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Victorino v. FCA U.S. LLC

United States District Court, S.D. California

October 17, 2019

CARLOS VICTORINO and ADAM TAVITIAN, individually, and on behalf of other members of the general public similarly situated, Plaintiffs,
v.
FCA U.S. LLC, a Delaware limited liability company, Defendant.

          ORDER GRANTING PLAINTIFF'S RENEWED MOTION FOR CLASS CERTIFICATION [DKT. NO. 311.]

          GONZALO P. CURIEL, UNITED STATES DISTRICT JUDGE

         Before the Court is Plaintiff Carlos Victorino's renewed motion for class certification after the stay in the case was lifted when the Ninth Circuit issued its decision in Nguyen v. Nissan North Am., Inc., 932 F.3d 811 (9th Cir. 2019). (Dkt. Nos. 303, 311.) Defendant filed an opposition on September 30, 2019. (Dkt. No. 315.) Plaintiff filed a reply on October 7, 2019. (Dkt. No. 316.)

         After a careful review of the briefs, supporting documentation, and the applicable law, the Court GRANTS Plaintiff's renewed motion for class certification.

         Background

         Plaintiff Carlos Victorino[1] (“Victorino” or “Plaintiff”) filed a putative first amended class action complaint (“FAC”) based on defects in the 2013-2016 Dodge Dart vehicles equipped with a Fiat C635 manual transmission that cause his vehicle's clutch to fail and stick to the floor. Defendant FCA U.S. LLC (“FCA” or “Defendant”) is the manufacturer of his vehicle. (Dkt. No. 104, FAC ¶¶ 1, 2, 52.) The FAC alleges five causes of action for violations of California's Consumer Legal Remedies Act (“CLRA”), California's unfair competition law (“UCL”), a state law breach of implied warranty pursuant to the Song-Beverly Consumer Warranty Act (“Song-Beverly Act”), a federal law breach of implied warranty pursuant to the Magnuson-Moss Warranty Act (“MMWA”), and unjust enrichment. (Dkt. No. 104, FAC.) After the Court's ruling on Defendant's motion for summary judgment and subsequent motion for reconsideration, (Dkt. Nos. 206, 240), the remaining causes of action in the case are the breach of implied warranty of merchantability under the Song-Beverly Act and the MMWA, and a UCL claim premised on the breach of implied warranty claims.

         On June 13, 2018, the Court denied class certification. (Dkt. No. 265.) On June 28, 2018, Plaintiff filed a petition for permission to appeal the Court's ruling pursuant to Federal Rule of Civil Procedure (“Rule”) 23(f) with the Ninth Circuit.[2] (Dkt. No. 274.) On July 24, 2018, Plaintiff filed a Notice that on July 20, 2018, the Ninth Circuit granted a petition for permission to appeal denial of class certification under Rule 23(f) in Nguyen v. Nissan, No. 18-16344 (9th Cir.). (Dkt. No. 289.) Because this Court relied on the reasoning in Nguyen to deny class certification on the issue of whether Plaintiff's damages model satisfied predominance, on September 11, 2018, the court vacated the pretrial conference and stayed the case pending ruling on the order denying class certification in Nguyen v. Nissan North Am., Case No. 16cv5591-LHK, 2018 WL 1831857 (N.D. Cal. Apr. 9, 2019). (Dkt. No. 297.) Subsequently, on October 24, 2018, the Ninth Circuit held Plaintiff's petition seeking permission to appeal in abeyance pending its decision in Nguyen. (Dkt. No. 298.) On July 26, 2019, the Ninth Circuit reversed the district court's denial of class certification in Nguyen and remanded the case for further proceedings. See Nguyen v. Nissan North Am., Inc., 932 F.3d 811 (9th Cir. 2019). Accordingly, on July 31, 2019, the Court lifted the stay, held a status conference and set a briefing schedule on Plaintiff's renewed motion for class certification. (Dkt. No. 303.) The motion is now fully briefed. (Dkt. Nos. 311, 315, 316.)

         Plaintiff claims a design defect in the 2013-2015 Dodge Dart vehicles equipped with a Fiat C635 manual transmission built on or before November 12, 2014 (“Class Vehicles”). (Dkt. No. 311-1, Pl's Mot. at 5[3].) In the renewed motion for class certification, Plaintiff has abandoned his prior class definition which included a nationwide implied warranty class and included used vehicles.[4] Now, Plaintiff seeks to certify a class to include, “All persons who purchased or leased in California, from an authorized dealership, a new Class Vehicle.” (Dkt. No. 311-1, Pl's Mot. at 9.)

         Plaintiff alleges an inherent defect in the hydraulic clutch system (“Clutch System”) that existed in all Class Vehicles at the time of sale that causes the clutch pedal to lose pressure, stick to the floor, and prevents his gears from engaging and/or disengaging. The FAC explains that the clutch defect is caused by the degradation of the clutch reservoir hose, which releases plasticizer and fibers, causing contamination of the hydraulic fluid that bathes the components of the Clutch System. (Dkt. No. 104, FAC ¶ 7.) As a result, the contamination causes the internal and external seals of the clutch master cylinder (“CMC”) and clutch slave cylinder (“CSC”) to swell and fail. (Id. ¶¶ 7, 8.) When fluid in the hydraulic system becomes contaminated, all of the components that have been exposed to the contaminated fluid must be replaced and any steel tubing must also be thoroughly cleaned with brake cleaner and blown out until dry to ensure that none of the contaminants remain. (Id. ¶ 8.) The clutch defect causes stalling, the failure to accelerate, and premature failure of the Clutch System's components, “including the clutch master cylinder and reservoir hose, clutch slave cylinder and release bearing, clutch disc, pressure plate, and flywheel.” (Dkt. No. 104, FAC ¶ 2.)

         On January 8, 2016, FCA implemented a voluntary customer service action, Service Bulletin 06-001-16 entitled “Clutch Pedal Operation X62 Extended Warranty” (“X62 Extended Warranty”) to address the issue of the contaminated hydraulic fluid caused by the degradation of the clutch reservoir hose and involved the “replacement of the hydraulic clutch master cylinder and reservoir hose” for the 2013-2015 Dodge Dart vehicles. (Dkt. No. 311-3, Zohdy Decl., Ex. H at 62.)

         In this litigation, Plaintiff claims that the X62 Extended Warranty program which only replaced the reservoir hose and clutch master cylinder failed to fully address and repair the defect and ignores the systemic effect of the contaminated hydraulic fluid. They contend that if the hydraulic fluid is contaminated, all clutch system components are susceptible to damage and the well-known industry standard requires that all component parts within the system must be replaced. (Dkt. No. 311-3, Zohdy Decl., Ex. B, Stapleton Decl. ¶ 9.) According to Plaintiff, any repair requires replacement of all component parts, including the CSC, thorough cleaning of any steel tubing with brake cleaner and drying before reassembly. (Dkt. No. 311-3, Zohdy Decl., Ex. N, Stapleford Expert Report ¶ 16.)

         Defendant denies that the alleged defect exists in all Class Vehicles and Plaintiff's vehicle, even with 107, 135 miles as of August 2019, has yet to exhibit any signs of the defect caused by a defective reservoir hose. According to an investigation by FCA and its supplier of reservoir hoses, it was determined that the condition caused by the defect could affect only 16% of the Class Vehicles because each Class Vehicle has component parts that are manufactured differently. (Dkt. No. 315-3, Benson Decl. ¶¶ 18, 19.) Defendant explains that the existence of the defect depends on the amount of plasticizer in the reservoir hose, the size and position of the clutch systems seals and the level of the varying tolerances. (Id.)

         Discussion

         A. Legal Standard on Class Certification

         “The class action is an exception to the usual rule that litigation is conducted by and on behalf of individual named parties only. In order to justify a departure from that rule, a class representative must be a part of the class and possess the same interest and suffer the same injury as the class members.” Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2550 (2011) (internal quotation marks and citations omitted). A plaintiff seeking class certification must affirmatively show the class meets the requirements of Rule 23. Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432 (2013) (citing Dukes, 131 S.Ct. at 2551-52). To obtain certification, a plaintiff bears the burden of proving that the class meets all four requirements of Rule 23(a)--numerosity, commonality, typicality, and adequacy. Ellis v. Costco Wholesale Corp., 657 F.3d 970 979-80 (9th Cir. 2011). If these prerequisites are met, the court must then decide whether the class action is maintainable under Rule 23(b). United Steel, Paper & Forestry, Rubber, Mfg. Energy, Allied Indus. & Serv. Workers Int'l Union AFL-CIO, CLC v. ConocoPhillips Co., 593 F.3d 802, 806 (9th Cir. 2010). Rule 23(b)(3) authorizes certification when “questions of law or fact common to class members predominate over any questions affecting only individual class members, ” and “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). The Court exercises discretion in granting or denying a motion for class certification. Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir. 2003).

         The Court is required to perform a “rigorous analysis, ” which may require it “to probe behind the pleadings before coming to rest on the certification question.” Dukes, 131 S.Ct. at 2551. “‘[T]he merits of the class members' substantive claims are often highly relevant when determining whether to certify a class. More importantly, it is not correct to say a district court may consider the merits to the extent that they overlap with class certification issues; rather, a district court must consider the merits if they overlap with Rule 23(a) requirements.” Ellis, 657 F.3d at 981. Nonetheless, the district court does not conduct a mini-trial to determine if the class “could actually prevail on the merits of their claims.” Id. at 983 n.8; United Steel, Paper & Forestry, Rubber, Mfg. Energy, Allied Indus. & Serv. Workers Int'l Union, AFL-CIO, CLC, 593 F.3d at 808 (citation omitted) (court may inquire into substance of case to apply the Rule 23 factors, however, “[t]he court may not go so far . . . as to judge the validity of these claims.”).

         Here, Plaintiff moves for class certification solely on the Song-Beverly claim and not the MMWA[5] or the UCL claims.[6] Accordingly the Court limits its ruling solely on the issue of whether a Song-Beverly class should be certified.

         B. Predominance under Rule 23(b)(3)

         Defendant's focal argument is that Plaintiff has not proven, with evidence, that common questions of law or fact predominate on the question of whether there is a defect in ALL class vehicles at the time of purchase on the claim for breach of implied warranty of merchantability. The fact that Plaintiff's vehicle has not yet exhibited the defect demonstrates that not all class vehicles have a defective reservoir hose. Consequently, Plaintiff's failure to prove there is a defect in all Class Vehicles renders his motion for class certification deficient on predominance as well as whether the defect caused the claimed damages, whether the proposed damage methodology fits his theory of liability and whether typicality and adequacy have been satisfied. In response, Plaintiff argues that common evidence shows that every Class Vehicle had a defective reservoir hose at the time of sale.

         Under Rule 23(b)(3), the plaintiff must demonstrate that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” Fed.R.Civ.P. 23(b)(3). Predominance is satisfied “[w]hen common questions present a significant aspect of the case and they can be resolved for all members of the class in a single adjudication.” True Health Chiropractic, Inc. v. McKesson Corp., 896 F.3d 923, 931 (9th Cir. 2018) (quoting Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 589 (9th Cir. 2012)). In addition, class damages must be sufficiently traceable to plaintiff's liability case. See Comcast Corp., 133 S.Ct. at 1433.

         As a threshold matter, the Court addresses both parties' argument that the Court made certain findings in prior orders that support their positions on whether predominance has been satisfied. Plaintiff argues that the Court concluded that ALL Class Vehicles contain the clutch defect while Defendant argues that the Court found that Plaintiff cannot prove that ALL the Class Vehicles have the defective clutch reservoir hose. The Court disagrees with both parties' construction of its prior orders.

         On summary judgment, the Court, on June 14, 2017, stated that FCA recognized in its reply brief[7] that Plaintiff's vehicle may have a reservoir hose that could leach plasticizer. (Dkt. No. 91 at 12.) Contrary to Plaintiff's argument, the Court did not conclude that FCA admitted that all Class Vehicles were equipped with a defective reservoir hose, but only that the Class Vehicles may be equipped with one. On May 10, 2018, on FCA's motion for reconsideration, the Court granted summary judgment on the CLRA, related UCL and unjust enrichment claims, which require a showing of the existence of a defect, because Plaintiff had not presented evidence that his vehicle suffered from a defective reservoir hose that leaked plasticizer. (Dkt. No. 241 at 6-8.) Based on this, Defendant argues the Court concluded that not all Class Vehicles were defective at the time of sale. However, the Court only concluded that Plaintiff had not yet come forward with evidence that the clutch defect in his vehicle was caused by a defective reservoir hose that was leaking plasticizer for purposes of the CLRA and related claims and not on the breach of implied warranty claim. The fact that Plaintiff's vehicle has not yet manifested a defect is not a required showing on class certification and is a merits-based question. (See Dkt. No. 265 at 25-26.)

         The Court declines to consider or rely on the parties' misconstruction of the Court's prior orders in ruling on the instant class certification motion and instead considers whether, on the existing record, Plaintiff has demonstrated that common issues of fact and law will predominate on the claim for breach of the implied warranty of merchantability.

         The Song-Beverly Consumer Warranty Act (“Song-Beverly Act”) provides that “every sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer's and the retail seller's implied warranty that the goods are merchantable.” Cal. Civ. Code § 1792. Unless specific disclaimer methods are followed, an implied warranty of merchantability accompanies every retail sale of consumer goods in the state. Id. An implied warranty of merchantability under the Song-Beverly Act requires that consumer goods “[a]re fit for the ordinary purposes for which such goods are used.” Cal. Civ. Code § 1791.1(a); Isip v. Mercedes-Benz USA, LLC, 155 Cal.App.4th 19, 26 (2007) (“The core test of merchantability is fitness for the ordinary purpose for which such goods are used.”).

         Here, the FAC alleges that the “implied warranty included, among other things: (i) a warranty that the Class Vehicles and their Clutch Systems were manufactured, supplied, distributed, and/or sold by FCA were safe and reliable for providing transportation; and (ii) a warranty that the Class Vehicles and their Clutch Systems would be fit for their ...


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