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MacDonald v. Ford Motor Co.

United States District Court, N.D. California

March 31, 2014

JEAN MACDONALD, VERONICA H. AGUIRRE, AND BRIAN C. BARBEE, individually, and on behalf of a class of similarly situated individuals, Plaintiffs,
v.
FORD MOTOR COMPANY, Defendant

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[Copyrighted Material Omitted]

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For Jean MacDonald, individually, and on behalf of a class of similarly situated individuals, Veronica H. Aguirre, individually, and on behalf of a class of similarly situated individuals, Plaintiffs: Tarek H. Zohdy, LEAD ATTORNEY, Arvin Ratanavongse, Cody Robert Padgett, David Lishian Cheng, Jordan L. Lurie, Capstone Law APC, Los Angeles, CA.

For Brian C. Barbee, individually, and on behalf of a class of similarly situated individuals, Plaintiff: Tarek H. Zohdy, LEAD ATTORNEY, Arvin Ratanavongse, Cody Robert Padgett, David Lishian Cheng, Jordan L. Lurie, Capstone Lawyers, APC, Los Angeles, CA.

For Ford Motor Company, Defendant: Amir M Nassihi, LEAD ATTORNEY, Shook Hardy & Bacon L.L.P., San Francisco, CA; John Mark Thomas, LEAD ATTORNEY, Dykema Gossett PLLC, Ann Arbor, MI; David Matthew George, Krista L. Lenart, PRO HAC VICE, Dykema Gossett PLLC, Ann Arbor, MI.

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ORDER GRANTING IN PART, DENYING IN PART DEFENDANT'S MOTION TO DISMISS

JON S. TIGAR, United States District Judge.

In this action for breach of implied warranty, violations of California's Unfair Competition Law, and related claims, Defendant Ford Motor Company moves to dismiss each of Plaintiffs' claims for failure to state a claim upon which relief can be granted. For the reasons set forth below, the motion to dismiss will be granted in part and denied in part.

I. BACKGROUND

Plaintiffs Jean MacDonald, Veronica Aguirre, and Brian Barbee bring this action individually and on behalf of a similarly situated class of individuals who purchased or leased 2005-2008 Ford Escape Hybrid, or 2006-2008 Mercury Mariner Hybrid vehicles (" Class Vehicles" ). Second Am. Compl. (" SAC" ), ECF No. 27 ¶ 1. Plaintiffs allege that the Class Vehicles, equipped with the Motor Electronic Cooling System (" MECS" ), contain defective coolant pumps, and that Defendant, Ford Motor Company, knew of the defect and failed to inform consumers. Plaintiffs further allege that the defect caused abrupt loss of power, often at highway speeds, and accordingly presented a safety risk to drivers. Id. ¶ 5.

Plaintiff Jean MacDonald purchased a new 2007 Ford Escape Hybrid on or around March 11, 2007. SAC ¶ 23. MacDonald's vehicle was manufactured, sold, and warranted by Ford. Id. On December 29, 2012, when her odometer read approximately 43,146 miles, MacDonald was driving her Escape Hybrid on a freeway when the " Stop Safely Now" light came on and the vehicle lost power. Id. ¶ 25. MacDonald was able to drive the vehicle at approximately five miles per hour through freeway traffic to the shoulder of the highway. Id. She contacted a Ford dealership that diagnosed the issue over the phone as having to do with the MECS coolant pump. Id. MacDonald was able to restart her car and took it to a Ford dealership. Id. Her repair order states, " FOUND MALFUNCTION WITH THE MOTOR ELECTRONICS COOLING PUMP. Id. NEEDS PUMP REPLACED AND RETESTED." Id. The MECS coolant pump was replaced, at a total cost of $767.58. Id.

Plaintiff Veronica Aguirre purchased a new 2007 Ford Escape Hybrid on December 5, 2006. Id. ¶ 29. On December 26, 2009, when her odometer read approximately 62,753 miles, Aguirre was driving her Escape Hybrid on a freeway when the " Stop Safely Now" light came on and the vehicle lost power. Id. ¶ 31. Mechanics at the Ford authorized dealership diagnosed the issue as the coolant pump, and replaced it at a total cost of $767.58. Id.

On March 15, 2013, when her odometer read approximately 125,962 miles, Aguirre

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was driving her vehicle when the " Stop Safely Now" light came on and again her car lost power. Id. ¶ 32. She had the vehicle towed to a Ford dealership where the mechanics diagnosed the issue as the coolant pump, and replaced it at a cost of $754.05. Id.

Plaintiff Brian C. Barbee purchased a new 2008 Ford Escape Hybrid on February 11, 2008. Id. ¶ 36. On February 18, 2013, when his odometer read approximately 47,793 miles, Barbee was driving his vehicle when a warning light came on instructing him to pull over and stop his vehicle. Id. ¶ 38. The vehicle then surged forward. Id. Upon inspection, the dealership personnel determined that the vehicle's electronic cooling motor system had failed. Id. The repair cost Barbee $552.83. Id.

Following the repairs, Barbee sent a letter to Ford, requesting that Ford cover the costs of the repair and the tow. Id. ¶ 39. Ford denied Barbee's request. Id.

Each Plaintiff alleges that a factor in purchasing his or her vehicle was passenger safety. Id. ¶ ¶ 26, 33, 40. Prior to purchasing their vehicles, Plaintiffs took time and effort to compare the Escape Hybrid with other similar and competing vehicles. Id. Plaintiffs also reviewed their vehicles' Monroney window stickers [1] or Ford's website prior to purchasing their vehicles. Id.

Plaintiffs allege that had Ford disclosed the MECS coolant pump defect to them prior to the purchase of their vehicles, they would not have purchased them, or would have paid less. Id. ¶ ¶ 27, 33, 41. They further allege that malfunction of MECS is widespread in the Class Vehicles as a result of a design or manufacturing defect, and that this defect was known to Ford at the time of sale. On those grounds, Plaintiffs assert the following claims against Ford: (1) violation of California's Consumer Legal Remedies Act, Cal. Civil Code § 1750, et seq. ; (2) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq ; .(3) breach of implied warranty pursuant to California's Song-Beverly Consumer Warranty Act, Cal. Civil Code § § 1792 and 1791.1, et seq. ; and (4) breach of implied warranty pursuant to the federal Magnuson-Moss Warranty Act pursuant to 15 U.S.C. § 2301.

II. LEGAL STANDARD

In considering a motion to dismiss, courts accept the material facts alleged in the complaint, together with reasonable inferences to be drawn from those facts, as true. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). However, " the tenet that a court must accept a complaint's allegations as true is inapplicable to threadbare recitals of a cause of action's elements, supported by mere conclusory statements." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

In addition, to survive a motion to dismiss, a plaintiff must plead " enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Plausibility does not mean probability, but it requires " more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. " A claim has facial plausibility when the plaintiff pleads factual

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content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

Where a Plaintiff pleads fraud, he must " state with particularity the circumstances constituting fraud." Fed.R.Civ.P. 9(b). The allegations must be specific enough to give a defendant notice of the particular misconduct alleged to constitute the fraud such that the defendant may defend against the charge. Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). In general, allegations sounding in fraud must contain " an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Swartz v. KPMG LLP, 476 F.3d 756, 765 (9th Cir. 2007).

However, " [m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed.R.Civ.P. 9(b). In addition, the pleading standard may be relaxed as to matters that are exclusively within the opposing party's knowledge. Moore v. Kayport package Exp., Inc., 885 F.2d 531, 540 (9th Cir. 1989).

III. ANALYSIS

Ford moves to dismiss each of Plaintiffs' claims for failure to state a claim upon which relief can be granted. The Court will address each claim in turn.

A. Consumer Legal Remedies Act, Cal. Civil Code § 1750, et seq.

" The CLRA prohibits 'unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.'" Wilson v. Hewlett--Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012) (quoting Cal. Civ. Code § 1770(a)). This prohibition bars a representation that " goods . . . have characteristics which they do not have," or that goods are " are of a particular standard, quality, or grade . . . if they are of another." Cal. Civ. Code § § 1770(a)(5), (7). It likewise bars omission of any material fact relating to those goods. See LiMandri v. Judkins, 52 Cal.App.4th 326, 337, 60 Cal.Rptr.2d 539 (1997). A manufacturer has a duty to disclose a defect when it has exclusive knowledge of material facts not known to the plaintiff. Id.

Plaintiffs allege that Ford violated California's Consumer Legal Remedies Act (" CLRA" ), Cal. Civil Code § 1770(a), by failing to disclose that the coolant pumps were defective. SAC ¶ ¶ 90, 92. They allege that the defect created a safety hazard by causing a sudden loss of forward propulsion, and loss of vehicle control, often at highway speeds. Id. ¶ ¶ 52-53, 96-98. Plaintiffs further allege that Ford knew that the pumps were defective, was under a duty to disclose the defect to consumers, and as a result of failing to disclose those defects, harmed Plaintiffs. Id. ¶ ¶ 92-94.

Ford does not dispute that the alleged defect is a material safety hazard, but moves to dismiss on the grounds that Plaintiffs do not sufficiently allege that Ford knew of a defect at the time of sale, and that Plaintiffs fail to allege the nature of Ford's omission or misrepresentation with sufficient particularity. Id.

1. Knowledge

To state a claim under the CLRA a plaintiff must show not only that a defect existed at the time of sale, but that the defendant knew of the defect and sold the product nonetheless. Wilson, 668 F.3d at 1145; Cal. Civ. Code § 1770(a). Ford's motion to dismiss Plaintiffs' CLRA claim rests on its assertion that Plaintiffs have

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not sufficiently shown Ford's knowledge of a defect at ...


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