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Becerra v. General Motors LLC

United States District Court, S.D. California

March 10, 2017

ARMANDO J. BECERRA, et al, Plaintiffs,
v.
GENERAL MOTORS LLC AND DOES 1 through 100, Defendant.

          ORDER

          WILLIAM Q. HAYES United States District Judge

         The matter before the Court is the Motion to Dismiss the Amended Complaint filed by Defendant General Motors LLC (“Defendant”). (ECF No. 27).

         I. Introduction

         This case was initiated on October 19, 2015 when Plaintiffs Armando J. Becerra and Guillermo Ruelas, on behalf of themselves and those similarly situated, filed a Complaint. (ECF No. 1). On January 25, 2016, Defendant filed a motion to dismiss. (ECF No. 15). On February 11, 2016 (ECF No. 17), and April 15, 2016 (ECF No. 22), the Court issued orders granting Plaintiffs two extensions to file an amended complaint. On April 29, 2016, Plaintiffs Armando J. Becerra, Guillermo Ruelas, Robert Stewart, and Steve Wilson, on behalf of themselves and those similarly situated (“Plaintiffs”) filed the Amended Complaint. (ECF No. 23). On May 9, 2016, the Court issued an order denying Defendant's motion to dismiss (ECF No. 15) as moot. (ECF No. 24).

         On July 28, 2016, Defendant filed the Motion to Dismiss the Amended Complaint. (ECF No. 27). On August 8, 2016 (ECF No. 29) and October 26, 2016 (ECF No. 33), the Court issued orders granting Plaintiffs two extensions to file a response to the Motion to Dismiss the Amended Complaint. On November 2, 2016, Plaintiffs filed a response. (ECF No. 34). On December 15, 2016, the Court granted Defendant an extension to file a reply. (ECF No. 36). On December 30, 2016, Defendant filed a reply (ECF No. 37) and a Request for Judicial Notice (ECF No. 38).

         II. Allegations of the Amended Complaint (ECF No. 23)

         Plaintiffs allege that Defendant manufactured trucks that “were sold with inadequate headlights which do not illuminate the road well enough for safe night driving” and that “give[] drivers much less time to identify and react to other cars, pedestrians, or obstacles.” (ECF No. 23 at ¶ 1). Plaintiffs allege that Defendant “has long known about the problem but has not notified consumers.” Id. at ¶ 4. Plaintiffs allege that the vehicles at issue are “2014-2015 model year GMC Sierra Vehicles that were factory installed with a single filament bulb headlight system, including 2014-2015 model year GMC Sierra 1500, 2015 model year GMC Sierra 2500HD, and 2015 model year GMC Sierra 3500HD.” Id. at ¶ 18. The Amended Complaint lists six individual Plaintiffs: Armando J. Becerra, who allegedly purchased his vehicle on or about August 14, 2013 in Escondido, California; Guillermo Ruelas, who allegedly purchased his vehicle in August 2013 in Bakersfield, California; Robert Stewart, who allegedly purchased his vehicle in Silsbee, Texas in May 2013; and Steve Wilson, who allegedly purchased his vehicle in Center, Texas in February 2014. Id. at ¶¶ 9-12.

         Plaintiffs allege that “the headlights are inadequate for safe night driving” Id. at ¶¶ 19-31. Plaintiffs allege that even when a driver switches to high beam headlights, “the lights still fail to adequately and safely illuminate the road. At 60 mph, a driver has 250 feet of visibility, or less than three seconds to react and come to a stop. However, over 300 feet is typically needed to bring a vehicle to a stop from 60 miles an hour, if reaction time is included.” Id. at ¶ 31.

         Plaintiffs allege that “[t]he lack of effectiveness of the headlights is due to changes [Defendant] made in the bulbs, assembly, and operation of the headlights.” Id. at ¶ 32. “In earlier models, [Defendant] used a reflector-style headlight with two independent headlight systems, one for high beams and one for low beams, each with its own bulb, a lens, a reflector, housing and a voltage source. For the vehicles at issue in this case, GM changed to a projector-style headlight with a single bulb, a smaller reflector, two lenses, a shutter to switch between high and low beams and a single voltage source.” Id. at ¶¶ 33-34. Plaintiffs allege that Defendant's “new configuration is much less effective because the shutter causes dark bands in the low beam configuration[.]” Id. at ¶ 35.

         Plaintiffs allege that Defendant “has admitted in its Technical Service Bulletins [that] the voltage is insufficient.” Id. Plaintiffs allege that as of March 7, 2016, the database of the National Highway Traffic Safety Administration (“NHTSA”) contains 121 “detailed consumer complaints about the inadequate headlights of the Vehicles.” Id. at ¶ 38. Plaintiffs allege the consumer complaints “detail the headlight performance problems and difficulties concerning night time visibility when driving the Vehicles” and “illustrate [Defendant's] recalcitrance and refusal to acknowledge and correct these issues even when directly confronted and in the face of numerous complaints.” Id. at ¶ 74. Plaintiffs allege that Defendant “has redesigned [its] headlights to a different system for the 2016 model year trucks[, ]” and “[i]t appears that there are currently zero NHTSA complaints concerning the 2016 GMC Sierras.” Id. at ¶ 41.

         Plaintiffs allege that in March and June 2015, Defendant issued Technical Service Bulletins to its dealerships stating that “Some customers may comment of poor headlight performance when driving in very dark rural areas. While the headlights meet all Federal Motor Vehicle Safety Standard requirements . . . customers may request better headlight performance for these very dark rural areas.” Id. at ¶¶ 42-43. Plaintiffs allege that according to one of the Bulletins, Defendant “increased the voltage by .4 Volts in the new bulbs, but that customers have not found the increase to provide adequate illumination” and “Plaintiffs who have had the voltage upgrade still experience substandard illumination.” Id. at ¶¶ 48-49. Plaintiffs allege that “[Defendant] and its dealerships were fully aware of the inadequacy of the headlights.” Id. at ¶ 51. Plaintiffs allege that Defendant violated the Transportation Recall Enhancement, Accountability, and Documentation (“TREAD”) Act and the relevant Federal Safety Standard set by NHTSA. Id. at ¶¶ 52-57.

         Plaintiffs “bring this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and 23(b) on behalf of themselves and all others similarly situated as members of the proposed class, defined as: All current or former purchasers and lessees of one or more of the Vehicles who purchased or leased their Vehicles in the United States (other than for purposes of resale or distribution).” Id. at ¶ 75.

         Plaintiffs bring the following causes of action: (1) violations of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq.; (2) violations of the Consumers Legal Remedies Act Cal. Civ. Code § 1750, et seq. (“CLRA”); (3) violation of Cal. Bus. & Prof. Code § 17200, et seq., Unfair Competition Law (“UCL”); (4) breach of Song-Beverly Warranty Act (Express Warranty); (5) breach of Song-Beverly Warranty Act (Implied Warranty); (6) Breach of Implied Warranty of Merchantability, Tex. Bus. & Com. Code Ann. § 2.314; (7) Violation of Texas Deceptive Trade Practices Act (“DTPA”), Tex. Bus. & Com. Code § 17.50; (8) “Unfair and Deceptive Acts and Practices Under The Various State Laws In Which Class Members Reside[;]” (9) Fraudulent Concealment; and (10) Unjust Enrichment.

         Plaintiffs seek class certification and an order enjoining Defendant from continuing the unfair business practices alleged in the Amended Complaint. Plaintiffs seek an order from the Court requiring Defendant to institute a recall or otherwise repair the vehicles at issue. Plaintiffs seek actual damages and an award of attorneys' fees and costs.

         III. Motion to Dismiss

         A. Request for Judicial Notice (ECF No. 38)

         “As a general rule, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (citation omitted). There are “two exceptions to the requirement that consideration of extrinsic evidence converts a 12(b)(6) motion to a summary judgment motion.” Id. First, Federal Rule of Evidence 201 provides that “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it is generally known within the trial court's territorial jurisdiction; or can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b). Second, under the doctrine of incorporation by reference, courts may “take into account 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.” Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (citation and quotation marks omitted).

         Plaintiffs request that the Court take judicial notice of a 2007 National Highway Traffic Safety Administration Report to Congress, and a 2008 National Highway Traffic Safety Administration Research Findings Report. (ECF No. 38). The Court grants Defendant's Request for Judicial Notice (ECF No. 38), and the Court takes judicial notice of these documents - which are not subject to reasonable dispute over their authenticity. See Fed. R. Evid. 201(b); Lee, 250 F.3d at 690; Knievel, 393 F.3d at 1076.

         B. Standard of Review

         Federal Rule of Civil Procedure 12(b)(6) provides for dismissal for “failure to state a claim upon which relief can be granted[.]” Fed.R.Civ.P. 12(b)(6). Federal Rule of Civil Procedure 8(a)(2) provides that “[a] pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief[.]” Fed.R.Civ.P. 8(a)(2). “A district court's dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is proper if there is a ‘lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.'” Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.1988)).

         “[A] plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. at 679. “In sum, for a complaint to survive a motion to dismiss, the non-conclusory ‘factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009).

         Additionally, claims sounding in fraud must comply with the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), which requires that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). “To comply with Rule 9(b), allegations of fraud must be specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong.” Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001) (citation omitted). Rule 9(b) “requires more specificity including 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, 764 (9th Cir. 2007) (citation omitted).

         C. Analysis

         1. Legally Cognizable Injury

         Defendant contends this action should be dismissed because Plaintiffs have not alleged any injury or damages that would entitle them to relief. Defendant contends that each of Plaintiffs' claims require a showing of a cognizable injury. Defendant contends that Plaintiffs fail to allege that the “headlights malfunction, fail to operate as designed, or violate any applicable legal standard.” (ECF No. 27-1 at 16). Defendant contends that a product defect claim requires a showing of an actual product malfunction, or a manifested defect in the product. Defendant contends that Plaintiffs' “vague and general assertions of damages” are insufficient to state a claim for any of their causes of action. Id. at 18. Defendant contends that Plaintiffs' allegations concerning risk of future harm prevent a finding that Plaintiffs have suffered a legally cognizable injury.

         Plaintiffs contend that they have suffered damages in the form of economic harm and loss of usefulness of the vehicles, and exposure to an increased risk of automobile accidents. Plaintiffs contend that the headlights are defective because they are too dim for safe driving, and the alleged “defect manifests every time the headlights are turned on.” (ECF No. 34 at 14).

         Plaintiffs cannot maintain their causes of actions without alleging a legally cognizable injury.[1] The Court of Appeals has rejected a finding of cognizable injury when “[t]he risk of injury the plaintiffs allege is not concrete and particularized as to themselves.” Birdsong v. Apple, Inc., 590 F.3d 955, 960 (9th Cir. 2009). In Birdsong, the plaintiffs failed to plead a cognizable injury when they claimed they would suffer hearing loss from using an iPod music player. Id. The Court of Appeals found that “[a]t most, the plaintiffs plead a potential risk of hearing loss not to themselves, but to other unidentified iPod users who might choose to use their iPods in an unsafe manner” by raising the volume to a hazardous level. Id. In this case, Plaintiffs allege that when they operate the vehicles, Plaintiffs have no choice but to utilize the allegedly dim headlights; for example, Plaintiffs allege that “the lights still fail to adequately and safely illuminate the road” even if a driver switches from low beams to high beams. (ECF No. 23 at ¶ 31).

         Defendant relies on Birdsong to contend that as a matter of law, a product defect cause of action cannot be satisfied without a showing of a “actual product malfunction or manifested defect.” (ECF No. 27-1 at 16) (citing Birdsong, 590 F.3d at 961). In Birdsong, the Court of Appeals found that any injury to the plaintiffs was merely “hypothetical” because the iPod devices “have the ‘capability' of producing unsafe levels of sound and that consumers ‘may' listen to their iPods at unsafe levels combined with an ‘ability' to listen for long periods of time.” 590 F.3d at 961. In this case, Plaintiffs allege that the vehicles provide unsafe lighting conditions whenever they are engaged in a dark area. (ECF No. 23 at ¶ 1). While Plaintiffs “may” choose to use their headlights at any time, the threat of injury in this case is not hypothetical because California state law requires Plaintiffs to use headlights while driving in the dark. Birdsong, 590 F.3d at 961; see Cal. Veh. Code § 24400(b) (“A motor vehicle . . . shall be operated during darkness . . . with at least two lighted headlamps”).

         Further, Plaintiffs have pled facts sufficient to support an inference that they did not receive the benefit of their bargain with Defendant. See Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F.Supp.2d 962, 972 (C.D. Cal. 2014) (“There can be no serious dispute that a purchaser of a product who receives the benefit of his bargain has not suffered . . . injury-in-fact traceable to the defendant's conduct.”). When Plaintiffs sought to purchase a vehicle, “[s]afe and functional headlights were material” to that decision. (ECF No. 23 at ¶ 17). Plaintiffs allege that the brightness of the headlights have “lead[] to difficulty spotting any pedestrians, animals, signage, and road shoulder lines.” Id. at ¶ 20. Plaintiffs allege that after several individual Plaintiffs experienced driving in the evening with the headlights, these drivers purchased new bulbs and sought to trade in their vehicles. Id. at ¶¶ 9-11. Plaintiffs also allege that the headlights remained too dim even after switching to high beam headlights; this factual allegation further supports Plaintiffs' injury claim. (ECF No. 23 at ¶ 31). See Tae Hee Lee, 992 F.Supp.2d at 972 (declining to find injury because despite alleged defect, car brakes would still “automatically slow the vehicle in the event of an unavoidable collision”).

         Plaintiffs have pled facts sufficient to support an inference that they suffered a legally cognizable injury in being prevented from properly observing signage and pedestrians while driving the vehicles in dark or rural areas. See Tae Hee Lee, 992 F.Supp.2d at 972 (finding the plaintiffs failed to allege economic injury “because they have not had any negative experience with” allegedly defective anti-lock brakes, and the brakes worked properly “in the event of an unavoidable collision”); In re Toyota Motor Corp. Hybrid Brake Mktg., 915 F.Supp.2d 1151, 1159 (C.D. Cal. 2013) (finding the plaintiff's “benefit-of-the-bargain argument” failed because the plaintiff “had no problem with the braking performance of his vehicle” and drove “without incident.”). The Court concludes that Plaintiffs have alleged facts sufficient to support the conclusion that they suffered a legally cognizable injury.

         2. ...


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