United States District Court, N.D. California
IN RE VOLKSWAGEN “CLEAN DIESEL” MARKETING, SALES PRACTICES, AND PRODUCTS LIABILITY LITIGATION This Relates To: Dkt. No. 2864
ORDER RE: ROBERT BOSCH GMBH AND ROBERT BOSCH
LLC'S MOTION TO DISMISS THE VOLKSWAGEN-BRANDED FRANCHISE
DEALERS AMENDED AND CONSOLIDATED CLASS ACTION
CHARLES R. BREYER United States District Judge
before the Court is a motion by Defendants Robert Bosch GmbH
and Robert Bosch LLC to dismiss the Volkswagen-branded
Franchise Dealers' Amended and Consolidated Class Action
Complaint. (Dkt. No. 2864.) In their Complaint, the Franchise
Dealers allege that the Bosch Defendants conspired with
Volkswagen to develop the defeat device that was
intentionally installed in Volkswagen diesel-engine vehicles
to evade U.S. emissions regulations. By participating in the
scheme, Plaintiffs allege that the Bosch Defendants violated
the Racketeer Influenced and Corrupt Organizations Act
(RICO), 18 U.S.C. § 1962(c) and (d). (Dkt. No. 1969.)
plaintiff brings a RICO claim against multiple defendants,
“[t]he requirements of § 1962(c) must be
established as to each individual defendant.” Craig
Outdoor Advert., Inc. v. Viacom Outdoor, Inc., 528 F.3d
1001, 1027 (8th Cir. 2008). Plaintiffs must therefore plead
facts that plausibly support that both Bosch GmbH and Bosch
LLC took “some part in directing [the RICO
enterprise's] affairs.” Reves v. Ernst &
Young, 507 U.S. 170, 179 (1993). Where, as here, the
alleged predicate acts of the RICO enterprise are acts of
mail and wire fraud (Compl. ¶ 363), Plaintiffs must also
“identify the role of each Defendant in the alleged
fraudulent scheme.” Swartz v. KPMG LLP, 476
F.3d 756, 765 (9th Cir. 2007) (quoting Moore v. Kayport
Package Express, Inc., 885 F.2d 531, 541 (9th Cir.
1989)). Plaintiffs do not need to allege that the Bosch
Defendants made false statements or used the mails or wires
in furtherance of the scheme, if such conduct can be
attributed to another member of the enterprise, such as
Volkswagen, see United States v. Stapleton, 293 F.3d
1111 (9th Cir. 2002); however, Plaintiffs must plead that
each Defendant knowingly participated in the scheme to
defraud, with specific intent to deceive, id. at
1116-18; see also Orr v. Bank of America, 285 F.3d
764, 782 (9th Cir. 2002).
have not satisfied these requirements. Their Complaint blurs
the lines between the conduct of Bosch GmbH on the one hand,
and Bosch LLC on the other. Many of the Complaint's
allegations are attributed only to “Bosch.” But
Plaintiffs define “Bosch” as “Bosch
GmbH” at one point in the Complaint (Compl. ¶ 3),
and as “Bosch GmbH, Bosch LLC, and Bosch CEO Volkmar
Denner” at another (id. ¶ 33). The result
is that the Court cannot confidently attribute many of the
allegations to one Defendant or the other. The broader
definition of “Bosch” is also not appropriate, as
“[a] plaintiff may not simply lump together multiple
defendants without specifying the role of each defendant in
the fraud.” In re Toyota Motor Corp. Unintended
Acceleration Mktg., Sales Practices, & Prod. Liab.
Litig., 826 F.Supp.2d 1180, 1201 (C.D. Cal. 2011)
(citing Swartz, 476 F.3d at 764).
alternatively do not adequately allege that Bosch LLC is an
alter ego of Bosch GmbH, so as to avoid the need to plead
specific facts as to each Defendant. See Eclectic Props.
East LLC v. The Marcus & Millichap Co., No.
C-09-00511 RMW, 2012 WL 713289, at *4-5 (N.D. Cal. Mar. 5,
2012) (applying the alter ego test in the context of a civil
RICO claim), aff'd 751 F.3d 990 (9th Cir. 2014).
The allegations that “Robert Bosch LLC is a
wholly-owned subsidiary of Robert Bosch Gmb[H], ” that
both “operate under the umbrella of the Bosch Group,
” and that “Bosch's sectors and divisions are
grouped not by location, but by subject matter” (Compl.
¶ 36), are not sufficient to establish “(1) that
there is such a unity of interest and ownership that the
separate personalities of the two entities no longer exist
and (2) that failure to disregard their separate identities
would result in fraud or injustice.” Ranza v. Nike,
Inc., 793 F.3d 1059, 1073 (9th Cir. 2015) (quoting
Doe v. Unocal Corp., 248 F.3d 915 (9th Cir. 2001));
see also Id. (noting that the “unity of
interest and ownership” prong “envisions
pervasive control over the subsidiary, such as when a parent
corporation dictates every facet of the subsidiary's
business” (internal quotation marks omitted)).
light of the above, the Court does not consider the remainder
of Defendants' motion to dismiss at this time. Instead,
the Court GRANTS Plaintiffs leave to amend their Complaint,
by July 24, 2017, to address the identified shortcomings.
Defendants may then file a supplemental brief, by August 14,
2017, raising new arguments for dismissal of the Amended
Complaint, and addressing whether arguments previously raised
have been altered by the Amended Complaint. Plaintiffs may
then file a supplemental response brief by August 28, 2017.
Neither brief shall exceed 25 pages. The Court will then
consider the previously submitted briefs (Dkt. Nos. 2863,
2864, 2982, 2983, 3052), as well as the parties'
supplemental filings, in evaluating Plaintiffs' Amended
Complaint. The Court will hold a hearing on the motion to
dismiss on Tuesday, September 12, 2017 at 8:00 a.m. To the
extent that Plaintiffs seek to file portions of their Amended
Complaint under seal, they must file an Administrative Motion
to File Under Seal in conformance with Local Rule 79-5.