United States District Court, N.D. California
IN RE VOLKSWAGEN “CLEAN DIESEL” MARKETING, SALES PRACTICES, AND PRODUCTS LIABILITY LITIGATION This Relates To MDL Dkt. No. 5273 Iconic Motors, No. 317-cv-3185-CRB
ORDER DENYING BOSCH'S MOTION TO DISMISS
CHARLES R. BREYER UNITED STATES DISTRICT JUDGE.
Napleton I, the Court denied the Bosch
defendants' motion to dismiss an action against them by a
proposed class of Volkswagen-branded dealerships. See In
re Volkswagen “Clean Diesel” Mktg., Sales
Practices, & Prod. Liab. Litig. (Napleton
I), No. MDL 2672 CRB (JSC), 2017 WL 4890594 (N.D. Cal.
Oct. 30, 2017). For the reasons identified in Napleton
I, the Court now also denies the Bosch defendants'
motion to dismiss Iconic Motors, a case against them
by a Volkswagen-branded dealership that was not a party in
Napleton. The differences that the Bosch defendants
highlight between Napleton and Iconic
Motors have not persuaded the Court that, unlike
Napleton, Iconic Motors should be dismissed
at the pleading stage.
principal difference between the two cases is that the
dealership in Iconic Motors did not open for
business until six weeks after the EPA first
notified the public of its determination that Volkswagen had
manufactured and installed defeat devices in its 2.0-liter
TDI cars. (See MDL Dkt. No. 5117, Compl.
¶¶ 251, 259.) Because the Iconic Motors
plaintiffs knew about the EPA's notice, and still decided
to open a Volkswagen dealership, the Bosch defendants argue
that their losses were self-inflicted and were not caused by
the defeat-device scheme.
Bosch defendants' argument does not take into account
that for two years prior to the EPA's first notice of
violation, the Iconic Motors plaintiffs spent
millions of dollars to construct a dealership that was
customized to Volkswagen's branding requirements.
Plaintiffs made this investment without any knowledge of the
defeat-device scheme, and they allege that they would not
have made the investment had they known about the scheme.
(See Compl. ¶¶ 232-49.) Taking these
allegations as true, see In re Tracht Gut, LLC, 836
F.3d 1146, 1150 (9th Cir. 2016), they plausibly support an
injury to “business or property” recoverable
under RICO. 18 U.S.C. § 1964(c). See Canyon Cty. v.
Syngenta Seeds, Inc., 519 F.3d 969, 976 (9th Cir. 2008)
(explaining that overpayment due to fraud is an injury to
“property” that is cognizable under RICO);
Fleischhauer v. Feltner, 879 F.2d 1290, 1300 (6th
Cir. 1989) (allowing plaintiffs to recover under RICO amounts
invested in reliance on fraudulent conduct).
also seek to maintain a civil conspiracy claim against the
Bosch defendants, under Illinois law. (See Compl.
¶¶ 456-63.) For the reasons identified in
Napleton I, plaintiffs' allegations are
sufficient to plausibly support that the Bosch defendants
were involved in a civil conspiracy, i.e., in the
defeat-device scheme. See Napleton I, 2017 WL
4890594, at *11-17.
Court denies the Bosch defendants' motion to dismiss. As
in Napleton, however, the Bosch defendants may take
discovery and may move for summary judgment if discovery
reveals that plaintiffs' losses are insufficiently
supported by fact or lack a causal nexus to the defeat-device
scheme. See In re Volkswagen “Clean Diesel”
Mktg, Sales Practices, & Prod. Liab. Litig (Napleton
II), No. 3:16-CV-02086-CRB, 2019 WL 6749534 (N.D. Cal.
Dec. 6, 2019) (granting the Bosch defendants' motion for
IS SO ORDERED.
 Other categories of damages identified
in the complaint may also be actionable, but the Court will
not evaluate each category at the pleading stage.
 For the reasons identified in
Napleton I, the Court confirms that it has personal
jurisdiction over Bosch GmbH for plaintiffs' RICO claim.
See Napleton I, 2017 WL 4890594, at *17-18. Under
the doctrine of pendent personal jurisdiction, the Court also
exercises personal jurisdiction over Bosch GmbH for
plaintiffs' state law civil conspiracy claim, which is
based on the same operative facts as the RICO ...