United States District Court, N.D. California
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION TO DISMISS
TIGAR United States District Judge.
the Court is Defendant American Honda Motor Co., Inc.'s
Motion to Dismiss Certain Counts in Plaintiffs' Complaint
and Defendant's Requests for Judicial Notice. ECF Nos.
42, 44, 59. Plaintiffs oppose both the motion to dismiss and
Defendant's first request for judicial
notice. ECF No. 56 & 57. The Court will grant the
motion to dismiss in part and deny it in part, and grant the
requests for judicial notice.
purported class action, twelve named plaintiffs (collectively
“Plaintiffs”) allege that they purchased new or used
Acura vehicles manufactured by Defendant American Honda Motor
Company, Inc. (“AHM” or “Honda” or
“Acura”). ECF No. 29. Their Acura vehicles were
equipped with a defective Bluetooth system, the Hands Free
Link (“HFL”) system, that caused a
“parasitic drain” on their electrical systems.
Id. The system was advertised as a convenient and
safe way for a driver to connect her phone to the vehicle and
enjoy hands-free phone calls and other advantages.
Id. ¶ 194. Plaintiffs bought AHM's vehicles
based on Acura's reputation for luxury and paid a premium
for the HFL system. Id. ¶ 196.
a few years of purchase, Plaintiffs began to experience
electronic issues with their vehicles. See Id.
¶ 206. Most frequently, Plaintiffs experienced premature
battery death. Id. Plaintiffs were forced to
purchase several new batteries at their own expense, as well
as make other costly repairs. Unbeknownst to the Plaintiffs,
their electronic systems were failing because the HFL system
drained the battery at an unusually high rate and affected
other electronic devices, such as the alternator.
Id. ¶ 198. Since at least 2005, consumers such
as Plaintiffs purchased Defendant's vehicles without
knowing that they were defective and posed a safety hazard.
Id. ¶¶ 206-207, 210.
however, was aware of the defect in the HFL's design.
Id. ¶ 199. On June 29, 2005, AHM issued an
internal Technical Service Bulletin (“TSB”) to
dealers that stated that the HFL system “does not
work.” Id. The TSB stated that the HFL system
may cause a dead or low battery. Id. While it was
clear there was a defect, it “effectively elude[d]
diagnosis.” Id. ¶ 200. “Once the
HandsFreeLink™ defect compromises the battery, the
system can ‘reset, ' hiding the problem until the
system gets stuck again.” Id. In 2008 and
2012, AHM issued similar TSBs notifying dealers that the HFL
system did not function properly. Id. ¶ 202-
203. The only “fix” was to replace the HFL
system, but that did not solve the problem because the new
system might have had the same defect. Id. ¶ at
207. The Defendant did not disclose the defect to Plaintiffs.
As the HFL system often went unidentified as the cause for
the hastened drain on Plaintiffs' electrical systems,
Plaintiffs allege they paid for new batteries and other
electronic parts more frequently than they otherwise would
have. Id. ¶ 209.
also allege that in some circumstances the defect caused a
safety hazard. Id. ¶ 210. For instance,
Plaintiff Gerstle's 2004 Acura TL stopped operating while
he was on a highway about to enter a tunnel. Id.
¶ 168. Numerous complaints have been lodged with the
National Highway Transportation Safety Administration
(“NHTSA”), alleging that the defect caused
vehicles to stop operating while on the road. Id.
Plaintiffs allege they did not know that the cause of their
problems was the HFL system. Id. ¶ 8-185. If
they had known of the problem, they would not have purchased
their vehicles or would have paid less for them. Id.
filed this putative class action against Defendant on August
3, 2016. ECF No. 1. Plaintiffs subsequently filed a first
amended complaint (“FAC”) on October 17, 2016,
alleging sixty-nine counts under eleven states' laws
related to the defective HFL in their vehicles. ECF No. 29.
Generally, plaintiffs' claims relate to state consumer
protection statutes, fraudulent concealment, breaches of
express and implied warranty pursuant to state and federal
laws, and unjust enrichment. Defendant previously filed a
motion to transfer venue, which the Court denied.
See ECF No. 48. Defendant now moves to dismiss all
of Plaintiffs' claims brought as a national class,
Plaintiffs' request for injunctive relief, most of
Plaintiffs' claims brought under different statutory
laws, and breaches of contract claims because they are
untimely or fail as a matter of law. ECF No. 42.
requests the Court take judicial notice of the Acura Warranty
Booklets applicable to Plaintiffs' vehicles and copies of
the TSBs that Plaintiffs referred to in their FAC. ECF No. 44
& 59. A court may take judicial notice of documents whose
contents are alleged in the complaint and whose authenticity
no party questions. Branch v. Tunnell, 14 F.3d 449,
454 (9th Cir.1994). A court may also take judicial notice of
documents incorporated by reference in the complaint, but
which are not physically attached to the pleading.
Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005)
(“The rationale of the ‘incorporation by
reference' doctrine applies with equal force to internet
pages as it does to printed material.”).
argue that the warranties do not fall under the incorporation
doctrine and are not relevant or necessary. ECF No. 44 at 2.
The Court disagrees. The warranties are relevant because they
detail the terms of the warranty presented to Plaintiffs at
the time they purchased their vehicles. The TSBs contain the
same language Plaintiffs have quoted or referred to in their
FAC. The Court may consider the terms of the express
warranties where those terms are not in dispute, See Lee
v. City of Los Angeles, 250 F.3d 668, 689-90 (9th Cir.
2001), particularly given that Plaintiffs have brought claims
for breach of express warranty. See ECF No. 29 at
of fraud are subject to a heightened pleading standard.
“In alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or
mistake.” Fed.R.Civ.P. 9(b). Defendant moves under
Federal Rules of Civil Procedure Rule 9(b) to dismiss
Plaintiffs' fraudulent concealment claims, California
Consumer Legal Remedies Act (“CLRA”) claims and
Unfair Competition Law (“UCL”) claims, on the
basis that they fail to allege any factual circumstances with
the required specificity. See ECF No. 42. To satisfy
Rule 9(b), a complaint must supply “the circumstances
constituting the alleged fraud” with a description
“‘specific enough to give defendants notice of
the particular misconduct . . . so that they can defend
against the charge and not just deny that they have done
anything wrong.'” Kearns v. Ford Motor
Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (quoting
Bly-Magee v. California, 236 F.3d 1014, 1019 (9th
knowledge, and other conditions of a person's mind”
need not be stated with particularity, and “may be
alleged generally.” Fed.R.Civ.P. 9(b). Fraud claims
must allege “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) (per curiam) (internal quotation marks omitted);
see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d
1097, 1106 (9th Cir. 2003) (“Averments of fraud must be
accompanied by the who, what, when, where, and how of the
misconduct charged.” (internal quotation marks
omitted)). “Plaintiff[s] need not provide every factual
detail supporting [their] fraud claim. Instead, a plaintiff
must set forth what is false or misleading about a statement,
and why it is false.” In re GlenFed, Inc.
Securities Litig., 42 F.3d 1541, 1548 (9th Cir. 1994)
(en banc), superseded by statute on other grounds as stated
in Marksman Partners, L.P. v. Chantal Pharmaceutical
Corp., 927 F.Supp. 1297, 1309 (C.D. Cal. 1996).
also argues the Plaintiffs fail to state a claim under
Federal Rules of Civil Procedure 12(b)(6). While the Court
accepts the material facts alleged in the complaint, along
with all reasonable inferences to be drawn from those facts,
as true, Navarro, 250 F.3d at 732, “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 (2009). To be entitled to the presumption of truth, a
complaint “must contain sufficient allegations of
underlying facts to give fair notice and to enable the
opposing party to defend itself effectively.” Starr
v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
Application of California Law
argues that the presumption against extraterritoriality and
conflict of law principles should preclude Plaintiffs from
applying California law to its nationwide claims. ECF No. 42
at 17-20. Plaintiffs counter that California law should be
applied to the nationwide class because Defendant is located
in California and has violated various California consumer
protection laws and warranties governed by California law.
ECF No. 29 ¶¶ 186, 240-346. The Court concludes
that the presumption against extraterritorial application of
California law does not govern and that a conflict of law
analysis is premature.
Presumption Against Extraterritorial Application of
argues that a nationwide class cannot rely on California law
because not all Plaintiffs purchased their vehicles in
California. ECF No. 42 at 17.
California has a presumption against extraterritorial
application of its own law, Sullivan v. Oracle
Corp., 51 Cal.4th 1191, 1207 (2011), “state
statutory remedies may be invoked by out-of-state parties
when they are harmed by wrongful conduct occurring in
California.” TRC & Assocs. v. NuScience
Corp., No. 2:13-CV-6903-ODW CWX, 2013 WL 6073004, at *5
(C.D. Cal. Nov. 18, 2013), quoting Tidenberg v. Bidz.com,
Inc., No. 08-cv-5553-PSG, 2009 WL 605249, at *4 (C.D.
Cal. Mar. 4, 2009). To determine whether sufficient wrongful
conduct occurred in California, “the courts consider
where the defendant does business, whether the
defendant's principal offices are located in California,
where class members are located, and the location from which
advertising and other promotional literature decisions were
made.” In re Toyota Motor Corp., 785 F.Supp.2d
883, 917 (C.D. Cal. 2011). The Court looks to the nexus
between California and the alleged wrongful conduct to
determine whether sufficient wrongful conduct occurred in
California. See Ehret v. Uber Techs., Inc., 68
F.Supp.3d 1121, 1132 (N.D. Cal. 2014).
Ehret, the plaintiffs alleged that California law
should apply to their claims, despite the presumption against
extraterritoriality, because Uber's misrepresentations
were developed in California, contained on websites and
Uber's application maintained in California, and because
billing and payment of services went through servers located
in California. Ehret, 68 F.Supp.3d at 1132. The
court found that those allegations presented “a
sufficient nexus between California and the
misrepresentations which form[ed] the basis of [the
plaintiff's] claims.” Id. Similarly here,
Plaintiffs allege that Defendant has conducted and maintained
operations in California for several decades. ECF No. 29
¶¶ 186-189. Moreover, Plaintiffs allege that
Defendant is headquartered in Torrance, California, where it
conducts “sales, service, and coordinating
functions” and where decisions are made regarding the
manufacture, development, distribution, marketing, sales, and
serving of Acura-brand automobiles. Id. ¶190.
These allegations form the requisite connection to
cites In re Toyota Motor Corp., 785 F.Supp.2d 883,
916-916 (C.D. Cal. 2011) for the proposition that the mere
fact that the Defendant is located in California does not
provide sufficient contacts. There, the court dismissed a
nationwide class because the plaintiffs had failed to allege
that the advertising materials at issue were disseminated
from California. Id. But here, by contrast,
Plaintiffs have alleged that all decisions regarding the
marketing and sales of the HFL, including the decision to not
disclose the alleged defect, were “in whole or
substantial part” made from the Defendant's
Torrance, California headquarters. ECF No. 29 ¶ 190.
Moreover, when Defendant argued for a change of venue in a
prior motion, it stated that five of the six witnesses who
tested the HFL were located in California. ECF No. 32
¶¶ 10-11. Since AHM conducted marketing and
advertising in California and tested the HFL system in
California, the Court finds that Plaintiffs have alleged that
sufficient wrongful conduct occurred in California, and
therefore denies Defendant's motion to dismiss on this
Choice of Law
contends that California's choice of law rules bar the
nine non-California Plaintiffs from invoking California law.
ECF No. 42 at 18. Defendant asks the Court to apply the
three-part conflict of law test set out in Mazza v. Am.
Honda Motor Co., 666 F.3d 581, 590 (9th Cir. 2012) to
determine if California law should apply to the named
Plaintiffs' claims. Mazza 666 F.3d 590.
detailed choice-of-law analysis is a fact-heavy analysis and
is generally inappropriate on a motion to dismiss where the
parties have not yet developed a factual record. Clancy
v. The Bromley Tea Co., 308 F.R.D. 564, 572 (N.D. Cal.
2013). Defendant argues that the Court “should
[nonetheless] undertake the Mazza inquiry now
because Mazza's reasoning ‘applies
generally and is instructive even when addressing a motion to
dismiss.'” Frezza v. Google Inc., No.
5:12-CV-00237-RMW, 2013 WL 1736788 at *6 (C.D. Cal. Ap. 22,
2013). That is only true, however, when some discovery has
taken place. Such was the case in Todd v. Tempur-Sealy
Int'l, Inc., No. 13-CV-04984-JST, 2016 WL 344479, at
*6 (N.D. Cal. Jan. 28, 2016), where this Court concluded that
the choice-of-law analysis was appropriate because “of
the advanced stage of litigation and the extensive discovery
that [had] already been completed.” Id. at *6.
Defendant's reliance on Todd is thus misplaced.
ECF No. 42 at 19, fn 2. Even there, this Court noted that
dismissal at the pleading stage would be premature prior to
discovery and the development of a factual record.
Todd 2016 WL 344479, at *6.
the Court has no factual record to decide which state has a
greater interest in applying its laws. While Mazza
will of course be relevant to the decision whether to certify
any proposed class or sub-class, at this early stage of the
litigation, ‘it would be premature to speculate about
whether the difference in various states' consumer
protection laws are material in this case.'”
Clancy, 308 F.R.D. at 572 (quoting Forcellati v.
Hyland's Inc., 876 F.Supp.2d 1155, 1159 (C.D. Cal.
2012)). The Court declines to dismiss any of Plaintiffs'
claims on choice-of-law grounds now.
Primary Jurisdiction as Grounds for Dismissing Request for
argues that the Court should dismiss Plaintiffs' request
for injunctive relief because the National Highway Traffic
Safety Administration (“NHTSA”) has general
authority over Plaintiffs' claims. ECF No. 42 at 21-22.
primary jurisdiction doctrine allows courts to stay
proceedings or to dismiss a complaint without prejudice
pending the resolution of an issue within the special
competence of an administrative agency.” Clark v.
Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir. 2008).
The Ninth Circuit provides four factors for consideration:
“(1) the need to resolve an issue that (2) has been
placed by Congress within the jurisdiction of an
administrative body having regulatory authority (3) pursuant
to a statute that subjects an industry or activity to a
comprehensive regulatory authority that (4) requires
expertise or uniformity in administration.” Syntek
Semiconductor Co. v. Microchip Tech. Inc., 307 F.3d 775,
781 (9th Cir. 2002). Given the nature of Plaintiffs'
claims and the lack of conflict with any current agency
action, the Court is not persuaded that the primary
jurisdiction doctrine applies.
fails to argue why court action would infringe on the
NHTSA's authority or why resolution of Plaintiffs'
claims requires special agency expertise. ECF No. 42 at
21-22. Courts have held that the primary jurisdiction
doctrine does not apply if the defendant fails to identify
“any specific conflict” with an on-going NHTSA
investigation or regulation. Kent v. DaimlerChrysler
Corp., 200 F.Supp.2d 1208, 1218 (N.D. Cal. 2002)
(failing to show “the need for ‘uniformity and
consistency in the regulation of business'” because
defendant did not point to any conflicts with the NHTSA
actions or regulations). Courts have also refused to invoke
the primary jurisdiction doctrine when plaintiffs are
bringing state contract and tort claims, regardless of any
NHTSA action. See Lassen v. Nissan N. Am., Inc., No.
CV1506491ABMRWX, 2016 WL 5868101, at *7 (C.D. Cal. Sept. 30,
2016) 2016 WL 5868101, at *7 (finding that safety, not NHTSA
authority, will be the overriding factor when deciding to
grant injunctive relief in the form of a recall). Here,
Defendant only generally asserts that the request for
injunctive relief is within the province of the NHTSA and
that courts routinely defer to the NHTSA's general
authority to “investigate and remedy design defects in
vehicles in circumstances” where an administrative
remedy is available. ECF No. 61 at 7,  see also
49 U.S.C.A. § 30120 (2016) (NHTSA's authority to
issue recalls). Although consumers have complained to the
NHTSA, ECF No. 29 ECF No. 29 ¶ 213, AHM cites no agency
investigation or action that would conflict with this case.
ECF No. 56 at 16. Plaintiffs bring their claims under state
laws, not the Safety Act, which grants the NHTSA its
authority. ECF No. 29; 49 U.S.C.A. § 30000 et.
seq. Accordingly, there is no conflict between this case
and any NHTSA action or authority that would require the
invocation of the primary jurisdiction doctrine.
Defendant makes no argument as to why any issue before the
Court requires the technical expertise or uniformity in
administration provided by the NHTSA. ECF No. 42 at 21-22;
ECF No. 61 at 11-12. “[W]arranty and consumer
protection claims based on an alleged design defect [that
are] . . . not based on NHTSA regulations, safety standards,
or agency-specific statutes” are “not outside the
conventional experiences of judges, and [do] not involve
issues that are within the NHTSA's discretion.”
Ford v. Ford Motor Co., No. CV 13-8335 PSG (SSX),
2014 WL 12570925, at *5 (C.D. Cal. Jan. 17, 2014). Such
claims therefore do not require application of the primary
jurisdiction doctrine. Id. In Ford,
plaintiffs argued that a specific axle design in certain Ford
Windstar minivans was defective because it was predisposed to
premature wear and failure. Id. The NHTSA had
already found that the design was defective. Id.
Even if the NHTSA had not made such a finding, the court
reasoned that the specificity of the design defect was a
narrow question of the kind commonly answered by courts.
complaint is similarly narrow. Plaintiffs allege that
Acura's HFL is defective because it drains the
vehicle's battery without the Plaintiffs' knowledge
and, therefore, causes economic harm. ECF No. 29 ¶¶
198-205. Plaintiffs do not assert that the HFL's design
does not comply with an industry-wide standard, nor do they
base their claims on an omitted safety feature. Instead, they
allege that the HFL is defectively designed because it causes
a parasitic draw on the electrical system. ECF No. 29 ¶
198. This narrow claim does not require the NHTSA's
there is little to no danger to the uniformity of
administration of the NHTSA's regulations, because
Plaintiffs' suit claims a broad putative class related to
one specific feature available in all Acura makes and models.
See Reniger v. Hyundai Motor Am., 122 F.Supp.3d 888,
907 (N.D. Cal. 2015). In Reniger, plaintiffs alleged
that the Kia Santa Fe had a safety defect that caused their
vehicles to stall. Id. at 891-982. The court
concluded that application of the primary jurisdiction
doctrine was improper because the suit was broadly styled to
capture many drivers during a certain timeframe, such that
there was no danger of inconsistent outcomes - particularly
given that “[t]here is no pending investigation and no
reason to believe that the NHTSA has any interest in this
case.” Id. at 907. Similarly, Plaintiffs here
have brought a broadly styled suit focused on a single,
common design defect, and there is no indication that the
NHTSA is addressing that defect. ECF No. 29 ¶¶
206-209. Plaintiffs' suit presents no danger to
Tolling of Statute of Limitations
allege that the statute of limitations should be tolled for
all claims based on the discovery rule, for unspecified
claims based on fraudulent concealment, and for all statutes
of limitations based on estoppel. No. 29 ¶¶
221-229. Defendant contends that Plaintiffs have not
adequately invoked the discovery rule, and that the statutes
of limitations for several of the claims are not subject to
tolling. Specifically, Defendant argues the following claims
are untimely: unjust enrichment under California, Delaware,
Florida, Kansas, and Virginia law; breach of the implied
warranty of merchantability and breach of the express
warranty under California, Delaware, Florida, Kansas,
Missouri, New Hampshire, Ohio, Texas, and Virginia law;
breach of the Magnuson-Moss Warranty Act; and violations of
consumer-protection statues under California, Delaware,
Florida, Kansas, Missouri, New Hampshire, Ohio, Texas, and
Virginia law. ECF No. 42 at 24-32.
allege that the “discovery rule” should toll all
applicable statutes of limitations. ECF No. 29 ¶¶
221-224. The discovery rule in California requires the
plaintiff to plead facts “which show (1) the time and
manner of discovery and (2) the inability to have made
earlier discovery despite reasonable diligence . . . .
However, mere conclusory assertions that delay in discovery
was reasonable are insufficient.” In re Conseco
Ins. Co. Annuity Mktg. & Sales Practices Litig., No.
C-05-04726 RMW, 2008 WL 4544441, at *8 (N.D. Cal. Sept. 30,
2008) (internal citations omitted); see also Asghari v.
Volkswagen Grp. of Am., Inc., 42 F.Supp.3d 1306, 1320-21
(C.D. Cal. 2013).
burden of pleading and proving belated discovery of a cause
of action falls on the plaintiff.” Inv'rs
Equity Life Holding Co. v. Schmidt, 195 Cal.App.4th
1519, 1533 (2011), as modified (June 15, 2011)
(internal citations omitted). To determine whether Plaintiffs
could not have reasonably discovered the cause of action
within the statute of limitations, they must allege the time
and manner by which they discovered the cause of action.
See Philips v. Ford Motor Co., No. 14-CV-02989-LHK,
2015 WL 4111448, at *8 (N.D. Cal. July 7, 2015); In re
Conseco Ins. Co. Annuity Mktg. & Sales Practices Litig.,
No. C-05-04726 RMW, 2008 WL 4544441, at *9 (N.D. Cal. Sept.
30, 2008), citing Community Case v. Boatwright, 124
Cal.App.3d 888, 900 (1981). Here, the Court is unable to
determine the date the statute of limitations began to run
because Plaintiffs do not provide the time and manner by
which each named Plaintiff discovered the alleged defect.
argues that Plaintiffs cannot assert the discovery rule to
toll the statute of limitations because Plaintiffs had notice
of the alleged wrongdoing and, through reasonable due
diligence, could have discovered the defect within the
respective statutes of limitations. ECF No. 42 at 22-23.
Before reaching those arguments, however, the Court examines
whether Plaintiffs have provided sufficient facts to invoke
the affirmative defense of the discovery rule, and concludes
that Plaintiffs fail to allege the time and the manner by
which each plaintiff discovered the defect that was affecting
the car battery. ECF No. 29 ¶¶ 221-224. Plaintiffs
may only benefit from the discovery rule when they can show
they acted reasonably and diligently. Plumlee v. Pfizer,
Inc., No. 13-CV-00414-LHK, 2014 WL 4275519, at *6 (N.D.
Cal. Aug. 29, 2014), aff'd, No. 14-16924, 2016
WL 6610223 (9th Cir. Nov. 9, 2016). The discovery rule may be
invoked for each named plaintiff based on the time and manner
provided for each named plaintiff. Id. at *8
(determining for each plaintiff if the discovery rule
properly tolled UCL and CLRA claims). For several Plaintiffs,
the Complaint asserts that the defect was brought to their
attention when they visited mechanics for assistance with
failing batteries and other electronics in their
vehicles. ECF No. 29. For the remaining Plaintiffs,
however, the FAC only alleges whether drivers had the HFL
disabled or not. Id. The Court will not infer a
discovery time and manner for each plaintiff where none is
the time and manner of discovery, the Court cannot establish
a tolling date or evaluate which date should be used when
deciding whether a plaintiff could have filed the suit on an
earlier date based on his or her reasonable due diligence.
The Court will allow Plaintiffs to amend their complaint to
provide the additional information required to invoke the