Bales v. FCA U.S. LLC

          AMENDED ORDER RE MOTION TO DISMISS AND MOTION TO STRIKE, AND ORDER TO REASSIGN CASE TO MAGISTRATE JUDGE (BY CONSENT)

          WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

INTRODUCTION ^[*]

         In this defective product action, defendant moves to dismiss under Rule 12(b)(6) and moves to strike under Rule 12(f). For the following reasons, the motion to dismiss is Denied and the motion to strike is Denied in part and Granted in part.

         STATEMENT

         In November 2013, plaintiff James Bales bought his 2013 RAM 1500 pickup truck from a dealer authorized by defendant Fiat Chrysler Automobiles U.S. LLC (FCA). In May 2014, he took it to an FCA authorized repair facility to fix a warning light on the dashboard. In July 2015 and January 2016, the pickup truck's airbag light lit up, so Bales took it back to the repair facility. In August 2017, the airbag light lit up again and the pickup truck appeared to be stuck in fourth gear in “limp mode.” After each visit, Bales reasonably believed that the facility had repaired the issue because the service manager or repair technician stated that his pickup truck was operating normally and safe to drive. In February 2018, the airbag light came on yet again along with the check engine light. After bringing it to the repair facility for the fifth time, Bales allegedly learned of a defect in his pickup truck's electrical architecture for the first time (Dkt. No. 1-1 at 3, 24-25).

         Bales now alleges that all FCA vehicles, including his pickup truck, are equipped with similarly structured electrical architecture. These electrical architectures include: the TIPM Electrical Architecture, the PowerNet Electrical Architecture, and the Fiat Compact Electrical Architecture. The electrical architectures use either the Totally Integrated Power Module (“TIPM”) or its successor, the Body Control Module (BCM), to control functions in the vehicle. Bales' truck uses the BCM and PowerNet architecture (id. at 4-5).

         Bales alleges that FCA knew of defective electrical architecture since at least 2007 demonstrated by: multiple TIPM-related recalls and technical service bulletins (TSB), FCA's exhaustive pre-release vehicle testing, FCA's exclusive access to post-sale data about the performance of and repairs made to its vehicles, numerous consumer complaints submitted to both FCA and National Highway Traffic Safety Administration (NHTSA), and two NHTSA investigations into TIPM-related complaints. Notwithstanding the history of module problems in its vehicles, FCA allegedly began installing the various electrical architectures using BCM in 2011 model year vehicles and continues to install these electrical architectures and modules into its vehicles (id. at 5-6, 26, 144-147).

         Over the past decade, 30 lines of FCA vehicles have allegedly been plagued with electrical problems arising from defective electrical architectures and modules. For example, defects in TIPM-6, BCM, and PowerNet caused vehicles to “roll away without warning” resulting in a recall of over a million vehicles (2011-2017 MY Ram 4500/5500, 2009-2017 MY Ram 1500, 2010-2017 MY Ram 2500, and 2010-2017 MY Ram 3500). The complaint details more issues with FCA vehicles: BCM and PowerNet defects caused “turn signal malfunction” (recalled 2013 MY Ram trucks); BCM defect caused warning light to fail “when tire pressure was low” (recalled 2015 MY Dodge Dart vehicles); BCM defect caused “no-start or engine stalling while driving”; BCM and PowerNet defects caused “headlights and taillights to suddenly shut off”; BCM defect disabled wiper system; TIPM defect caused the airbag warning lamp to “incorrectly illuminate”; TIPM defect caused “engine stall while driving” (recalled MY 2007 Jeep Wrangler and MY 2007 Dodge Nitro vehicles); and TIPM-7 defect caused vehicles' “inability to record data” (id. at 6-16, 31-32).

         Given the severity and number of these defects, Bales claims that FCA understood that the defective electrical architecture (whether it utilized a TIPM or BCM) posed a heightened risk of problems for consumers. Bales alleges that FCA never disclosed the PowerNet defects before he bought his pickup truck, nor at any point during his ownership of the car. Bales also alleges that FCA never instructed its retail sellers or authorized service and repair facilities to disclose the PowerNet defect to drivers or potential purchasers or lessees of vehicles equipped with any of FCA's defective electrical architectures (id. at 26).

         Bales now brings four claims for relief: breach of express warranty violation of Song-Beverly Act, breach of implied warranty violation of Song-Beverly Act, violation of the Song-Beverly Act Section 1793.2, and fraudulent inducement-concealment. FCA moves to dismiss the fourth claim regarding fraudulent inducement and moves to strike portions of the complaint. This case was filed in the Superior Court of California, County of San Francisco in July 2019 and was removed to the United States District Court of the Northern District of California in August 2019. Originally assigned to Magistrate Judge Kandis Westmore, this new action was reassigned to the undersigned on October 2, 2019. This order follows full briefing and oral argument.

         ANALYSIS

         1. Motion to Dismiss.

         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 (2009). A claim is facially plausible when there are sufficient factual allegations to draw a reasonable inference that defendants are liable for the misconduct alleged. While a court “must take all of the factual allegations in the complaint as true, ” it is “not bound to accept as true a legal conclusion couched as a factual allegation.” Id. at 677. “[C]onclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim.” Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996). Dismissal is only proper if there is either a “lack of cognizable legal theory” or “the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

         A. Bales Sufficiently States a Claim For Fraudulent ...