Smith et al v. Apple, Inc., No. 4:2021cv09527 - Document 80 (N.D. Cal. 2023)

Court Description: ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S 41 MOTION TO DISMISS. Amended Pleadings due by 3/17/2023; Case Management Statement due by 3/28/2023; and Telephonic Further Case Management Conference set for 4/4/2023 02:00 PM. The 4/4/2023 proceeding will be held by AT&T Conference Line. The parties are advised that in the event of an audio problem, counsel should be prepared to attend the hearing via Zoom conference at the Courts direction. The court circulates the fo llowing conference number to allow the equivalent of a public hearing by telephone.For conference line information, see: https://apps.cand.uscourts.gov/telhrg/ All counsel, members of the public and press please use the following dial-in in formation below to access the conference line: Dial In: 888-808-6929Access Code: 6064255The Court may be in session with proceedings in progress when you connect to the conference line. Therefore, mute your phone if possible and wa it for the Court to address you before speaking on the line. For call clarity, parties shall NOT use speaker phone or earpieces for these calls, and where at all possible, parties shall use landlines. The parties are further advised to ensure that the Court can hear and understand them clearly before speaking at length.PLEASE NOTE: Persons granted access to court proceedings held by telephone or videoconference are reminded that photographing, recording, and rebroadcasting of court proceedings, including screenshots or other visual copying of a hearing, is absolutely prohibited. See General Order 58 at Paragraph III. Signed by Judge Haywood S. Gilliam, Jr. on 2/17/2023. (ndr, COURT STAFF) (Filed on 2/17/2023)

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Smith et al v. Apple, Inc. Doc. 80 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CHRIS SMITH, et al., Plaintiffs, 8 v. 9 10 ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS Re: Dkt. No. 41 APPLE, INC., Defendant. 11 United States District Court Northern District of California Case No. 21-cv-09527-HSG 12 Before the Court is Defendant’s motion to dismiss the First Amended Complaint. Dkt. No. 13 14 41. The Court finds this matter appropriate for disposition without oral argument and takes the 15 motion under submission. See Civil L.R. 7-1(b). The Court GRANTS IN PART and DENIES 16 IN PART the motion. 17 18 I. BACKGROUND This is a putative class action brought on behalf of purchasers of Apple Watches. See Dkt. 19 No. 31 (“FAC”) ¶ 1. Plaintiffs allege that First Generation, Series 1 through Series 6, and Series 20 SE Apple Watches contain “an undisclosed and unreasonably dangerous safety hazard.” Id. ¶ 2. 21 More specifically, Plaintiffs allege that sudden swelling of the watch batteries can cause the screen 22 to detach, shatter, or crack, “exposing its razor-sharp edges and leading to operational failure of 23 the Watch and/or personal injuries . . . .” Id. Plaintiffs allege that Apple failed to allot sufficient 24 space within the watch to prevent the screen issue, “[d]espite knowing that the battery inside the 25 Watch can suddenly swell.” Id. Plaintiffs further allege that the watches have injured Plaintiffs 26 and putative class members, creating a “substantial and material risk of serious injury, including 27 lacerations, cuts, abrasions, and other injuries.” Id. ¶¶ 5–6. 28 Dockets.Justia.com Plaintiffs seek to represent a nationwide class, an internet subclass, and state-specific 1 2 subclasses in Alabama, California, New York, Ohio, Michigan, and Texas. Plaintiffs assert the 3 following causes of action against Defendant: (1) violations of the California Unlawful 4 Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq. (“UCL”); (2) violations of the 5 California Consumers Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq. (“CLRA”); (3) fraud 6 by omission under various state laws; (4) violations of the Song-Beverly Consumer Warranty Act, 7 Cal. Civ. Code § 1791 et seq.; (5) breach of implied warranty; (6) violations of the Magnuson- 8 Moss Warranty Act, 15 U.S.C. § 2301, et seq.; and violations of consumer protection laws in New 9 York, Michigan, and Texas. See FAC ¶¶ 241–362. United States District Court Northern District of California 10 II. LEGAL STANDARD 11 Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain 12 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A 13 defendant may move to dismiss a complaint for failing to state a claim upon which relief can be 14 granted under Rule 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the 15 complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 16 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 17 12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on 18 its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible 19 when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that 20 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 21 Rule 9(b) imposes a heightened pleading standard where fraud is an essential element of a 22 claim. See Fed. R. Civ. P. 9(b) (“In alleging fraud or mistake, a party must state with particularity 23 the circumstances constituting fraud or mistake.”); see also Vess v. Ciba–Geigy Corp. USA, 317 24 F.3d 1097, 1107 (9th Cir. 2003). A plaintiff must identify “the who, what, when, where, and how” 25 of the alleged conduct, so as to provide defendants with sufficient information to defend against 26 the charge. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997). However, “[m]alice, intent, 27 knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 28 Rule 9(b). 2 In reviewing the plausibility of a complaint, courts “accept factual allegations in the 1 2 complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” 3 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nonetheless, 4 courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of 5 fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 6 2008). 7 III. 8 United States District Court Northern District of California 9 DISCUSSION Defendant moves to dismiss on several grounds, including that the non-California plaintiffs may not pursue claims under California law, that the claims for equitable relief fail 10 because Plaintiffs have an adequate remedy at law, and that Plaintiffs have not adequately alleged 11 pre-sale knowledge of the defect. See generally Mot. 12 A. 13 The Court finds that whether non-California plaintiffs may bring claims under California 14 15 Non-California Plaintiffs law is an issue better addressed at a later stage. “State statutory remedies may be invoked by out-of-state parties when they are harmed by 16 wrongful conduct occurring in California.” Norwest Mortg., Inc. v. Super. Ct., 72 Cal. App. 4th 17 214, 224–225 (1999); see also In re iPhone 4S Consumer Litig., No. C 12-1127 CW, 2013 WL 18 3829653, at *7–9 (N.D. Cal. July 23, 2013). “However, a choice of law analysis might 19 demonstrate that a different state law should apply to a non-resident’s California claims.” In re 20 Big Heart Pet Brands Litig., No. 18-CV-00861-JSW, 2019 WL 8266869, at *12 (N.D. Cal. Oct. 4, 21 2019). Plaintiffs allege that Defendant is a California company, where it makes all of its decisions 22 about promotional materials, product design, and pre-release testing. FAC ¶¶ 36–37. Thus, 23 “application of California law poses no constitutional concerns.” Forcellati v. Hyland’s, Inc., 876 24 F. Supp. 2d 1155, 1160 (C.D. Cal. 2012); see also Banh v. Am. Honda Motor Co., Inc., No. 2:19- 25 CV-05984-RGK-AS, 2019 WL 8683361, at *3–4 (C.D. Cal. Dec. 17, 2019). Defendant does not 26 argue that the non-California plaintiffs fail to meet the Article III standing requirements, nor does 27 it offer any analysis of the differences between California law and other potential jurisdictions. 28 3 1 Thus, the Court declines to conduct a choice of law analysis at this stage and finds that 2 Defendant has “failed to meet its burden on this motion to show that the non-resident Plaintiffs 3 cannot pursue claims under California law.”1 See In re Big Heart Pet Brands Litig, 2019 WL 4 8266869, at *12–13 (distinguishing cases where plaintiffs attempted to bring claims under state 5 laws where no named plaintiff resided and deferring choice of law analysis).2 6 B. 7 Defendant argues that Plaintiffs’ claims must be dismissed to the extent they seek equitable 8 remedies because Plaintiffs have an equitable remedy at law. See Mot. at 6. Under Sonner v. 9 Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020), and Guzman v. Polaris Indus. Inc., 49 10 F.4th 1308 (9th Cir. 2022), the Court agrees. In allowing equitable claims to proceed, this Court has previously noted the odd procedural 11 United States District Court Northern District of California Availability of an Adequate Remedy at Law 12 posture of Sonner. See, e.g., Brown v. Natures Path Foods, Inc., No. 21-CV-05132-HSG, 2022 13 WL 717816, at *6 n.5 (N.D. Cal. Mar. 10, 2022). But Guzman has recently clarified this issue. 14 There, the Ninth Circuit affirmed a district court’s dismissal of a UCL restitution claim, holding 15 that “because [plaintiff] had an adequate remedy at law in his time-barred CLRA claim, the district 16 court lacked equitable jurisdiction to hear [his] UCL claim.” Guzman, 49 F.4th at 1313. In doing 17 so, the court noted that “[n]othing in Sonner’s reasoning suggested that its holding was limited to 18 19 20 21 22 23 24 25 26 27 28 1 Defendant cites to a footnote in Sponchiado v. Apple Inc., No. 18-CV-07533-HSG, 2019 WL 6117482, at *7 n.5 (N.D. Cal. Nov. 18, 2019). But there, Plaintiff had offered “no reason” to defer the issue. Here, even Defendant appears to concede that choice of law arguments should be made after discovery. See Mot. at 5 n.7 (“Apple . . . reserves the right to raise choice of law arguments with respect to Plaintiffs Rogers, Class, and others when the facts regarding their purchases are clear.”). Further, although the Court may address choice of law arguments at the motion to dismiss stage, it declines to do so here. See In re Big Heart Pet Brands Litig., 2019 WL 8266869, at *12. 2 Defendant also argues that Plaintiff Chris Smith cannot bring a CLRA claim because he received his watch as a gift from his mother. See Mot. at 5 n.8. Defendant is correct. See Watkins v. MGA Ent., Inc., 550 F. Supp. 3d 815, 835 (N.D. Cal. 2021) (“California courts have held that only the individual who actually purchased the product may assert a claim under the CLRA based on the sale of that product.”). Plaintiff Chris Smith’s CLRA claim is DISMISSED without leave to amend, as the FAC alleges his mother purchased the watch, see FAC ¶ 24, and amendment would thus be futile. See Weisbuch v. Cnty. of L.A., 119 F.3d 778, 783 n.1 (9th Cir. 1997) (“[A] plaintiff may plead [him]self out of court” if he “plead[s] facts which establish that he cannot prevail on his . . . claim.”). 4 1 cases in which a party had voluntarily dismissed a damages claim to avoid a jury trial.” Id. at 2 1313. The Guzman court explained that “[e]quitable jurisdiction is distinct from subject matter 3 jurisdiction” and “both are required for a federal court to hear the merits of an equitable claim.” 4 Id. at 1314. United States District Court Northern District of California 5 Applying Sonner and Guzman, the Court finds that Plaintiffs have not adequately alleged 6 that their remedies at law are inadequate. The Court reads Guzman’s discussion of “equitable 7 jurisdiction” as precluding pleading equitable remedies in the alternative, as Plaintiffs do here. 8 See FAC, Prayer for Relief; Opp. at 4. The FAC does not address why monetary damages would 9 be inadequate to make Plaintiffs whole. The Court thus DISMISSES Plaintiffs’ claims to the 10 extent they seek equitable relief, including Plaintiffs’ UCL claim in its entirety, without prejudice 11 to pursuit in state court, as Guzman instructs. See 49 F.4th at 1314–15. The restitution claim is 12 dismissed without leave to amend. The Court grants leave to amend as to other forms of equitable 13 relief, but Plaintiffs must address why their remedies at law are inadequate. See Price v. Wells 14 Fargo & Co., No. 22-cv-03128-JSC, 2022 WL 17821590, at *1–2 (N.D. Cal. Dec. 6, 2022) 15 (allowing UCL claim for injunctive relief to proceed but dismissing UCL restitution claim under 16 Guzman). 17 C. 18 Fraud by Omission i. Pre-Sale Knowledge 19 Defendant argues that Plaintiffs’ omission claims fail because they have not adequately 20 pled pre-sale knowledge of the defect. See Mot. at 7. The parties do not dispute that the UCL, 21 CLRA, and fraud by omission claims require Plaintiffs to allege that Defendant had knowledge of 22 the alleged defect at the time of sale. See Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1145–46 23 (9th Cir. 2012); Deras v. Volkswagen Grp. of Am., Inc., No. 17-CV-05452-JST, 2018 WL 24 2267448, at *4 (N.D. Cal. May 17, 2018). 25 The Court finds that Plaintiffs have adequately alleged pre-sale knowledge of the defect. 26 See FAC ¶¶ 67–102. Plaintiffs rely on “multiple specific sources of knowledge,” including 27 consumer complaints on Apple-monitored forums, pre-sale testing, patent applications, and other 28 facts, including that Apple uses the same batteries across products and the batteries are well5 1 known to swell. See In re MacBook Keyboard Litig., No. 5:18-CV-02813-EJD, 2019 WL 2 1765817, at *6 (N.D. Cal. Apr. 22, 2019) (“Given Apple’s alleged product testing, patent 3 applications, and monitoring of the online forums where customers posted complaints, Plaintiffs 4 sufficiently plead that Apple had superior knowledge of the alleged defect.”). United States District Court Northern District of California 5 Although not every cited document is compelling, Plaintiffs’ alleged sources are specific 6 enough to raise a plausible inference of pre-sale knowledge. For example, unlike cases finding 7 allegations of pre-sale testing insufficient, here Plaintiffs “describe the details of this pre-release 8 testing” and “explain how this testing would have alerted Apple to the defect in this case.” See 9 FAC ¶¶ 69, 72–73; Davidson v. Apple, Inc., No. 16-CV-4942-LHK, 2017 WL 3149305, at *15 10 (N.D. Cal. July 25, 2017); Taleshpour v. Apple Inc., No. 5:20-CV-03122-EJD, 2021 WL 1197494, 11 at *11 (N.D. Cal. Mar. 30, 2021) (finding “pre-release testing in combination with the allegations 12 of substantial customer complaints” sufficient). Among other sources, Plaintiffs also allege 13 numerous consumer complaints on Apple-monitored forums describing the manifestation of the 14 defect—some of which posit that a swelling battery was the cause. See FAC ¶¶ 79–80, 84, 87–88, 15 91–101. 16 Assuming Plaintiffs’ allegations are true and drawing all inferences in Plaintiffs’ favor, the 17 Court finds that Plaintiffs have raised a plausible inference that Defendant had pre-sale knowledge 18 of the defect. 19 ii. Unreasonable Safety Hazard 20 Defendant also argues that the omission claims of those who did not experience the defect 21 within the warranty period fail because Plaintiffs did not adequately plead an unreasonable safety 22 hazard. See Mot. at 14. Although the state of the law on when plaintiffs must allege a safety 23 hazard is “in some disarray,” see Taleshpour v. Apple Inc., 549 F. Supp. 3d 1033, 1042 (N.D. Cal. 24 2021), Plaintiffs here appear to concede that they must do so, see Opp. at 12. 25 The Court finds that Plaintiffs have adequately alleged a safety hazard giving rise to a duty 26 to disclose. Plaintiffs allege that the defective watches injured plaintiffs and class members, 27 “causing many purchasers to suffer lacerations, cuts, abrasions, and/or other injuries.” FAC ¶ 10. 28 The complaint includes a graphic image of one of the alleged injuries, id. ¶ 6, and states that “a 6 1 detached screen on [Plaintiff’s] Apple Watch severely sliced the underside of his forearm, cutting 2 a vein, and resulting in substantial personal injury,” id. ¶ 139. The FAC also includes several 3 consumer complaints of similar injuries arising from detached screens. See id. ¶¶ 87, 88, 91. 4 Defendant’s argument that there is an insufficient “causal connection” between the defect and the 5 safety hazard is unpersuasive. See Mot. at 14–15. Here, Plaintiffs allege that insufficient space in 6 the watch casing causes the screen to detach when the battery swells, exposing “razor-sharp 7 edges.” The causal connection between the defect and the risk of personal injury is obvious and 8 far from speculative given the allegations that plaintiffs and class members were actually injured. D. 9 Defendant argues that the UCL, CLRA, and common law claims of Plaintiffs Rogers and 10 United States District Court Northern District of California Statute of Limitations 11 Smithson are time-barred. See Mot. at 16. Plaintiffs respond that the delayed discovery rule, 12 which tolls the statute of limitations, applies. See Opp. at 13. The Court finds that Plaintiffs Smithson and Rogers have not alleged facts sufficient to 13 14 invoke the delayed discovery rule. To invoke the rule, “[a] plaintiff whose complaint shows on its 15 face that his claim would be barred without the benefit of the discovery rule must specifically 16 plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier 17 discovery despite reasonable diligence.” Nguyen v. Nissan N. Am., Inc., 487 F. Supp. 3d 845, 856 18 (N.D. Cal. 2020) (quoting E-Fab, Inc. v. Accountants, Inc. Servs., 153 Cal. App. 4th 1308, 1319 19 (2007)). Plaintiff Rogers appears to concede this point and requests leave to amend to explain the 20 details of how she learned of the defect. See Opp. at 13 n.6. Plaintiff Smithson alleges only that 21 she discovered the defect “after learning about this lawsuit in September 2021 shortly before it 22 was filed.” See FAC ¶ 150. This is too vague and does not address why she could not have made 23 an earlier discovery by exercising reasonable diligence. The Court DISMISSES Plaintiffs Smithson’s3 and Rogers’s UCL, CLRA, and California 24 25 common law claims as time-barred with leave to amend to add allegations sufficient to allow them 26 to invoke the delayed discovery rule. 27 28 3 The Court finds that Plaintiff Smithson has sufficiently alleged an injury-in-fact. See Mot. at 16. The Ninth Circuit has “consistently recognized that a plaintiff can satisfy the injury-in-fact 7 1 E. 2 Defendant argues that Plaintiffs have not adequately pled claims under the consumer 3 protection statutes of Michigan, New York, and Texas. See Mot. at 17–18. The Court disagrees. 4 To start, Defendant’s arguments are largely based on lack of pre-sale knowledge. For the 5 same reasons described above, Plaintiffs have adequately alleged pre-sale knowledge under the 6 Michigan Consumer Protection Act (“MCPA”), New York General Business Law § 349, and the 7 Texas Deceptive Trade Practices Consumer Protection Act (“DTPCPA”) § 17.46(b)(24).4 For Michigan, Defendant also argues that Plaintiff Bays did not identify the specific 8 9 United States District Court Northern District of California Consumer Protection Statutes of Michigan, New York, and Texas materials he relied on in purchasing his watch. But this argument applies to affirmative 10 misrepresentation claims, which Plaintiffs do not allege. For omission claims, “a consumer relies 11 on a material omission under the MCPA where it is substantially likely that the consumer would 12 not have made the choice in question had the commercial entity disclosed the omitted 13 information.” In re ZF-TRW Airbag Control Units Prod. Liab. Litig., 601 F. Supp. 3d 625, 777 14 (C.D. Cal. 2022). The FAC sufficiently alleges that, had Defendant disclosed the alleged defect to 15 Plaintiffs at the time of sale, they would not have purchased their watches. See id. at 778. 16 Plaintiffs Cornea and White’s claims under New York law survive for the same reason— 17 Defendant’s arguments that Plaintiffs must point to specific representations on which they relied 18 are more properly applied to affirmative misrepresentation claims not alleged here. See Chiarelli 19 v. Nissan N. Am., Inc., No. 14–CV–4327 NGG VVP, 2015 WL 5686507, at *11 (E.D.N.Y. Sept. 20 25, 2015) (finding plaintiffs “adequately alleged an omissions-based theory” where they alleged 21 22 23 24 25 26 27 28 requirement by showing that she paid more for a product than she otherwise would have due to a defendant’s false representations about the product,” including fraud by omission. See McGee v. S-L Snacks Nat’l, 982 F.3d 700, 706–07 (9th Cir. 2020). Although some courts have required more specific allegations where the risks and defects were entirely “speculative” because the defect had not manifested, that is not the case here. See Sharma v. Volkswagen AG, 524 F. Supp. 3d 891, 902–03 (N.D. Cal. 2021); In re Chrysler-Dodge-Jeep Ecodiesel Mktg., Sales Pracs., & Prod. Liab. Litig., 295 F. Supp. 3d 927, 948–49 (N.D. Cal. 2018) (“Allegations of overpayment based on a defendant’s failure to disclose a product’s limitations are clearly sufficient to satisfy Article III’s injury-in-fact requirement.”). 4 Plaintiffs concede that the claims under the DTPCPA § 17.46(b)(5) and (b)(7) relate to affirmative representations and may be dismissed. Opp. at 16. The Court thus DISMISSES those claims without leave to amend. 8 1 Nissan failed to disclose information about a latent defect); see also Catalano v. BMW of N. Am., 2 LLC, 167 F. Supp. 3d 540, 562 (S.D.N.Y. 2016) (rejecting argument that complaint did not 3 identify “specific” misleading statements where plaintiff “primarily relie[d] on an omission-based 4 theory of deception”). Last, Defendant argues that Plaintiff Jones did not sufficiently allege that Defendant had United States District Court Northern District of California 5 6 the “intent to induce” Plaintiff into a transaction with its omissions. Mot. at 19. “To be actionable 7 under the [DTPCPA], a failure to disclose material information necessarily requires that the 8 defendant have known the information and have failed to bring it to the plaintiff’s attention.” See 9 Mize v. BMW of N. Am., LLC, No. 2:19-CV-007-Z-BR, 2020 WL 1526909, at *8 (N.D. Tex. Mar. 10 31, 2020) (quotations omitted). Here, Plaintiffs adequately allege that Defendant knew of the 11 defect and failed to disclose it before sale, and that Plaintiffs would not have purchased their 12 watches had they known. See id. at *8–9. 13 F. Implied Warranty of Merchantability 14 Defendant argues that its Limited Warranty effectively disclaims implied warranties. See 15 Mot. at 21; Dkt. No. 41-1 (“Amezcua Decl.”), Exs. A–E.5 The Court agrees. Under California 16 law, “[a] company may disclaim the implied warranty of merchantability so long as the disclaimer 17 ‘mention[s] merchantability’ and is ‘conspicuous.’” Minkler v. Apple, Inc., 65 F. Supp. 3d 810, 18 819 (N.D. Cal. 2014) (quoting Cal. Com. Code § 2316(2)). Like several other courts, this Court 19 finds that Defendant’s Limited Warranty is valid because it mentions merchantability and is 20 sufficiently conspicuous. See, e.g., Ocampo v. Apple Inc., No. 5:20-CV-05857-EJD, 2022 WL 21 767614, at *5 (N.D. Cal. Mar. 14, 2022). Because Defendant’s Limited Warranty effectively 22 23 24 25 26 27 28 5 Defendant seeks judicial notice of the applicable warranties and patent applications. See Dkt. No. 42. Plaintiffs do not oppose the request or question the authenticity of the documents. The Court GRANTS the request under the doctrine of incorporation by reference. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (explaining that under the incorporation by reference doctrine, a court may consider “documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff’s] pleading”). The doctrine extends to situations in which a “claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document in the complaint.” Id. 9 1 disclaimed the implied warranty of merchantability as a matter of law, the Court DISMISSES 2 Plaintiffs’ breach of implied warranty claim without leave to amend.6 3 G. 4 Defendant argues that the Song-Beverly Act claim fails because (1) Plaintiffs have not 5 alleged the defect was substantially certain to manifest and (2) the claims of all Plaintiffs except 6 Ortega are time-barred by the four-year statute of limitations. See Mot. at 23–24. As an initial matter, Plaintiffs’ Song-Beverly Act claim is not barred by the one-year 7 United States District Court Northern District of California Song-Beverly Consumer Warranty Act 8 warranty limit imposed by the Act. Plaintiffs allege a latent defect that existed at the time of sale 9 and thus were not required to discover and report the defect within one year. See Daniel v. Ford 10 Motor Co., 806 F.3d 1217, 1222 (9th Cir. 2015) (citing Mexia v. Rinker Boat Co., 174 Cal. App. 11 4th 1297, 1310 (2009)). The warranty of merchantability under the Act is breached “by the 12 existence of the unseen defect, not by its subsequent discovery.” Mexia, 174 Cal. App. 4th at 13 1305. And here, Plaintiffs do not need to allege that the defect is “substantially certain” to 14 manifest because they allege that the defect did manifest. Sloan v. Gen. Motors LLC, No. 16-CV- 15 07244-EMC, 2020 WL 1955643, at *29 (N.D. Cal. Apr. 23, 2020) (finding “no need to show that 16 the defect was ‘substantially certain’ to occur” where “it did occur”); Victorino v. FCA US LLC, 17 326 F.R.D. 282, 291 (S.D. Cal. 2018) (proof of “an inherent defect which is substantially certain 18 to result in malfunction” is only required “[i]f there is no current malfunction”). However, as pled, the Song-Beverly Act claims of all Plaintiffs except Ortega are time- 19 20 barred under the Act’s four-year statute of limitations, which began to run at the time of sale. See 21 MacDonald v. Ford Motor Co., 37 F. Supp. 3d 1087, 1100–02 (N.D. Cal. 2014). Plaintiffs argue 22 that the doctrine of fraudulent concealment should toll the statute of limitations. See Opp. at 19. 23 As Plaintiffs acknowledge, the doctrine of fraudulent concealment requires pleading with 24 particularity (1) the substantive elements of the fraud, and (2) an excuse for late discovery of the 25 26 27 28 Plaintiffs do not respond to Defendant’s argument that the Limited Warranty is clear and conspicuous, nor do they assert that the laws of any relevant states prohibit a disclaimer of the implied warranty of merchantability. See, e.g., In re Sony Gaming Networks & Customer Data Sec. Breach Litig., 996 F. Supp. 2d 942, 981, 983 (S.D. Cal. 2014) (noting that Michigan, Texas, and New York law permit the waiver of implied warranties). The breach of implied warranty claim is dismissed as to all plaintiffs. 10 6 1 facts. Yetter v. Ford Motor Co., 428 F. Supp. 3d 210, 223 (N.D. Cal. 2019). The second element 2 requires the plaintiff to allege “(1) when the fraud was discovered; (2) the circumstances under 3 which it was discovered; and (3) that the plaintiff was not at fault for failing to discover it or had 4 no actual or presumptive knowledge of facts sufficient to put him on inquiry.” In re Ford Tailgate 5 Litig., No. 11-CV-2953-RS, 2014 WL 1007066, at *8 (N.D. Cal. Mar. 12, 2014). As this Court 6 has noted, this generally requires allegations of “active conduct by a defendant, above and beyond 7 the wrongdoing upon which the plaintiff's claim is filed, to prevent the plaintiff from suing in 8 time.” Felix v. Anderson, No. 14-CV-03809-HSG, 2016 WL 3540980, *4 (N.D. Cal. June 29, 9 2016). The FAC is devoid of such allegations, and is light on allegations regarding discovery. Thus, the Court DISMISSES the Song-Beverly Act claims of all plaintiffs, except Ortega, United States District Court Northern District of California 10 11 as time-barred. The Court grants leave to amend to adequately allege facts showing why their 12 claims are timely.7 13 H. 14 The Magnuson–Moss Warranty Act “provides a [federal] cause of action for express and 15 implied warranty claims under state law.” Floyd v. Am. Honda Motor Co., 966 F.3d 1027, 1032 16 (9th Cir. 2020). Where a case is brought as a class action, there must be at least one hundred 17 named plaintiffs for a district court to exercise jurisdiction over an MMWA claim. Id. In Floyd, 18 the Ninth Circuit held that the Class Action Fairness Act, which grants district courts original 19 jurisdiction over certain class actions, “may not be used to evade or override the MMWA’s 20 specific numerosity requirement.” Id. at 1035. Plaintiffs’ cited cases pre-date Floyd, and the 21 reasoning of Floyd applies with the same force to Plaintiffs’ argument that other statutes provide a 22 jurisdictional basis for an MMWA claim regardless of the numerosity requirement. Magnuson-Moss Warranty Act 23 The FAC names only twelve plaintiffs. The Court thus finds that it does not have 24 jurisdiction over Plaintiffs’ MMWA claim and DISMISSES it with leave to amend. If Plaintiffs 25 cannot, consistent with counsel’s Rule 11 obligations, plead enough named plaintiffs to meet the 26 MMWA’s numerosity requirement for a class action, they may not renew this putative class claim. 27 28 7 Plaintiffs concede that Rogers’s Song-Beverly Act claim may be dismissed. See Opp. at 18 n.10. 11 1 United States District Court Northern District of California 2 IV. CONCLUSION The Court GRANTS in part and DENIES in part Defendant’s motion to dismiss the first 3 amended complaint. Dkt. No. 41. Any amended complaint must be filed within 28 days of the 4 date of this order. The Court further SETS a telephonic case management conference on April 4, 5 2023, at 2:00 p.m. All counsel shall use the following dial-in information to access the call: 6 Dial-In: 888-808-6929; 7 Passcode: 6064255 8 For call clarity, parties shall NOT use speaker phone or earpieces for these calls, and where 9 at all possible, parties shall use landlines. The Court DIRECTS the parties to meet and confer and 10 submit a joint case management statement by March 28, 2023. The parties should be prepared to 11 discuss how to move this case forward efficiently. 12 13 14 15 IT IS SO ORDERED. Dated: 2/17/2023 ______________________________________ HAYWOOD S. GILLIAM, JR. United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 12

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