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In re Nissan North America, Inc. Litigation

United States District Court, N.D. California

September 23, 2019

IN RE NISSAN NORTH AMERICA, INC. LITIGATION This Document Relates To: ALL ACTIONS

          ORDER ON MOTION TO DISMISS OR TRANSFER FOR IMPROPER VENUE AND MOTION TO APPOINT INTERIM COUNSEL RE: DKT. NOS. 12, 42

          HAYWOOD S. GILLIAM, JR., UNITED STATES DISTRICT JUDGE

         Pending before the Court is Defendant Nissan North America, Inc.’s (“NNA’s”) motion to dismiss or transfer for improper venue or, alternatively, motion to dismiss the consolidated class action complaint (“CCAC”) for failure to state a claim. Dkt. No. 42 (“Mot.”). Defendant Nissan Motor Co., Ltd. (“NML”), NNA’s parent company, joined NNA’s motion in its entirety. Dkt. No. 51. Plaintiffs also filed a motion to consolidate and appoint Plaintiffs’ counsel as interim counsel. For the reasons set forth below, the Court GRANTS Defendant NNA’s motion to transfer and TRANSFERS this action to the Middle District of Tennessee. The Court also TERMINATES AS MOOT Plaintiffs’ motion to consolidate and DENIES WITHOUT PREJUDICE Plaintiffs’ motion to appoint interim counsel.

         I. BACKGROUND

         Plaintiffs bring this putative class action individually and on behalf of nationwide and statewide classes consisting of all persons who purchased, own, owned, lease, or leased a “Class Vehicle, ” defined as a 2015 or newer Nissan or Infiniti vehicle equipped with Forward Emergency Braking (“FEB”) or Automatic Emergency Braking (“AEB”).[1] Dkt. No. 38 (“CCAC”) at 1. Plaintiffs in this case are ten individuals who purchased or leased a Class Vehicle from a dealer in their respective home states or online. CCAC ¶¶ 22–44. They are citizens of the following states: California (Robert Garneau); Florida (Courtney Johnson and Rhonda Perry); Massachusetts (David Turner); Missouri (Scott Reeves and Jane Reeves); New York (Lisa Hendrickson and Nancy Housell); Pennsylvania (Jeff Olkowski), and Texas (Vaughn Kerkorian). Id. ¶¶ 22–39. NNA is incorporated in California and has its principal place of business in Tennessee. Dkt. 19-2, Declaration of Lori McPherson (“McPherson Decl.”) ¶¶ 4–5;[2] see CCAC ¶ 48. NML is a Japanese corporation headquartered in Yokohama, Japan. CCAC ¶ 49.

         The crux of Plaintiffs’ CCAC is that Defendants allegedly concealed a defect in the Class Vehicles’ braking system. Id. ¶ 2. The braking technology operates by monitoring a vehicle’s proximity to the vehicle ahead and giving the driver audible and visual display warnings if the system detects a potential frontal collision. Id. ¶ 1. If the driver fails to respond, the brakes apply automatically to avoid the collision or, if collision is unavoidable, the braking system reduces the speed of the impact. Id. But a purported defect in the braking technology causes the braking system to deactivate or falsely engage, thereby triggering the brakes even when there is no car or obstacle ahead. Id. ¶¶ 2, 57. Plaintiffs allege that Defendants were aware of but failed to disclose material facts regarding the defect at the time of any purchase or repair of the Class Vehicles. Id. ¶¶ 59–61. According to Plaintiffs, NNA has been aware of the issues with the braking system “since at least 2015.” Id. ¶ 62. Based on these facts, Plaintiffs also allege breach of warranty and violations of several state consumer protection statutes Id. ¶¶ 116–283.

         II. MOTION TO APPOINT INTERIM COUNSEL

         Cathy Bashaw, a citizen of New York, initially filed this action against Defendants on November 30, 2018. Dkt. No. 1 (“Bashaw action”). Plaintiffs Kerkorian and Turner filed an action assigned to the Honorable Magistrate Judge Donna M. Ryu on December 31, 2018 (“Kerkorian action”), which the Court ordered related to the Bashaw action on January 11, 2019. Dkt. No. 14. The Court then consolidated the two actions. Dkt. Nos. 33, 35. Shortly thereafter, Plaintiffs filed their operative complaint, adding the new Named Plaintiffs but removing Ms. Bashaw. See generally CCAC. Before the Court consolidated the Bashaw and Kerkorian actions, Plaintiffs moved to consolidate and appoint Plaintiffs’ counsel as interim counsel under Federal Rule of Civil Procedure 23(g). Dkt. No. 12. NNA opposes appointment of interim class counsel, as it contends that there is no conflict or discord among counsel, and Plaintiffs do not show why it is necessary to appoint interim class counsel. Dkt. No. 18. The Court agrees with NNA.

         Under Federal Rule of Civil Procedure 23(g)(3), a court “may designate interim counsel to act on behalf of a putative class before determining whether to certify the action as a class action.” Fed.R.Civ.P. 23. A court should “designate interim counsel during the pre-certification period if necessary to protect the interests of the putative class.” Wang v. OCZ Tech. Grp., Inc., No. C 11-01415 PSG, at *4 (N.D. Cal. June 29, 2011) (citing Fed.R.Civ.P. 23).

         The Court finds that the consolidated action does not present the “special circumstances” that warrant appointment of interim counsel at this stage. See In re Nest Labs Litig., No. 14-cv-01363-BLF, 2014 U.S. Dist. LEXIS 115596, at *4 (N.D. Cal. Aug. 18, 2014). The Bashaw and Kerkorian actions have been consolidated, and there thus exists a single consolidated action for which Plaintiffs already filed a consolidated complaint. Under these circumstances, the Court sees no potential harm to the interests of the putative class that appointment of interim counsel will remedy. See Letizia v. Facebook Inc., No. 16-CV-06232-TEH, 2017 WL 1477158, at *2 (N.D. Cal. Apr. 25, 2017).

         Moreover, Plaintiffs seek appointment of four firms as interim counsel. There is no rivalry between the firms or signs that a rivalry exists: instead, the firms have already demonstrated their ability to cooperate and work together by filing the CCAC. See generally CCAC; see also Letizia, 2017 WL 1477158, at *3 (“Here, like the plaintiffs in In re Nest, the separate plaintiffs’ counsel are presently collaborating and the parties have not shown any signs that a rivalry exists.”). “Where there are no competing lawsuits or firms, courts in this district have been unwilling to appoint interim class counsel.” See In re Seagate Tech. LLC Litig., No. 16-cv-00523-RMW, 2016 WL 3401989 (N.D. Cal. June 21, 2016) (collecting cases).

         The Court sees no purpose to be served in appointing the four firms as interim counsel under these circumstances. It is not “necessary to appoint interim class counsel merely to maintain the status quo.” Letizia, 2017 WL 1477158, at *3. Accordingly, the Court TERMINATES AS MOOT Plaintiffs’ motion to consolidate and DENIES WITHOUT PREJUDICE Plaintiffs’ motion to appoint interim counsel.

         III. MOTION TO DISMISS UNDER RULE 12(B)(3) FOR IMPROPER VENUE

         NNA moves to dismiss nine of the ten Plaintiffs for improper venue under 28 U.S.C. § 1391(b). Alternatively, NNA moves to transfer the entire action to the Middle District of Tennessee under 28 U.S.C. § 1404(a). The Court agrees that venue is not appropriate for nine of the ten Plaintiffs, and could dismiss the nine Plaintiffs on those grounds. However, for the convenience of the parties and witnesses, and in the interest of justice, the Court in its discretion will instead transfer the entire action to the Middle District of Tennessee.

         The Court first addresses why venue is improper for the nine nonresident Plaintiffs.

         A. Legal Standard

         Under Federal Rule of 12(b)(3), a party may move to dismiss an action for improper venue. Fed.R.Civ.P. 12(b)(3). Venue in a civil action is proper in:

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action.

28 U.S.C. § 1391(b). The first two sections of § 1391(b) “define the preferred judicial districts for venue in a typical case, ” whereas subsection (3) is a “fallback option.” Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49, 57 (2013). This ensures that “so long as a federal court has personal jurisdiction over the defendant, venue will always lie somewhere.” Id.

         Once a defendant challenges venue, the plaintiff has the burden of demonstrating that venue is proper in the chosen district. Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). A plaintiff asserting multiple claims must establish that venue is proper as to each claim. United Tactical Sys. LLC v. Real Action Paintball, Inc., 108 F.Supp. 3d 733, 751 (N.D. Cal. 2015) (citation omitted). In determining whether venue is proper, courts may consider evidence outside the pleadings. See Murphy v. Schneider Nat’l Inc., 362 F.3d 1133, 1137 (9th Cir. 2004).

         B. Discussion

         i. Venue Under § 1391(b)(1)

         Under § 1391(b)(1), venue is proper in any district where a defendant resides. 28 U.S.C. § 1391(b)(1). In a state with multiple judicial districts, for purposes of venue, a defendant corporation is “deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that were a separate State.” Id. § 1391(d). NNA argues that venue is improper under § 1391(b)(1) because Plaintiffs cannot establish that NNA is subject to personal jurisdiction in the Northern District of California. Mot. at 8–12.

         There are two categories of personal jurisdiction a plaintiff can invoke: general and specific. Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015). “If the defendant’s activities in the forum are substantial, continuous and systematic, general jurisdiction is available; in other words, the foreign defendant is subject to suit even on matters unrelated to his or her contacts to the forum.” Doe v. Unocal Corp., 248 F.3d 915, 923 (9th Cir. 2001). The Supreme Court has held that the “paradigm forums” for the exercise of general jurisdiction are an individual’s domicile and a corporation’s place of incorporation and principal place of business. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011); see Daimler AG v. Bauman, 571 U.S. 117, 134 (2014). This is in contrast to specific jurisdiction, which “exists when a case arises out of or relates to the defendant’s contacts with the forum.” Ranza, 793 F.3d at 1068 (quotations and citations omitted). It “depends on an affiliation between the forum and the underlying controversy, principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.” Id.

         While questions of venue and personal jurisdiction are related, the Ninth Circuit has made clear that the two inquiries are distinct, as “[j]urisdiction is the power to adjudicate, while venue, which relates to the place where judicial authority may be exercised, is intended for the convenience of the litigants.” Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1179 (9th Cir. 2004) (citations and quotations omitted and alterations in original). “The Supreme Court has emphasized the distinction between these concepts, writing that ‘[t]his basic difference between the court’s power ...


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