, 112 (1987) 18 (O’Connor, J., plurality opinion). 19 testimony, NML intends for the components at issue to be sold in 20 California. 21 NNA is “the sole authorized distributor of Nissan and Infiniti 22 vehicles in the United States, including California.” 23 27-1, Decl. Shiho Kobayashi, ¶ 17.) 24 relationship is not simply a hands-off parent-subsidiary 25 relationship. 26 sit on NML’s Board of Directors. 27 Kobayashi, ¶ 13-14.) 28 that NML and NNA worked closely together on “the distribution, Asahi Metal Indus. Co. v. Superior According to deposition (Decl. Mark Pifko, Ex. 5 at transcript pages 35-36.) (Dkt. No. And that distribution Half the members of NNA’s Board of Directors also (Dkt. No. 27-1, Decl. Shiho Plaintiffs allege, and NML does not deny, 7 1 sale, lease, servicing, and warranting of the Subject Nissan 2 Vehicles.” 3 advertising aimed at the American market, including California, for 4 at least some of the vehicles at issue–which are necessarily 5 distributed by NNA. 6 releases touting the activities of NNA (often referred to simply as 7 “Nissan”) in the United States, including in California. 8 Mark Pifko, Exs. 10-11.) 9 “additional conduct” that “indicate[s] an intent or purpose to (SAC, ¶ 23.) NML appears to engage in direct (Dkt. No. 40-3.) NML also puts out press (Decl. Taken as a whole, the evidence shows 10 serve the market in the forum State.” 11 (1987).9 12 Asahi, 480 U.S. 102, 112 The rest of the elements of specific jurisdiction follow 13 naturally. 14 manufacturing process, used NNA as its distribution agent, and 15 appears to have taken part in the marketing of the vehicles, with 16 the intent of selling them in California, Plaintiffs’ claims under 17 various consumer protection statutes arise out of and/or relate to 18 NML’s forum-related activities. 19 Because NML was involved in and had authority over the Schwarzenegger, 374 F.3d at 802. Finally, given all the above, NML has not shown that it would 20 be unreasonable for the Court to exercise jurisdiction. 21 Ninth Circuit, “[t]he court examines seven factors to determine 22 reasonableness: [1] the extent of purposeful interjection; [2] the 23 burden on the defendant; [3] the extent of conflict with 24 sovereignty of the defendant's state; [4] the forum state's In the 25 9 26 27 28 See also World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) (“[I]f the sale of a product . . . is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in [the forum state], it is not unreasonable to subject it to suit [there] . . . .”). 8 1 interest in adjudicating the suit; [5] the most efficient judicial 2 resolution of the dispute; [6] the convenience and effectiveness of 3 relief for the plaintiff; and [7] the existence of an alternative 4 forum.” 5 (9th Cir. 1988). 6 Sinatra v. Nat'l Enquirer, Inc., 854 F.2d 1191, 1198-99 The first factor is closely tied with the purposeful direction 7 analysis. 8 Nonetheless, [e]ven if there is sufficient ‘interjection’ into the 9 state to satisfy the purposeful availment prong, the degree of Sinatra v. Nat'l Enquirer, Inc., 854 F.2d at 1199. 10 interjection is a factor to be weighed in assessing the overall 11 reasonableness of jurisdiction . . . .” 12 Indus. AB, 11 F.3d 1482, 1488 (9th Cir. 1993). 13 purposeful interjection is present, it does not appear to be 14 particularly strong; NML does not, for example, have offices or 15 other physical presence in the forum state. 16 against reasonableness. 17 Core-Vent Corp. v. Nobel Here, although the This factor tilts The second factor is something of a wash with the sixth, 18 because convenience for the defendant will usually result in 19 inconvenience for the plaintiff. 20 relevant to change of venue analysis than jurisdictional analysis. 21 Shute v. Carnival Cruise Lines, 897 F.2d 377, 386-87 (9th Cir. 22 1990) rev'd as to other matters sub nom. Carnival Cruise Lines, 23 Inc. v. Shute, 499 U.S. 585 (1991). 24 given little weight, although some courts have distinguished 25 between corporate and individual plaintiffs, as the latter do not 26 necessarily have the “considerable resources” that would be needed 27 to “litigate elsewhere.” 28 Grokster, Ltd., 243 F. Supp. 2d 1073, 1094 (C.D. Cal. 2003). Thus, this factor is usually more The sixth factor is similarly Metro-Goldwyn-Mayer Studios Inc. v. 9 1 Overall, these factors are neutral or tilt slightly in favor or 2 reasonableness. 3 As to the third factor, the Court does not lightly consider 4 exercising jurisdiction over a foreign corporation. 5 and reserve should be exercised when extending our notions of 6 personal jurisdiction into the international field.” Asahi, 480 7 U.S. at 115. 8 exerts significant control over the manufacturing operations of a 9 U.S. subsidiary and takes active steps to do business in the forum “Great care On the other hand, where, as here, the foreign entity 10 state, concerns about conflicts of sovereignty are reduced, because 11 the foreign entity has volunteered to be subject to (as well as to 12 benefit from) the laws of the forum state.10 13 The fourth factor strongly favors reasonableness. California 14 has a significant interest in having the dispute resolved, because 15 most of Plaintiffs’ claims arise under California laws designed to 16 protect California consumers from unfair business practices.11 17 10 18 19 20 21 NML points to the Supreme Court’s recent call for U.S. courts to consider “international comity” and the theories of jurisdiction applied by other countries when deciding whether to assert jurisdiction. Daimler AG v. Bauman, 134 S. Ct. 746, 763 (2014). However, NML identifies no particular Japanese notion of jurisdiction, nor any particular “consideration[] of international rapport,” that counsels against exercising jurisdiction. Id. 11 22 23 24 25 26 27 28 Defendants argue that the California consumer protection statutes – the Consumers Legal Remedies Act (“CLRA”), Unfair Competition Law (“UCL”), and Song-Beverly Consumer Warranty Act (“Song”) – only apply to those with whom potential plaintiffs have had a direct transaction – essentially, the final seller. But that is not true – the California statutes allow manufacturer liability even if the manufacturer is not the retail seller. See Cal. Civ. Code § 1792 (“[E]very sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer's and the retail seller's implied warranty that the goods are merchantable.”) (emphasis added); Delarosa v. Boiron, Inc., 275 F.R.D. 582, 588 (C.D. Cal. 2011) (plaintiff could establish numerosity in class action against drug manufacturer under the CLRA (continued...) 10 1 Finally, efficiency of resolution and the existence of 2 alternative fora are in this case linked. NML proposes no 3 alternative forum in which this case could be heard, but on NML’s 4 theory that it is not subject to American jurisdiction at all, 5 presumably Plaintiffs could only seek justice in a Japanese court. 6 It is not clear that there exists a Japanese court that would 7 enforce California consumer protection laws, but even if there 8 were, both the Plaintiffs and NNA would be massively hindered in 9 presenting their cases, as the witnesses and physical evidence in 10 this case are likely to be located primarily in the United States. 11 These factors also support a finding of reasonableness. 12 Taken as a whole, the factors weigh in favor of finding that 13 the exercise of personal jurisdiction over NML is reasonable in 14 this case. 15 For all of the above reasons, the Court finds that it has 16 personal jurisdiction over NML. 17 B. 18 Rule 8 Pleading NML alleges that Plaintiffs have not adequately stated a claim 19 against it because the SAC frequently “fail[s] to differentiate 20 between [NML] and NNA” and “Plaintiff’s claims are against NNA 21 alone.” 22 point is, of course, the legal conclusion NML wishes to reach and 23 cannot be assumed at this stage in the litigation, when the Court 24 must presume that Plaintiffs’ factual allegations are true. 25 the former point, NML argues that because Plaintiffs frequently (Mot. Dismiss Rule 12(b)(6) at 1:10, 1:22.) The latter As to 26 27 28 11 (...continued) and UCL by alleging that drug was sold in retail pharmacies around the state). See Part III.C. infra. 11 1 refer to NML and NNA collectively as “Nissan,” the SAC lacks 2 specificity. 3 But plaintiffs routinely refer to defendants under some 4 collective name, as it would be tedious to list each defendant 5 separately every time one wished to make an allegation against them 6 all. 7 NML or its agents or employees are alleged to have done. 8 38-57 (describing NML’s role in designing the allegedly faulty 9 system).) And Plaintiffs’ SAC spells out in quite a bit of detail what (SAC, ¶¶ To the degree that the SAC alleges actions taken by 10 “Nissan,” the Court reads that as it would any other complaint 11 making allegations against defendants named collectively – either 12 as an allegation that the defendants acted in concert or as a 13 general allegation against all defendants (subject to narrowing 14 after discovery), depending on the context. 15 C. 16 Rule 9(b) Pleading NML also argues that Plaintiffs' pleadings against it are 17 insufficiently specific to satisfy the pleading requirements of 18 Rule 9(b), which states that "[i]n alleging fraud . . . a party 19 must state with particularity the circumstances constituting fraud 20 . . . ." 21 sound in fraud, and that they therefore must be pled "with 22 particularity" - a phrase the Ninth Circuit has interpreted as 23 meaning, essentially, "the who, what, when, where, and how of the 24 misconduct charged." 25 1106 (9th Cir. 2003) (internal quotation marks omitted). 26 Specifically, NML argues that Rule 9(b) is not satisfied because 27 (1) Plaintiffs' allegations do not adequately distinguish between NML argues that Plaintiffs' claims largely or entirely Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 28 12 1 NML and NNA generally and (2) Plaintiffs cannot assert that NML (as 2 distinct from NNA) entered into a "transaction" with them. 3 Although the Causes of Action speak somewhat broadly of 4 actions taken by "Nissan," Plaintiffs' background allegations 5 contain plenty of specifics as to acts NML is alleged to have taken 6 separate from (and even in opposition to) NNA. 7 49-50 and ¶¶ 52-53 allege that specific officers at NML were aware 8 of alleged flaws in the timing chain in 2003, declined to test a 9 solution because of cost concerns, and "sought to bury the In particular, ¶¶ 10 problems." 11 misconduct," and they give NML adequate notice of the acts it is 12 alleged to have committed. 13 1120, 1124 (9th Cir. 2009) (the purpose of Rule 9(b) is "to give 14 defendants notice of the particular misconduct so that they can 15 defend against the charge") (ellipsis omitted). 16 "sought to bury the problems" is not perfectly precise, it is 17 nonetheless sufficient for Rule 9(b) purposes to indicate that 18 NML's officers undertook to hide reports of the alleged flaw. 19 "[I]n cases of corporate fraud, the plaintiffs cannot be expected 20 to have personal knowledge of the facts constituting the 21 wrongdoing." 22 (9th Cir. 1987). 23 These are the "who, what, when, where, and how of the Kearns v. Ford Motor Co., 567 F.3d To the degree that Wool v. Tandem Computers Inc., 818 F.2d 1433, 1439 NML also argues that Plaintiffs cannot show that they have 24 entered into a "transaction" with it, which it claims is required 25 for a claim under the consumer protection statutes. 26 that a common law fraud claim requires a direct relationship, such 27 as that of a “seller and buyer,” between the manufacturer and the 28 plaintiff. It is true LiMandri v. Judkins, 52 Cal. App. 4th 326, 336-37 13 1 (1997). But “[w]hile . . . tort standards at times may be relevant 2 to a court's evaluation of CLRA actions,” that does not mean “that 3 CLRA actions must fulfill the same elements as common law fraud 4 claims.” 5 (N.D. Cal. 2005). 6 contention that a direct sale is not required to allege a CLRA 7 claim." 8 5781673, at *10 (E.D. Cal. Oct. 25, 2013). 9 protection extends to the manufacturer as well, regardless of Chamberlan v. Ford Motor Co., 369 F. Supp. 2d 1138, 1144 There are "numerous cases supporting [the] Rossi v. Whirlpool Corp., No. 2:12-CV-00125, 2013 WL "[T]he CLRA's 10 whether the consumer dealt directly with the manufacturer." 11 See also McAdams v. Monier, Inc., 182 Cal. App. 4th 174, 188 (2010) 12 ("A cause of action for unfair competition under the UCL may be 13 established independent of any contractual relationship between the 14 parties."). 15 the direct seller may be held liable for failure to disclose 16 material defects under the CLRA and the UCL, although not for 17 common law fraud.12 18 Id. The Court concludes that a manufacturer that is not Nonetheless, not just any failure to disclose a defect can 19 support a claim against a manufacturer under the CLRA and UCL. 20 Only when the manufacturer has a specific obligation to disclose 21 the defect can a plaintiff allege actionable fraud under the 22 statutes. 23 exclusive knowledge of material facts not known to the plaintiff,” 24 and/or “actively conceal[ed] a material fact from the plaintiff.” 25 Smith v. Ford Motor Co., 749 F. Supp. 2d 980, 987 (N.D. Cal. 2010) An obligation arises when a defendant manufacturer “had 26 27 28 12 To the extent that NML’s argument rests on the contention that it is not the "manufacturer" of the vehicles or components in question, the Court has already rejected that argument above. 14 1 aff'd, 462 F. App'x 660 (9th Cir. 2011). 2 obligation, for the fact of a defect to be “material,” it must 3 involve a “safety issue.” 4 manufacturer can be sued under the CLRA and/or the UCL if it had 5 exclusive knowledge of a safety-related defect or if it actively 6 concealed such a defect. 7 Id. Apart from a warranty Thus, under California law, a Plaintiffs have alleged that the timing chain defect in this 8 case “places the driver and passengers at a risk of harm . . . . 9 What the Timing Chain Tensioning System fails, it can cause . . . 10 the inability to accelerate and maintain speed, as well as 11 catastrophic engine failure . . . . [O]ccupants of the vehicles are 12 exposed to rear end collisions and other accidents . . . .” 13 ¶ 10.) 14 the alleged defect and that it attempted to conceal the defect, are 15 sufficiently particular to allege an obligation to disclose and 16 therefore to state a claim under the statutes. 17 (SAC, This allegation, combined with allegations that NML knew of Thus Plaintiffs can assert statutory causes of action against 18 NML, apart from the final sales transaction that they may have 19 entered into with NNA. 20 asserted only against NNA – at least on the facts currently pled. 21 IV. The common law fraud claim, however, may be CONCLUSION 22 The Court DENIES the motions to dismiss as to all claims 23 except the Fifth Cause of Action (Fraud), which is DISMISSED as to 24 NML. 25 26 IT IS SO ORDERED. 27 Dated: April 6, 2015 DEAN D. PREGERSON United States District Judge 28 15
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