Hugo De Anda v. Ford Motor Company, Inc. et al, No. 2:2022cv04064 - Document 34 (C.D. Cal. 2023)
Court Description: ORDER DENYING DEFENDANT FORD MOTOR COMPANY, INC.'S MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT 21 by Judge Otis D. Wright, II. (lc)
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Hugo De Anda v. Ford Motor Company, Inc. et al Doc. 34 O 1 2 3 4 5 6 7 8 9 United States District Court Central District of California 10 11 12 13 Plaintiff, 14 15 Case 2:22-cv-04064-ODW (MAAx) HUGO DE ANDA, ORDER DENYING MOTION TO DISMISS [21] v. FORD MOTOR COMPANY, INC. et al., 16 Defendants. 17 I. 18 INTRODUCTION 19 Plaintiff Hugo De Anda brings this putative class action against Defendant Ford 20 Motor Company, Inc. for allegedly failing to provide a required emissions warranty 21 for the vehicles that Ford distributes in California. (First Am. Compl. (“FAC”), ECF 22 No. 19.) Ford now moves to dismiss De Anda’s First Amended Complaint for lack of 23 subject matter jurisdiction and failure to state a claim under Federal Rules of Civil 24 Procedure (“Rule” or “Rules”) 12(b)(1) and 12(b)(6). (Mot. Dismiss FAC (“Motion” 25 or “Mot.”), ECF No. 21-1.) For the following reasons, the Court DENIES Ford’s 26 Motion.1 27 28 1 Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. Dockets.Justia.com II. 1 2 A. BACKGROUND Regulatory Framework 3 This case arises out of Ford’s alleged violations of California’s regulations for 4 the emissions of vehicles sold within California. These regulations require, among 5 other things, manufacturers to provide special warranty coverage for a vehicle’s 6 emission control system (“California Emissions Warranty”). 7 Specifically, manufacturers must provide a three-year/50,000-mile warranty for 8 “any part . . . which affects any regulated emission” (“warranted parts”). See Cal. 9 Code Regs. tit. 13, §§ 2035(c)(3)(B), 2037(b)(2). For any warranted part that is 10 “high-priced” (“high-priced warranted parts”), manufacturers must provide a seven- 11 year/70,000-mile warranty. See §§ 2037(b)(3), (c). A warranted part is “high priced” 12 if its “replacement cost” exceeds a “cost limit” defined by a formula that considers the 13 model year and the Consumer Price Index (“CPI”). See id. § 2037(c). A part’s 14 replacement cost is defined as “the retail cost to a vehicle owner”—including the part, 15 labor, and diagnosis—in “the highest-cost metropolitan area of California.” See id. 16 § 2037(c)(2). For model year 2018 passenger cars, the cost limit was $610.00. (FAC 17 ¶ 99.) 18 Manufacturers must identify all high-priced warranted parts in their applications 19 to certify new vehicle models with the California Air Resources Board (“CARB”). 20 See Cal. Code Regs. tit. 13, § 2037(c)(1)(B). 21 California’s regulations also require vehicles to be equipped with an onboard 22 diagnostic system (“OBD II system”), which “shall be capable of detecting 23 malfunctions of the [vehicle’s] monitored emission systems, illuminating a 24 malfunction indicator light (MIL) to notify the vehicle operator of detected 25 malfunctions.” Id. § 1968.2(a). The regulations also require the OBD II system to 26 store fault codes identifying detected malfunctions. Id. 27 28 2 1 B. CARB Declaration and Consumer Complaint 2 De Anda alleges that CARB issued a declaration to educate courts about 3 “CARB’s interpretation and implementation of California’s warranty requirements.” 4 (FAC ¶ 66.) According to De Anda, the declaration provides that “warranted parts” 5 include any components that can or are required to illuminate the malfunction 6 indicator light in the event of a malfunction, even if the primary function of the 7 component is not emission control. (Id. ¶ 67.) 8 De Anda also alleges that, in response to a consumer complaint concerning a 9 2007 Nissan vehicle, CARB stated that a transmission replacement due to a 10 malfunctioning pressure control solenoid should be covered under the California 11 Emissions Warranty because a fault code was triggered which caused the malfunction 12 indicator light to illuminate. (Id. ¶ 73.) 13 C. De Anda’s Allegations 14 Plaintiff De Anda owns a 2018 Ford Mustang (“Vehicle”), which he purchased 15 and registered in California. (Id. ¶ 43.) Defendant Ford sells vehicles, including 2018 16 Ford Mustangs, in California. (Id. ¶ 39.) 17 On March 15, 2022, De Anda brought the Vehicle to a Ford-authorized repair 18 facility because the Vehicle’s check engine light was on and the Vehicle was jerking 19 under certain conditions. (Id. ¶ 44.) The Vehicle had 62,128 miles on it at the time. 20 (Id.) 21 First, the repair facility identified an issue with the Vehicle’s catalytic converter 22 and replaced the converter. (See Decl. Michael L. Turrill ISO Mot. (“Turrill Decl.”) 23 Ex. B (“Repair Order”) 1, ECF No. 21-4.2) This repair is not the subject of this 24 litigation. Second, the repair facility verified the jerking condition and found that the 25 26 “trans[mission] slips and has harsh engagements.” (Id. (capitalization omitted).) 27 28 2 The Court may consider the Repair Order under the doctrine of incorporation by reference. (See infra Part III.) 3 1 De Anda alleges that the repair team also identified the presence of the following 2 diagnostic test codes: P2708 (indicating a defective transmission solenoid) and P2705 3 (detecting a problem with the way the transmission shifts). (See FAC ¶ 46.) 4 Ultimately, the repair team concluded that it was “neces[s]ary to remove and 5 tear down trans[mission] due to internal component failure.” (Repair Order 1 6 (capitalization omitted).) De Anda was charged a $170.00 diagnostic fee. (FAC 7 ¶ 49.) In addition, De Anda alleges that the labor cost to remove and replace the 8 transmission, excluding any repairs, far exceeds $1,000. (Id. ¶ 48.) Ford refused to 9 cover the diagnostic fee and the recommended repair. (Id. ¶ 49.) 10 De Anda alleges that Ford unlawfully denied warranty coverage for the 11 transmission repair, which involved high-priced emission parts that should have been 12 covered under Ford’s seven-year/70,000-mile California Emissions Warranty. 13 (Id. ¶ 55.) De Anda further alleges that Ford intentionally does not identify all high- 14 priced warranted parts in its application to certify its vehicle model in order to reduce 15 its warranty exposure. (Id. ¶¶ 56–58.) 16 On June 14, 2022, De Anda filed this putative class action against Ford. 17 (Compl., ECF No. 1.) After Ford moved to dismiss the Complaint, De Anda filed the 18 First Amended Complaint, alleging a single cause of action for violation of 19 California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq. 20 (“UCL”). (FAC ¶¶ 123–53.) De Anda seeks restitution for Ford’s failure to provide a 21 warranty in compliance with California’s regulations and an injunction compelling 22 Ford to properly identify and cover the transmission and high-cost transmission parts 23 under the California Emissions Warranty. (Id. ¶¶ 144–45.) Ford now moves to 24 dismiss De Anda’s First Amended Complaint. (Mot.) The Motion is fully briefed. 25 (Opp’n, ECF No. 23; Reply, ECF No. 25; see also Notice Suppl. Authority, ECF 26 No. 32; Resp. Notice Suppl. Authority, ECF No. 33.) 27 28 4 III. 1 REQUESTS FOR JUDICIAL NOTICE 2 In connection with the Motion, Ford requests that the Court take judicial notice 3 of five documents: (1) the Warranty Guide for 2018 model year Ford vehicles (“2018 4 Warranty Guide”); (2) De Anda’s repair order from the March 15, 2022 dealer visit 5 (“Repair Order”); (3) CARB’s Emission Warranty Parts List, as amended 6 February 22, 1985; (4) excerpts from CARB’s 1999 Final Statement of Reasons for 7 “LEVII” Amendments; and (5) excerpts from CARB’s 1998 Initial Statement of 8 Reasons for “LEVII” Amendments. (Def.’s Req. Judicial Notice (“Def.’s RJN”) 1, 9 ECF No. 22.) 10 Regarding the first two documents, Ford argues the Court should consider the 11 2018 Warranty Guide and the Repair Order because the First Amended Complaint 12 incorporates them by reference by (1) referring to and relying on the 2018 Warranty 13 Guide, and (2) directly quoting the Repair Order. (Id. at 1–2.) 14 Incorporation by reference is a “judicially created doctrine that treats certain 15 documents as though they are part of the complaint itself.” 16 Therapeutics, Inc., 899 F.3d 988, 1002 (9th Cir. 2018). A court may incorporate a 17 document by reference if “the plaintiff refers extensively to the document or the 18 document forms the basis of the plaintiff’s claim.” United States v. Ritchie, 342 F.3d 19 903, 908 (9th Cir. 2003). 20 inferences from an incorporated document. Khoja, 899 F.3d at 1003. This is because 21 “it is improper to assume the truth of an incorporated document if such assumptions 22 only serve to dispute facts stated in a well-pleaded complaint.” Id. Khoja v. Orexigen However, courts should use caution when drawing 23 Here, De Anda does not dispute the accuracy of the 2018 Warranty Guide and 24 Repair Order. Because De Anda’s allegations refer to and rely on the 2018 Warranty 25 Guide and consist of quotes from the Repair Order, the Court finds that the First 26 Amended Complaint incorporates them by reference. 27 Accordingly, the Court may consider these documents. Id. 28 5 Ritchie, 342 F.3d at 908. 1 Ford also requests that the Court take judicial notice of three documents from 2 CARB on the basis that they “are government documents publicly available on 3 CARB’s website.” (Def.’s RJN 3.) “Under [Federal Rule of Evidence] 201, the court 4 can take judicial notice of ‘[p]ublic records and government documents available from 5 reliable sources on the Internet,’ such as websites run by governmental agencies.” 6 Gerritsen v. Warner Bros. Ent. Inc., 112 F. Supp. 3d 1011, 1033 (C.D. Cal. 2015); see 7 also In re Reformulated Gasoline (RFG) Antitrust & Patent Litig., No. 05-cv-1671- 8 CAS (VBKx), 2006 WL 7123690, at *1 n.3 (C.D. Cal. June 21, 2006) (taking judicial 9 notice of “CARB’s Final Statement of Reasons dated October 1992”). Accordingly, 10 the Court grants Ford’s request and takes judicial notice of the three documents from 11 CARB. 12 Additionally, in connection with the Opposition, De Anda requests that the 13 Court take judicial notice of two court orders available on PACER and issued in the 14 Northern District of California and Central District of California. (Pl.’s Req. Judicial 15 Notice 1, ECF No. 24.) The Court denies this request as moot because the Court need 16 not take judicial notice of case law to consider it. IV. 17 LEGAL STANDARDS 18 Ford moves to dismiss the First Amended Complaint pursuant to both 19 Rule 12(b)(1) for lack of subject matter jurisdiction and Rule 12(b)(6) for failure to 20 state a claim. (See generally Mot.) 21 A. 22 Rule 12(b)(1)—Lack of Subject Matter Jurisdiction Pursuant to Rule 12(b)(1), a party may move to dismiss based on a court’s lack 23 of subject matter jurisdiction. See Fed. R. Civ. P. 12(b)(1). “A Rule 12(b)(1) 24 jurisdictional attack may be facial or factual.” 25 373 F.3d 1035, 1039 (9th Cir. 2004). 26 plaintiff’s allegations but asserts that they are insufficient on their face to invoke 27 federal jurisdiction.” 28 (internal quotation marks omitted). Conversely, a factual attack “contests the truth of Safe Air for Everyone v. Meyer, A facial attack “accepts the truth of the Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014) 6 1 the plaintiff’s factual allegations, usually by introducing evidence outside the 2 pleadings.” Id. The party attempting to invoke a court’s jurisdiction bears the burden 3 of proof for establishing jurisdiction. See Sopcak v. N. Mountain Helicopter Serv., 4 52 F.3d 817, 818 (9th Cir. 1995). 5 B. Rule 12(b)(6)—Failure to State a Claim 6 A court may dismiss a complaint under Rule 12(b)(6) for lack of a cognizable 7 legal theory or insufficient facts pleaded to support an otherwise cognizable legal 8 theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). To 9 survive a dismissal motion, a complaint need only satisfy “the minimal notice 10 pleading requirements of Rule 8(a)(2)”—“a short and plain statement of the claim.” 11 Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). The factual “allegations must be 12 enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. 13 Twombly, 550 U.S. 544, 555 (2007). Pursuant to this standard, the complaint must 14 “contain sufficient factual matter, accepted as true, to state a claim to relief that is 15 plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation 16 marks omitted). 17 The determination of whether a complaint satisfies the plausibility standard is a 18 “context-specific task that requires the reviewing court to draw on its judicial 19 experience and common sense.” Id. at 679. A court is generally limited to the 20 pleadings and “must construe all factual allegations set forth in the complaint . . . as 21 true and . . . in the light most favorable” to the plaintiff. Lee v. City of Los Angeles, 22 250 F.3d 668, 688 (9th Cir. 2001) (internal quotation marks omitted). However, a 23 court need not blindly accept “allegations that are merely conclusory, unwarranted 24 deductions of fact, or unreasonable inferences.” Sprewell v. Golden State Warriors, 25 266 F.3d 979, 988 (9th Cir. 2001). 26 allegations “to give fair notice and to enable the opposing party to defend itself 27 effectively,” and the “allegations that are taken as true must plausibly suggest an 28 entitlement to relief, such that it is not unfair to require the opposing party to be Ultimately, there must be sufficient factual 7 1 subjected to the expense of discovery and continued litigation.” 2 652 F.3d 1202, 1216 (9th Cir. 2011). Starr v. Baca, 3 In addition, Rule 9(b) mandates a heightened pleading standard for cases 4 sounding in fraud.3 See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 5 2009). Under Rule 9(b)’s heightened pleading standard, “a party must state with 6 particularity the circumstances constituting fraud,” including “‘the who, what, when, 7 where, and how’ of the misconduct charged.” Id. at 1124. V. 8 DISCUSSION The Court addresses Ford’s arguments for dismissal under Rules 12(b)(1) for 9 10 lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim. 11 A. Ford argues that this Court lacks subject matter jurisdiction because De Anda’s 12 13 Subject Matter Jurisdiction action is not ripe and, thus, De Anda lacks standing. (Mot. 3–6.) 14 The basic rationale of the ripeness doctrine “is to prevent the courts, through 15 premature adjudication, from entangling themselves in abstract disagreements.” 16 Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580 (1985). The Ninth 17 Circuit cautions courts that their role is “neither to issue advisory opinions nor to 18 declare rights in hypothetical cases, but to adjudicate live cases or controversies 19 consistent with the powers granted the judiciary in Article III of the Constitution.” 20 Thomas v. Anchorage Equal Rts. Comm’n, 220 F.3d 1134, 1138 (9th Cir. 2000). 21 Ripeness becomes an issue when a case is anchored in future events that may not 22 23 24 25 26 27 28 3 The parties dispute whether Rule 9(b)’s heightened pleading standard applies. (See Mot. 7; Opp’n 10–11.) Here, De Anda alleges that Ford “intentionally” failed to identify covered parts in its warranties in a systematic effort to reduce its warranty exposure. (See FAC ¶¶ 56, 136–37.) As such, De Anda’s claims are grounded in fraud. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103–04 (9th Cir. 2003) (holding that, even if fraud is not generally a required element of a claim, a claim that relies on a “unified course of fraudulent conduct” is “grounded in fraud” and must satisfy the particularity requirement of Rule 9(b)); see also Martin v. Ford Motor Co., No. 20-cv-10365DMG (JPRx), 2022 WL 2062470, at *2 (C.D. Cal. Feb. 17, 2022) (applying Rule 9(b) to UCL claim alleging defendant omitted covered parts from vehicle’s warranty). 8 1 occur as anticipated, or at all. 2 Conservation & Dev. Comm’n, 461 U.S. 190, 200–01 (1983). If a case is not ripe for 3 adjudication, then courts lack subject matter jurisdiction and should dismiss on that 4 basis. St. Clair v. City of Chico, 880 F.2d 199, 201–02 (9th Cir. 1989). “The burden 5 of establishing ripeness . . . rests on the party asserting the claim.” Colwell v. Dep’t of 6 Health & Hum. Servs., 558 F.3d 1112, 1121 (9th Cir. 2009). See Pac. Gas & Elec. Co. v. State Energy Res. 7 Here, Ford argues that De Anda alleges only a general transmission issue in the 8 Vehicle and fails to identify the transmission components that require servicing. 9 (Mot. 3–6.) Ford asserts the CARB regulations require Ford to warrant some, but not 10 all, transmission components as high-priced warranted parts. (Id. at 4.) Moreover, 11 Ford argues that the Repair Order indicates that “further investigation was needed to 12 identify which transmission component(s) required servicing.” 13 argues that De Anda’s claim is not ripe until he identifies a specific warranted part 14 that is defective. (Id. at 4–5.) (Id.) Thus, Ford 15 In response, De Anda argues that the Repair Order shows the Vehicle’s check 16 engine light was illuminated and identifies two fault codes indicating defects in the 17 transmission solenoid (fault code P2708) and the transmission pump or transmission 18 speed sensor (fault code P2705). (Opp’n 4–7.) De Anda argues that these codes 19 identify emissions-related defects and the components that need replacement. (Id.) 20 Moreover, putting aside the facts of De Anda’s particular repair, De Anda alleges that 21 Ford engages in a systemic business practice of intentionally failing to identify the 22 transmission and high-priced transmission components in its vehicle warranties in 23 violation of California’s emissions regulations. (FAC ¶ 136.) 24 The Court finds that De Anda’s allegations are sufficient to establish ripeness. 25 Accordingly, the Court denies Ford’s Motion to Dismiss under Rule 12(b)(1) for lack 26 of ripeness. 27 28 9 1 B. Sufficiency of the Pleadings 2 To begin with, Ford argues that De Anda fails to state an affirmative 3 misrepresentation claim. (Mot. 7–9.) However, in the Opposition, De Anda clarifies 4 that his “claim is predicated on Ford’s omissions, not misrepresentations.” 5 (Opp’n 13.) Accordingly, the Court denies as moot Ford’s argument for dismissal 6 based on De Anda’s failure to state an affirmative misrepresentation. Next, Ford makes several arguments for why De Anda fails to state a plausible 7 8 omission claim.4 (Mot. 9–25.) 1. 9 Coverage under the California Emissions Warranty 10 The primary dispute in this case concerns whether the transmission and 11 transmission components, including the transmission solenoid, “affect[] any regulated 12 emission” and, thus, should be covered under the California Emissions Warranty. See 13 Cal. Code Regs. tit. 13, § 2035(c)(3). 14 transmission will increase regulated emissions, as measured in grams of emissions per 15 mile driven, by causing “a delay in shift time, a delay in acceleration, excessive 16 transmission slipping, an increase in the engine’s revolutions per minute beyond what 17 is normal, a deviation from the vehicle’s shift pattern as designed, or a decrease in fuel 18 economy.” (FAC ¶ 78.) De Anda alleges that a malfunctioning 19 Ford argues, among other things, that De Anda conflates (1) whether a given 20 vehicle component affects regulated emissions when it is operating normally with 21 (2) whether a given component contains a defect that causes it to affect regulated 22 emissions. (Mot. 15.) However, this may be a distinction without a difference. If a 23 4 24 25 26 27 28 Among these arguments, Ford contends that De Anda must allege that Ford deceived CARB by excluding certain transmission components from its list of high-priced warranted parts submitted to CARB. (Mot. 19–20.) Although CARB may reject or require modification to a manufacturer’s list of high-priced warranted parts, see Cal. Code Regs. tit. 13, § 2037(c)(6), it does not follow that a manufacturer’s list of high-priced warranted parts is complete merely because CARB did not reject it or request any modifications. Indeed, Ford identifies no authority stating that CARB’s inaction is proof of a manufacturer’s compliance with the CARB regulations or that a manufacturer must deceive CARB in order to violate the CARB regulations. 10 1 given vehicle component affects regulated emissions when it is defective, then it is 2 plausible that it is a component whose operation affects regulated emissions. 3 Regardless, as discussed further below, the question of whether a vehicle component 4 affects regulated emissions is a factual one best reserved for summary judgment. 5 Ford argues that De Anda’s sweeping interpretation of what constitutes a 6 warranted part would produce absurd results such that “an underinflated tire or a 7 sticky brake pad—both of which can result in decreased fuel economy and increased 8 greenhouse gas emissions—should be covered by the emissions control system 9 warranty.” (Mot. 16.) 10 The parties cite district court decisions involving similar circumstances as those 11 at issue here, but which reach different outcomes. For example, in Velasco v. 12 Chrysler Group LLC, the plaintiff argued that the vehicle’s Total Integrated Power 13 Module—a computer that distributes power to the vehicle’s electrical systems—is 14 emissions-related because it affects or controls other parts of the car that are 15 emissions-related. 16 (C.D. Cal. Aug. 22, 2014). The court found that plaintiff’s theory lacked “any logical 17 limiting principle” because, “under the logic of Plaintiffs’ argument, a multitude of 18 motor vehicle components would be emissions-related parts because they indirectly 19 affect emissions by affecting or controlling emissions[-]related parts.” 20 Therefore, the court concluded that California’s emissions regulations cannot be 21 “reasonably . . . construed to have such a sweeping scope” and dismissed the 22 plaintiff’s Magnuson-Moss Warranty Act claim. Id. at 13. No. 13-cv-08080-DDP (VBKx), 2014 WL 4187796, at *1 Id. at 13. 23 On the other hand, in Martin v. Ford Motor Company, the plaintiff alleged that 24 Ford failed to cover her repairs to a defective Motor Electronics Cooling System 25 Pump (“MECS”), which Ford did not consider to be a vehicle part that affects 26 emissions. 27 premature to interpret the scope of the California Emissions Warranty and whether the 28 MECS falls within it “because just how directly the MECS affects emissions involves 2022 WL 2062470, at *2. There, the court concluded that it was 11 1 too many factual questions.” Id. at 3. Moreover, the court distinguished the plaintiff’s 2 claims from those in Velasco because the plaintiff “articulate[d] a more discrete— 3 albeit circuitous—path towards affecting emissions than simply saying that the part 4 affects another emissions-related part.” Id. 5 Here, the Court finds the approach articulated in Martin to be more persuasive 6 under the present circumstances. De Anda alleges that a malfunctioning transmission 7 affects regulated emissions in particular ways—by causing “a delay in shift time, a 8 delay in acceleration, excessive transmission slipping, an increase in the engine’s 9 revolutions per minute beyond what is normal, a deviation from the vehicle’s shift 10 pattern as designed, or a decrease in fuel economy.” (FAC ¶ 78.) Thus, as in Martin, 11 De Anda alleges the transmission impacts emissions in discrete ways, rather than 12 alleging that it merely affects other emissions-related parts. (Id.) Determining how 13 directly the transmission affects emissions is a question of fact that is best reserved for 14 summary judgment. Accordingly, at this stage, De Anda may allege that the transmission and its 15 16 components, including the transmission solenoid, are emissions-related parts.5 17 2. 18 Ford makes several arguments for why De Anda’s repair in particular should 19 not be covered by the California Emissions Warranty. (Mot. 10–14.) However, as 20 alleged, De Anda’s UCL claims hinge on Ford’s omission of the transmission and its 21 high-priced components from its warranty. (FAC ¶ 129.) De Anda alleges that this 22 omission is an unlawful and unfair business practice that damages the putative class 23 members, including by requiring them to pay out-of-pocket for repairs that should be 24 5 25 26 27 28 De Anda’s Repair The parties dispute whether, under the CARB regulations, a vehicle component is a warranted part that affects emissions solely because it triggers a malfunction indicator light to illuminate. (See Mot. 12–14; Opp’n 8–9.) “Although the regulations require coverage when a defect in an emissionsrelated part causes the check-engine light to illuminate, that does not mean that any defect that triggers the light is emissions-related.” Martin, 2022 WL 2062470, at *3 n.5. However, the Court need not decide this issue now because it finds that De Anda plausibly alleges that the transmission and its components affect emissions beyond solely triggering a malfunction indicator light to illuminate. (See FAC ¶ 78.) 12 1 covered and to overpay for their vehicles when they are sold without a compliant 2 California Emissions Warranty. (Id. ¶¶ 14–15, 138.) Thus, De Anda’s claim does not 3 hinge on his repair alone. (See Opp’n 12 (“A major focus of Plaintiff’s action is to 4 compel Ford to comply with the Regulations and properly identify all parts that ‘affect 5 regulated emissions’ (i.e., ‘emissions-related’ parts) that Ford has, to date, failed to 6 identify and include in Ford’s warranty books.”).) 7 Regardless, the Court finds that De Anda states a plausible claim for coverage 8 under the California Emissions Warranty. De Anda alleges that he experienced 9 jerking in his vehicle under certain conditions, which the repair team verified. (Id. 10 ¶¶ 45–46.) He further alleges that his check engine light was on and that the repair 11 team identified two diagnostic trouble codes (indicating a defective transmission 12 solenoid and a problem with the way the transmission shifts). (Id. ¶¶ 46–47.) De 13 Anda alleges the repair team indicated “it was necessary to remove and tear down the 14 transmission due to internal component failure,” which would necessarily exceed the 15 cost limit for a 2018 vehicle. (Id. ¶¶ 48, 98.) Finally, De Anda alleges that CARB 16 has, in past circumstances, considered a transmission replacement due to a 17 malfunctioning pressure control solenoid to be a covered repair under the California 18 Emissions Warranty. (Id. ¶¶ 72–76.) Although not dispositive, this helps to push De 19 Anda’s claim over the plausibility threshold. See Iqbal, 556 U.S. at 678. 20 3. UCL Claim 21 The UCL prohibits “any unlawful, unfair, or fraudulent business act or 22 practice.” Cal. Bus. & Prof. Code § 17200. 23 “anything that can properly be called a business practice and that at the same time is 24 forbidden by law.” Herskowitz v. Apple Inc., 940 F. Supp. 2d 1131, 1145 (N.D. Cal. 25 2013) (quoting Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 26 180 (1999)). The “unfair” prong “creates a cause of action for a business practice that 27 is unfair even if not proscribed by some other law.” In re Adobe Sys. Priv. Litig., 28 66 F. Supp. 3d 1197, 1226 (N.D. Cal. 2014). 13 The “unlawful” prong prohibits 1 Ford argues that De Anda fails to plead a claim under the “unlawful” and 2 “unfair” prongs of the UCL because he fails to adequately allege that the components 3 at issue are warranted under the California Emissions Warranty and that Ford violated 4 the CARB regulations. (Mot. 22–23.) However, as discussed above, the Court finds 5 that De Anda sufficiently alleges that the transmission and its components are 6 warranted parts. (See supra Part V.B.1.) De Anda alleges that Ford engages in a 7 systemic business practice of omitting the transmission and high-priced transmission 8 components from its warranties in violation of the CARB regulations. (FAC ¶ 136.) 9 These allegations are sufficient to state a claim under the unlawful and unfair prongs 10 of the UCL. 11 4. Allegations of Knowledge 12 Ford argues that knowledge is a required element under Rule 9(b) because De 13 Anda’s claim is grounded in fraud. (Mot. 20–22.) Ford further argues that De Anda 14 insufficiently pleads Ford’s knowledge that its warranty omitted a covered 15 component. (Id.) 16 Although knowledge is not generally a required element of a UCL claim, De 17 Anda’s claim relies on a “unified course of fraudulent conduct” and is “grounded in 18 fraud.” Vess, 317 F.3d at 1103–04. Thus, De Anda’s UCL claim must satisfy the 19 particularity requirement of Rule 9(b). 20 knowledge and intent to be pled in general terms, a plaintiff still must allege sufficient 21 underlying facts from which a court may reasonably infer that a party acted with the 22 requisite state of mind.” S.F. Tech., Inc. v. Glad Prod. Co., No. 5:10-cv-00966-JF 23 (PSGx), 2011 WL 940852, at *3 (N.D. Cal. Mar. 18, 2011) (internal quotation marks 24 omitted). See id. “[A]lthough Rule 9(b) permits 25 De Anda asserts that Ford engages in “a uniform, systematic, and intentional 26 business practice . . . to minimize the amount of money that Ford has to pay out in 27 warranty claims” by failing to properly identify transmission and transmission 28 components as high-priced warranted parts. (FAC ¶ 137.) De Anda alleges that, in 14 1 response to a consumer complaint concerning another vehicle, CARB determined that 2 a transmission replacement due to a malfunctioning pressure control solenoid should 3 be covered under the California Emissions Warranty. (Id. ¶ 73.) De Anda further 4 alleges that CARB issued “a memo notifying all manufacturers of the requirements of 5 the California Emissions Warranty and informing them of their obligations to meet 6 these requirements.” (Id. ¶ 75.) Viewing these allegations in the light most favorable 7 to De Anda, the Court finds that De Anda sufficiently alleges Ford’s knowledge of its 8 obligations under the CARB regulations and that its warranty omitted covered parts. 9 5. Equitable Relief 10 Finally, Ford argues that De Anda’s UCL claim should be dismissed because he 11 has not established that he lacks an inadequate remedy at law and he fails to 12 adequately allege a threat of future injury. (Mot. 24–25.) 13 “[E]quitable relief is not appropriate where an adequate remedy exists at law.” 14 Schroeder v. United States, 569 F.3d 956, 963 (9th Cir. 2009). In Sonner v. Premium 15 Nutrition Corporation, the Ninth Circuit held that “[t]he traditional principles 16 governing equitable remedies in federal courts, including the requisite inadequacy of 17 legal remedies, apply when a party requests restitution under the UCL and [Consumer 18 Legal Remedies Act (CLRA)] in a diversity action.” 971 F.3d 834, 844 (9th Cir. 19 2020). Thus, a plaintiff “must establish that she lacks an adequate remedy at law 20 before securing equitable restitution for past harm under the UCL and CLRA.” Id.; 21 see also Klaehn v. Cali Bamboo LLC, No. 21-cv-55738, 2022 WL 1830685, at *3 22 (9th Cir. June 3, 2022) (applying Sonner and affirming dismissal of UCL claims 23 where “Plaintiffs failed to make any plausible allegation that they lacked an adequate 24 remedy at law”). 25 Here, De Anda seeks equitable relief in the form of restitution and injunctive 26 relief. He alleges that Ford’s failure to comply with the CARB regulations contributes 27 to increased emissions, thereby polluting the air and harming the environment in 28 contravention of the California Emissions Warranty. (FAC ¶¶ 145–52.) De Anda 15 1 further alleges that damages would not be sufficient in this case because Ford is 2 uniquely capable of identifying which components in its vehicles are high-priced 3 warranted parts, and Ford should be directed to identify those components. (Id. 4 ¶ 153.) In light of these allegations, the Court finds De Anda plausibly alleges an 5 inadequate remedy at law. See Amoco Prod. Co. v. Vill. of Gambell, AK, 480 U.S. 6 531, 545 (1987) (“Environmental injury, by its nature, can seldom be adequately 7 remedied by money damages and is often permanent or at least of long duration, i.e., 8 irreparable.”). 9 Moreover, to be entitled to injunctive relief, De Anda must demonstrate that his 10 potential injury is “certainly impending.” See Clapper v. Amnesty Int’l USA, 568 U.S. 11 398, 409 (2013). Among other things, De Anda alleges that he cannot pay for the 12 repair to his Vehicle, so his Vehicle does not shift properly, causing delays in 13 acceleration and surging. (FAC ¶ 143.) De Anda further alleges that, as a result of 14 Ford’s failure to provide a compliant California Emissions Warranty, his Vehicle is 15 unsafe and emits increased regulated emissions. (Id.) Additionally, De Anda alleges 16 that Ford, by continuing to violate the CARB regulations, causes its vehicles to release 17 increased harmful vehicle emissions, polluting the environment. (See id. ¶¶ 150–52.) 18 The Court finds that De Anda plausibly alleges an impending harm, sufficient to state 19 a claim for injunctive relief. VI. 20 21 22 CONCLUSION For the reasons discussed above, the Court DENIES Ford’s Motion to Dismiss. (ECF No. 21.) IT IS SO ORDERED. 23 24 April 5, 2023 25 26 27 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 28 16
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