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Phillip Johnson, Jimmy Aldridge v. Harley-Davidson Motor Company Group

July 21, 2011

PHILLIP JOHNSON, JIMMY ALDRIDGE,
RANDY VANDERMOLEN, AND MATTHEW WEYUKER, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY
SITUATED,
PLAINTIFFS,
v.
HARLEY-DAVIDSON MOTOR COMPANY GROUP, LLC, HARLEY-DAVIDSON, INC., WHICH WILL DO BUSINESS IN CALIFORNIA AS: (WISCONSIN) HARLEY-DAVIDSON, INC., HARLEY- DAVIDSON MOTOR COMPANY, INC. AND DOES 1-50, DEFENDANTS.



MOTION TO DISMISS GRANTING IN PART DEFENDANT ENYING IN PART AND ORDER

This matter comes before the Court on Defendant Harley-Davidson Motor Company Group, LLC, Harley-Davidson Inc.‟s ("Defendant") Motion to Dismiss (Doc. #40) the Third Amended Complaint ("TAC")(Doc. #34) filed by Plaintiffs Phillip Johnson, Jimmy Aldridge, Randy Vandermolen, and Matthew Weyuker, collectively "Plaintiffs." Plaintiffs oppose the motion (Doc. 2 #42).*fn1 3 4

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs allege that Defendant, the largest manufacturer 6 of heavy-weight motorcycles in the world based on market share, 7 produced defective Twin Cam 88 and Twin Cam 96 motors.

Plaintiffs aver two defect claims: 1) since model year 1999, 9 Defendant‟s Twin Cam motorcycle engines have produced dangerously excessive heat during normal operations and the engine cooling systems designed by Defendant are inadequate to safely cool the engines and 2) since model year 2006, the six-speed transmissions and other related systems suffer premature wear and failure. Plaintiffs allege that Defendant has known about the excessive heat defect since approximately 1999 and has known about the transmission defect since approximately 2006. Plaintiffs also aver that Defendant is aware of reasonable alternative designs for motorcycle engines and cooling systems, including those used by its competitors and those used by Defendant itself in V-Rod models beginning in the 2002 model year. Finally, Plaintiffs allege that Defendant is aware of reasonable alternative designs for transmissions, including those used by its competitors and those used by Defendant itself in C.V.O. models.

The TAC includes the individual claims of each named plaintiff. In short, each named plaintiff claims that he owns a motorcycle with a defective engine and/or transmission and has 2 suffered economic injuries due to having the defective engine 3 and/or transmission repaired and replaced between one and five 4 times. Additionally, after Plaintiffs discovered the 5 overheating problem, Defendant‟s agents and representatives 6 allegedly induced Plaintiffs to purchase plastic "heat shields" 7 claiming that they would resolve the overheating issue.

Plaintiffs also allege physical injuries in the form of 9 burns on their legs. They aver that the economic and physical injuries are a result of the defective engine and/or transmission in Defendant‟s motorcycles.

Plaintiff Philip Johnson commenced this action on September 10, 2010. On October 1, 2010, Plaintiff filed a First Amended Complaint joining Jimmy Aldridge and Randy Vandermolen as plaintiffs and bringing claims on behalf of a class of similarly situated Harley-Davidson owners. On December 10, 2010, pursuant to a stipulation of the parties, Plaintiffs filed a Second Amended Complaint joining Matthew Weyuker as a plaintiff. On April 29, 2011, pursuant to a stipulation of the parties, Plaintiffs filed a Third Amended Complaint, naming the correct Harley Davidson entity as defendant. It is this Third Amended Complaint that is the subject of Defendant‟s instant motion to dismiss.

Plaintiffs bring this suit as a class action alleging six causes of action: 1) Strict products liability; 2) Violations of California Business and Professional Code §§ 17200 ("UCL") for committing unfair, unlawful, and fraudulent business practices; 3) Violations of the breach of express and implied warranty; 4) Negligence; 5) Unjust enrichment; and 6) Violations of the 2 Consumers Legal Remedies Act, California Civil Code §§ 1750 et 3 seq. ("CLRA"). This Court has original jurisdiction over this 4 action pursuant to 28 U.S.C. § 1332(a)(1) and independent 5 jurisdiction over this action pursuant to 28 U.S.C. § 1332(d). 6 7

II. OPINION

A. Legal Standard

1. Motion to Dismiss

A party may move to dismiss an action for failure to state a claim upon which relief can be granted pursuant to Federal Rules of Civil Procedure 12(b)(6). In considering a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1975), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). Assertions that are mere "legal conclusions," however, are not entitled to the assumption of truth. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a plaintiff needs to plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Dismissal is appropriate where the plaintiff fails to state a claim supportable by a cognizable legal theory. Balistreri v. Pacifica Police Department, 901 F.2d 696, 699 (9th Cir. 1990).

Upon granting a motion to dismiss for failure to state a claim, the court has discretion to allow leave to amend the complaint pursuant to Federal Rules of Civil Procedure 15(a). "Dismissal with prejudice and without leave to amend is not 3 appropriate unless it is clear . . . that the complaint could 4 not be saved by amendment." Eminence Capital, L.L.C. v. Aspeon, 5 Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). 6

B. Claims for Relief

1. UCL Pleading

Defendant argues that Plaintiffs‟ UCL claims (Claim 2) fail 9 to satisfy federal pleading requirements under Federal Rules of Civil Procedure 8(a) and 9(b) because they are plain recitations of the elements and they fall short of the specificity required under Rule 9(b). Plaintiffs respond that as long as they plead facts sufficient to support either their lawful, unfair, or fraudulent theories of liability under the UCL, their Complaint should survive a motion to dismiss. They also argue that the TAC recites the material facts necessary to support allegations that Defendant‟s conduct is unlawful and unfair under the UCL.

Each prong of the UCL is a separate and distinct theory of liability. Kearns v. Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009). Rule 9(b)‟s heightened pleading requirements apply to claims for violations of the UCL. Id. at 1125.

While fraud is not a necessary element of a claim under the . . . UCL, a plaintiff may nonetheless allege that the defendant engaged in fraudulent conduct. A plaintiff may allege a unified course of fraudulent conduct and rely entirely on that course of conduct as the basis of that claim. In that event, the claim is said to be "grounded in fraud‟ or to "sound in fraud,‟ and the pleading ...


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