Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION ................................................................................ 1
4 II. RELEVANT BACKGROUND ............................................................ 3
5 A. Summary Of Plaintiffs Allegations ..................................................... 3
6 B. HVAC Odor May Be Caused By Multiple Factors Unrelated To
Any Alleged Design Defect .................................................................. 4
7
C. The Owners Manuals Disclose The Possibility Of HVAC Odor ........ 5
8
III. LEGAL STANDARDS ........................................................................ 5
9
IV. ARGUMENT ........................................................................................ 6
10
A. All Claims Fail Because Plaintiffs Do Not Plausibly Allege Any
11 Design Defect That Caused Odors Or Mold in Their Vehicles ............ 6
12 1. Plaintiffs fail to plead facts that their vehicles experienced
any mold-related safety hazard and they cannot rely upon
13 conclusory information and belief allegations to do so .......... 7
14 2. Plaintiffs fail to plead facts connecting the alleged design
defect to the odors they have purportedly experienced .............. 8
15
B. Plaintiffs Fraud-Based Claims Fail For Multiple Reasons................ 10
16
1. Plaintiffs have not alleged a misrepresentation by Toyota....... 10
17
2. Plaintiffs have not identified a material omission by
18 Toyota ....................................................................................... 11
19 3. Plaintiffs have not alleged a duty to disclose by Toyota .......... 12
20 a. Florida law does not have an exclusive
knowledge exception .................................................... 13
21
b. Virginia law recognizes a limited exclusive
22 knowledge exception .................................................... 14
23 c. Plaintiffs fail to satisfy the elements of the
exclusive knowledge exception under California,
24 Kansas, and Washington Law ........................................ 14
25 d. Plaintiff Dey cannot satisfy any unique exceptions
triggering a duty to disclose under California law ......... 17
26
C. Plaintiffs Fail To State Breach Of Warranty Claims .......................... 18
27
1. Plaintiffs breach of express warranty claims fail for
28 multiple reasons ........................................................................ 18
MORGAN, LEWIS &
BOCKIUS LLP
ATTORNEYS AT LAW
MEMORANDUM IN SUPPORT OF
LOS ANGELES
i TOYOTAS MOTION TO DISMISS
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1 TABLE OF CONTENTS
(continued)
2 Page
3
2. Plaintiffs breach of implied warranty of merchantability
4 claims fail for multiple reasons ................................................ 19
5 3. Plaintiffs MMWA and California statutory warranty
claims fail as a matter of law .................................................... 20
6
D. Plaintiffs Also Fail To State A Claim Under The Unlawful
7 And Unfair Prongs of State Consumer Protection Laws ................ 20
8 E. Plaintiffs Equitable Claims Fail Because They Have Not
Established That There is No Adequate Remedy at Law
9 Available ............................................................................................. 21
10 F. Plaintiffs Do Not Have Standing To Pursue Claims Regarding
Vehicles They Did Not Purchase ........................................................ 23
11
V. CONCLUSION ................................................................................... 25
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
MORGAN, LEWIS &
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES ii TOYOTAS MOTION TO DISMISS
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1
TABLE OF AUTHORITIES
2
Page(s)
3
4 CASES
3 White v. Potocska,
589 F. Supp. 2d 631 (E.D. Va. 2008) .................................................................. 13
4
5 Wilson v. Frito-Lay N. Am., Inc.,
961 F. Supp. 2d 1134 (N.D. Cal. 2013)............................................................... 25
6
Wilson v. Hewlett-Packard Co.,
7
668 F.3d 1136 (9th Cir. 2012) ................................................................. 13, 15, 17
8
Wolph v. Acer Am. Corp.,
9 No. C 09-01314 JSW, 2009 WL 2969467 (N.D. Cal. Sept. 14,
10 2009) .................................................................................................................... 16
11 Yagman v. General Motors Co.,
No. CV-14-4696-MWF, 2014 WL 4177295 (C. D. Cal. Aug. 22,
12
2014) .................................................................................................................. 8, 9
13
Zapata Fonseca v. Goya Foods, Inc.,
14 No. 16-CV-02559-LHK, 2016 WL 4698942 (N.D. Cal. Sept. 8,
15 2016) .................................................................................................................... 22
16 STATUTES AND OTHER AUTHORITIES
17 15 U.S.C. 45(n) ...................................................................................................... 21
18
15 U.S.C. 2310(a) .................................................................................................. 20
19
15 U.S.C. 2310(a)(1) ............................................................................................. 20
20
21 15 U.S.C. 2310(a)(3)(C)(ii) ................................................................................... 20
1 Florida Deceptive & Unfair Trade Practices Act ................................... 10, 11, 13, 21
2
Kan. Stat. Ann. 50-626(a)(b) ......................................................................... 11, 21
3
Kansas Consumer Protection Act ........................................................... 10, 11, 13, 21
4
Magnuson-Moss Warranty Act ...................................................................... 2, 20, 21
5
6 Song-Beverly Warranty Act ................................................................................. 2, 20
1 INTRODUCTION
2 Plaintiffs concede in their Complaint that odors from a heating, ventilation
3 and air conditioning system (HVAC) can be produced by many different causes
4 unrelated to any design defect in the HVAC system. Odors introduced into the
5 vehicles cabin, for example, from outside sources such as exhaust fumes, dirty
6 gym clothes, and take-out food can accumulate in the HVAC system and be
7 released through the air vents. A blocked drainage hose or debris stuck in the
8 HVAC system can cause odors. Outside temperature, along with the frequency and
9 settings of HVAC system usage, can affect the occurrence of odors.
10 Notwithstanding the multiple potential sources of HVAC odors, Plaintiffs
11 assert that the HVAC systems in their vehiclesalong with more than 30 different
12 Toyota and Lexus models that Plaintiffs never purchasedcontain a design defect
13 that causes the retention of water, leading to odors, and, upon information and
14 belief, mold growth. On this basis, Plaintiffs seek to allege fraud-based and breach
15 of warranty claims against Toyota.
16 The viability of Plaintiffs Complaint depends, of course, on the existence of
17 the alleged odor-causing and mold-causing defect in their vehicles; however,
18 Plaintiffs conclusory allegations fall far short of pleading such a defect. Plaintiffs
19 Complaint pleads no facts that the HVAC system in any Plaintiffs vehicle actually
20 retains water, much less has developed any mold growth. Nor can an alleged defect
21 be presumed simply from the existence of odor from Plaintiffs HVAC systems,
22 given that Plaintiffs own pleading acknowledges that HVAC odor has multiple
23 potential causes unrelated to any design defect. This fundamental pleading failure
24 requires dismissal of Plaintiffs Complaint.
25 In addition to the overarching pleading defect, Plaintiffs Complaint is
26 deficient in other ways:
27 First, while Plaintiffs fraud-based claims arise under different state laws,
28 which vary widely, they each fail because Plaintiffs do not identify a material
MORGAN, LEWIS &
BOCKIUS LLP
ATTORNEYS AT LAW
MEMORANDUM IN SUPPORT OF
LOS ANGELES
1 TOYOTAS MOTION TO DISMISS
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Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 12 of 36 Page ID #:251
1 Plaintiff Casper alleges that unidentified occupants experienced such odors, but
2 does not specifically allege that he has experienced any such odors. Id. at 24.
3 No Plaintiff identifies a specific relevant advertisement or other affirmative
4 representation that he or she reviewed prior to making his or her purchase. Aside
5 from conclusory information and belief allegations, no Plaintiff alleges that his or
6 her HVAC system actually retains water or contains mold growth as a result of the
7 purported design defect. No Plaintiff alleges that he or she complained to Toyota
8 about the alleged defect, brought the vehicle in for repair, stopped driving the
9 vehicle, stopped using the HVAC system, or that the HVAC system failed to cool
10 and heat the vehicle.
11 Notwithstanding Plaintiffs failure to allege basic facts to support their
12 claims, they seek to represent millions of Toyota and Lexus owners and lessees
13 who own 38 different models spanning 11 model years. Yet Plaintiffs plead no
14 facts to show that the millions of proposed class vehicles share a common HVAC
15 system design, let alone a common design defect causing HVAC odors.
16 B. HVAC Odor May Be Caused By Multiple Factors Unrelated To
17 Any Alleged Design Defect.
18 The plausibility of Plaintiffs core legal conclusionthat a common design
19 defect caused the HVAC odor that some of them allegedly experiencedmust be
20 considered in light of the fact that HVAC odor may be caused by multiple,
21 independent factors that have nothing to do with any alleged design defect. Indeed,
22 the very documents attached to Plaintiffs Complaint provide several alternative
23 sources of HVAC odor unrelated to a design defect, including a [b]lockage of the
24 evaporator housing drain pipe; exterior and interior odors, such as air fresheners,
25 animals, dirt, or trash accumulating in the HVAC system; external odors
26 accumulating on the evaporator and released when the evaporator core changes
27 temperature; and debris entering the HVAC system. See Compl. at Exhs. A, B, C,
28 and D. The unverified complaints of third parties referenced in the Complaint
MORGAN, LEWIS &
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 4 TOYOTAS MOTION TO DISMISS
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1 further suggest other possible sources of HVAC odor, including wet carpets (id. at
2 p. 23), a stuck A/C drain flap (id.), and usage and environmental factors (id. at p. 27
3 [the odor occurs in the summer, in hot months with the AC is used on a daily
4 basis. It does not occur in the winter]). According to Plaintiffs own pleading,
5 therefore, HVAC odor, which is not unique to Toyota or Lexus vehicles,1 has
6 multiple causes unrelated to any alleged design defect.
7 C. The Owners Manuals Disclose The Possibility Of HVAC Odor.
8 Not only do multiple causes of HVAC odor exist, but Toyota affirmatively
9 discloses the possibility of HVAC odor to its customers. Each of Plaintiffs
10 vehicles came with an owners manual at the time of purchase. See Declaration of
11 Barry M. Hare (Hare Decl.) at 3; see also Request for Judicial Notice (RJN).
12 The owners manuals are also available online. Id. With the exception of the
13 manual for Plaintiff Kennedys 2007 Lexus ES 350 vehicle (for which the warranty
14 period has long since expired), the owners manuals expressly disclose:
15 Air conditioning odors
16 During use, various odors from inside and outside the vehicle may enter
into and accumulate in the air conditioning system. This may then
17 cause odor to be emitted from the vents.
18 To reduce potential odors from occurring:
It is recommended that the air conditioning system be set to outside air
19 mode prior to turning the vehicle off.
20 Id., e.g., at Exh. 1 [2011 Toyota Sienna owners manual excerpt].
21 II. LEGAL STANDARDS
22 To survive a motion to dismiss under Rule 12(b)(6), Plaintiffs must provide
23 more than labels and conclusions. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
24 (2007). It is well-settled that [d]etermining whether a complaint states a plausible
25 claim for relief will . . . be a context-specific task that requires the reviewing court
26 to draw on its judicial experience and common sense. Ashcroft v. Iqbal, 556 U.S.
27
1
28 Another unverified complaint referenced in Plaintiffs Complaint states that the
MORGAN, LEWIS &
problem is occurring with other luxury cars (Jaguar, BMW). Compl. at p. 20.
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 5 TOYOTAS MOTION TO DISMISS
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1 662, 679 (2009). In doing so, this Court must disregard legal conclusions and
2 conclusory statements, and must scrutinize the well-pleaded factual allegations to
3 ensure that they are more than merely consistent with a defendants liability.
4 Id. at 67779. Additionally, because Plaintiffs Complaint sounds in fraud, it is
5 subject to the heightened pleading standard set forth in Rule 9(b). Kearns v. Ford
6 Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009). Rule 9(b) applies to both
7 misrepresentation and omission claims, and requires the complaint to set forth the
8 who, what, when, where, and how of the misconduct charged. Vess v. Ciba-
9 Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003).
10 In deciding the instant motion, the Court may consider documents subject to
11 judicial notice or incorporated by reference into the Complaint. A document is
12 incorporated by reference when the contents are alleged in a complaint or when
13 the plaintiffs claim depends on the contents of a document.2 Knievel v. ESPN,
14 393 F.3d 1068, 1076 (9th Cir. 2005). The Court need not accept as true
15 allegations that contradict matters properly subject to judicial notice or by exhibit.
16 Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).
17 III. ARGUMENT
18 A. All Claims Fail Because Plaintiffs Do Not Plausibly Allege Any
19 Design Defect That Caused Odors Or Mold in Their Vehicles.
20 Plaintiffs Complaint purports to assert claims arising from purported
21 misrepresentations, omissions, and breaches of warranty by Toyota about an
22 alleged defect in their HVAC systems. Thus, the alleged defect must be properly
23 pled in order for Plaintiffs Complaint to move forward with respect to all of these
24 2
Here, Plaintiffs owners manuals and warranty guides, and the Center for Disease
25 Control (CDC) webpage, are expressly referenced and central to Plaintiffs
26 omission-based claims and breach of warranty claims. See Compl., e.g., at 31
(referencing owners manuals), fn. 11 14 (referencing warranty and maintenance
27 guides), 49 (alleging that Toyota failed to disclose the defect to consumers at the
28 time of purchase or lease of the Class Vehicles (or anytime thereafter) . . .); fn. 8
MORGAN, LEWIS &
(referencing CDC webpage); see also RJN.
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 6 TOYOTAS MOTION TO DISMISS
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1 purported claims. Plaintiffs assert that, on information and belief, the alleged
2 design defect causes the retention of moisture, leading to mold growth in and odors
3 from their HVAC systems. See Compl. at 36. Plaintiffs defect-related
4 allegations, however, fall short of meeting the plausibility threshold because (1)
5 Plaintiffs do not plead any specific facts to show the retention of water or the
6 corresponding presence of mold growth in their vehicles; and (2) Plaintiffs fail to
7 allege facts to connect the alleged defect to the odors they have purportedly
8 experienced, which cannot be assumed given the multiple causes of HVAC odor.
9 1. Plaintiffs fail to plead facts that their vehicles experienced
10 any mold-related safety hazard and they cannot rely upon
11 conclusory information and belief allegations to do so.
12 Plaintiffs information and belief allegations about the retention of water in
13 their own HVAC systems and a corresponding mold-related safety hazard are
14 entirely conclusory. Id. at 3, 36, 37. Plaintiffs allege no facts to support them.
15 Plaintiffs do not allege that they inspected their HVAC systems, tested their
16 vehicles for water retention or mold growth, or experienced abnormal levels of
17 mold in their vehicles. Plaintiffs defect theory relies upon the very conclusory
18 statements that Iqbal forbids. See, e.g., Iqbal, 556 U.S. at 681 (allegations that
19 defendant was the principal architect of discriminatory policy and that plaintiff
20 was subject to policy solely on account of protected characteristics were
21 conclusory and not entitled to be assumed true).
22 Plaintiffs allegations about a mold-causing defect in their own vehicles are
23 based entirely on information and belief, which is insufficient under
24 Iqbal/Twombly and Rule 9(b). Id. at 3, 16, 18, 20, 22, 24, 36, 37; see, e.g.,
25 Blantz v. Cal. Dept of Corr. & Rehab., 727 F.3d 917, 927 (9th Cir. Cal. 2013)
26 (conclusory allegations on information and belief are insufficient to state a claim
27 in the absence of specific factual allegations regarding [the defendants]
28 involvement in the actions giving rise to this lawsuit); see also Vivendi SA v. T-
MORGAN, LEWIS &
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 7 TOYOTAS MOTION TO DISMISS
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Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 18 of 36 Page ID #:257
1 Mobile USA Inc., 586 F.3d 689, 694 (9th Cir. 2009) (holding information and
2 belief allegations regarding the defendants involvement in the allegedly
3 fraudulent scheme were insufficient under Iqbal/Twombly). For example, Plaintiffs
4 include a picture of an evaporator in their Complaint, asserting on information and
5 belief that it is a Lexus evaporator with evidence of mold growth. Id. at 39.
6 But this picture does not purport to be of any of Plaintiffs vehicles. The picture of
7 a different vehicle supposedly depicting mold growth underscores Plaintiffs
8 failure to conduct a basic inquiry about their own vehicles prior to filing their
9 Complaint, including taking steps to determine if they have any retained water or
10 mold growth in their own HVAC systems, which Plaintiffs claim cause odor.
11 Although allegations on information and belief may be considered when
12 the facts are peculiarly within the possession and control of the defendants, . . . or
13 where the belief is based on factual information that makes the inference of
14 culpability plausible, these exceptions do not apply here. Arista Records, LLC v.
15 Doe 3, 604 F.3d 110, 120-21 (2d Cir. 2010). The information and belief facts are
16 ones that are either known to Plaintiffs or are ascertainable by them. Plaintiffs are
17 in possession of their vehicles and only they can determine whether their HVAC
18 systems retain water or contain mold growth. See Yagman v. General Motors Co.,
19 No. CV-14-4696-MWF, 2014 WL 4177295, at *3 (C. D. Cal. Aug. 22, 2014)
20 (dismissing complaint for failing to plausibly allege a defect under Iqbal/Twombly,
21 in part because the [p]laintiff is in the best position to ascertain the condition of the
22 car engine, which evidently is still in his possession). Since Plaintiffs design
23 defect claims are dependent on the presence of odor produced by accumulated
24 water and mold and Plaintiffs have not pled facts establishing such water or mold,
25 Plaintiffs have failed to plausibly allege a design defect in their vehicles.
26 2. Plaintiffs fail to plead facts connecting the alleged design
27 defect to the odors they have purportedly experienced.
28 Plaintiffs defect theory fails for another reason: the mere existence of odor
MORGAN, LEWIS &
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 8 TOYOTAS MOTION TO DISMISS
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1 rejects a broad duty to disclose when the parties are engaged in an arms-length
2 transaction. See Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1141 (9th Cir.
3 2012) (California courts have generally rejected a broad duty to disclose . . .);
4 White v. Potocska, 589 F. Supp. 2d 631, 642 (E.D. Va. 2008) (same under Virginia
5 law); Plastic Packaging Corp. v. Sun Chem. Corp., 136 F. Supp. 2d 1201, 1205 (D.
6 Kan. 2001) (same under Kansas law); TransPetrol, Ltd. v. Radulovic, 764 So. 2d
7 878, 879 (Fla. 4th DCA 2000) (stating that [a] defendants knowing concealment
8 or non-disclosure of a material fact may only support an action for fraud where
9 there is a duty to disclose); Favors v. Matzke, 53 Wash. App. 789, 796 (1989)
10 (same under Washington law).
11 Here, Plaintiffs contend that there is an exception to this general no duty to
12 disclose rule because Defendant possessed superior and exclusive knowledge
13 regarding the defect and the hazard associated with the Defective HVAC system.
14 Compl. at 119 (fraud); 105 (UCL); 209 (FDUTPA); 236 (KCPA); 257 (VCPA);
15 276 (WCPA). As described below, the state laws applicable to the named
16 Plaintiffs omission-based claims differ on this issue.3 Some state laws do not
17 recognize this exception, while others recognize variations of it (and only for
18 certain claims). Nonetheless, even if the law of all applicable states recognized this
19 exception, Plaintiffs have failed to satisfy its requirements.
20 a. Florida law does not have an exclusive knowledge
21 exception.
22 As a general matter, the prevailing view under Florida law does not
23 recognize a categorical exclusive knowledge exception to fraud-based claims.
24 Marriott Intl, Inc. v. Am. Bridge Bah., Ltd., 193 So. 3d 902, 908 (Fla. 3d DCA
25 2015) (dismissing fraud-based claim where there was no fiduciary duty and no
26 3
Plaintiffs Casper, Flinn, Kennedy, and the Stockingers allege that their claims
27 arise respectively under the laws of Florida, Kansas, Virginia, and Washington.
28 Compl. 202, 224, 248, 269. Plaintiff Deys claims are brought under California
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law, were he resides and purchased his vehicle. Compl. 19.
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LOS ANGELES 13 TOYOTAS MOTION TO DISMISS
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1 Washington law).
2 Plaintiffs fail to satisfy their burden of establishing this exception for three
3 reasons. First, Plaintiffs fail to allege in the first instance that Toyota knew about
4 any alleged mold-causing or odor-causing defect at the time of Plaintiffs
5 purchases. Wilson, 668 F.3d at 1145 (requiring that the plaintiffs must sufficiently
6 allege that a defendant was aware of a defect at the time of sale to survive a motion
7 to dismiss). Plaintiffs rely primarily on technical service bulletins (TSBs) to
8 establish Toyotas knowledge (Compl. at 53-62), but TSBs are routine
9 communications to dealerships; they do not reflect knowledge of a defect. See Am.
10 Honda Motor Co. v. Sup. Ct., 199 Cal. App. 4th 1367, 1378 (2011) (A TSB is not
11 and cannot fairly be construed by a trial court as an admission of a design or other
12 defect, because TSBs are routinely issued to dealers to help diagnose and repair
13 typical complaints).
14 Moreover, although the TSBs cited by Plaintiffs acknowledge and describe
15 potential sources of HVAC odors, none of the TSBs show that Toyota was aware,
16 let alone possessed any exclusive knowledge, of any alleged design defectthat
17 is, the retention of water in the HVAC systems that causes mold growth and odors.
18 Several TSBs attached by Plaintiffs also involve vehicle models other than those
19 owned by Plaintiffs. See Compl. at Exh. A [May 9, 1997 TSB re: Air Conditioning
20 Evaporator Odor addressing vehicles not at issue in Plaintiffs Complaint]; Exh. B
21 [Nov. 29, 2011 TSB re: HVAC Odor involving Toyota Camrys]. See, e.g., Fisher
22 v. Honda N. Am., No. LA CV13-09285 JAK, 2014 WL 2808188, at *6 (C.D. Cal.
23 June 12, 2014) (finding TSBs insufficient to support an inference of knowledge
24 because three of the TSBs did not relate to the one model of vehicle at issue, and
25 while only one TSB related to a model of the alleged class vehicle, it did not refer
26 to the defect at issue).
27 Second, Plaintiffs also attempt to show knowledge based on a handful of
28 unverified and undescribed consumer complaints to NHTSA spanning 15 years, as
MORGAN, LEWIS &
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ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 15 TOYOTAS MOTION TO DISMISS
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Case 2:17-cv-00035-VAP-KS Document 28-1 Filed 03/03/17 Page 26 of 36 Page ID #:265
1 Moreover, Toyota disclosed the possibility of HVAC odor in nearly all of the
2 owners manuals for the Plaintiffs vehicleswhich were provided to Plaintiffs at
3 the time of purchase and available online. See Hare Decl. at Exhs. 14. Simply
4 put, Toyota did not have exclusive knowledge regarding the potential for HVAC
5 odor since it disclosed this very information. See Stickrath v. Globalstar, Inc., No.
6 C07-1941 TEH, 2008 WL 344209, at *4 (N.D. Cal. Feb. 6, 2008) (no exclusivity
7 where the defendant disclosed purportedly omitted information in public filings
8 and in an application with the FCC).
9 d. Plaintiff Dey cannot satisfy any unique exceptions
10 triggering a duty to disclose under California law.
11 California consumer protection laws also require that the duty to disclose be
12 tied to a safety issue. Wilson, 668 F.3d at 1141; see also Oestreicher, 544 F.
13 Supp. 2d at 971 (rejecting duty to disclose because alleged defect did not involve a
14 safety issue).4 As described above, Plaintiffs fail to allege a safety issue arising
15 from the alleged defect. Thus, no Plaintiff has alleged a duty to disclose under
16 California consumer protection laws.
17 Further, to the extent Plaintiff Dey (or any other Plaintiff) attempts to
18 establish a duty to disclose based on any active concealment by Toyota of the
19 alleged defect, this exception also fails. Although California recognizes an active
20 concealment exception, see LiMandri v. Judkins, 52 Cal. App. 4th 326, 336
21 (1997), Plaintiff Dey has not alleged any facts that Toyota actively concealed or
22 sought to suppress information in the public domain or obscure the consumers
23
4
24 No duty to disclose non-safety related defects that manifest during the warranty
period exists under California law. Wilson, 668 F.3d at 1141 (manufacturers duty
25 to consumers is limited to its warranty obligations absent either an affirmative
26 misrepresentation or a safety issue). Unless the product presents a safety risk, the
plaintiff must avail himself or herself of the remedies available through the
27 applicable warranty, as mandated by the California UCC. To create a different duty
28 to disclose during the warranty period would eviscerate the parties contractual
MORGAN, LEWIS &
relationshipand the bargained-for rights and remedies in that warranty.
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
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1 ability to discover it. Taragan v. Nissan N. Am., Inc., No. C 09-3660 SBA, 2013
2 WL 3157918, at *7 (N.D. Cal. June 20, 2013) (quoting Gray v. Toyota Motor Sales,
3 U.S.A., No. CV 08-1690 PSG JCX, 2012 WL 313703, at *9 (C.D. Cal. Jan. 23,
4 2012) (holding that mere nondisclosure does not constitute active
5 concealment)). Indeed, the disclosures about the potential for HVAC odor in the
6 owners manuals negates the plausibility of any active concealment theory.
7 C. Plaintiffs Fail To State Breach Of Warranty Claims.
8 1. Plaintiffs breach of express warranty claims fail for
9 multiple reasons.
10 Plaintiffs express warranty claims are based solely on the Toyota New
11 Vehicle Limited Warranty and the Lexus Basic Warranty. Compl. at 38. As
12 Plaintiffs acknowledge, however, these written warranties cover only defects in
13 materials and/or workmanship, which excludes design defects.5 See Bros.v.
14 HewlettPackard Co., No. C-06-02254, 2007 WL 485979, at *4 (N.D. Cal. Feb. 12,
15 2007) (Unlike defects in materials or workmanship, a design defect is
16 manufactured in accordance with the products intended specifications). Courts
17 routinely dismiss breach of express warranty claims based on a design defect when
18 the warranty covers only defects in materials and/or workmanship. See In re
19 Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prod. Liab.
20 Litig., 754 F. Supp. 2d 1145, 1180-81 (C.D. Cal. 2010) (dismissing claim because
21 warranty guaranteeing against materials and workmanship did not extend to
22 design defects); see also Gertz v. Toyota Motor Corp., No. CV 10-1089, 2011 WL
23 3681647, at *3 (C.D. Cal. Aug. 22, 2011) (same).
24 Moreover, regardless of the type of defect at issue, a manufacturer is not
25 liable for breach of express warranty merely because a product manifests recurring
26 5
Plaintiffs occasionally reference a manufacturing defect in their Complaint, but
27 allege no facts to support this assertion. It is clear that Plaintiffs Complaint is
28 limited to an alleged design defect with Plaintiffs HVAC systems. See, e.g.,
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Compl. at 7, 16, 18, 20, 24.
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ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 18 TOYOTAS MOTION TO DISMISS
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1 failures during the warranty period. Rather, the question is whether [a plaintiff]
2 sought repairs, refunds, or replacements and, if so, whether [the manufacturer]
3 responded appropriately under the warranty. Coe v. Philips Oral Healthcare Inc.,
4 No. C13-518-MJP, 2014 WL 722501, at *7 (W.D. Wash. Feb. 24, 2014)
5 (dismissing breach of express warranty claim because the plaintiffs did not allege
6 that they exercised the warranty or that the defendant responded inappropriately).
7 Because no Plaintiff alleges that he or she sought repairs of the alleged defect
8 during the warranty period, the claims must be dismissed. See, e.g., In re Toyota
9 Motor Corp., 754 F. Supp. 2d at 1179 (applying rule).
10 2. Plaintiffs breach of implied warranty of merchantability
11 claims fail for multiple reasons.
12 [I]n the case of automobiles, the implied warranty of merchantability can be
13 breached only if the vehicle manifests a defect that is so basic it renders the vehicle
14 unfit for its ordinary purpose of providing transportation. Am. Suzuki Motor Corp.
15 v. Sup. Ct., 37 Cal. App. 4th 1291, 1296 (1995) (citation omitted); accord Testo v.
16 Russ Dunmire Oldsmobile, Inc., 16 Wash. App. 39, 44 (1976) (same under
17 Washington law); accord Lowe v. Mercedes Benz of N. Am., 103 F.3d 118,1996
18 WL 694433, at *4 (4th Cir. Dec. 5, 1996) (same under Virginia law); accord Fla.
19 Stat. Ann. 672.314 (products need only be fit for ordinary purpose[] for which
20 such goods are used). The implied warranty of merchantability does not require
21 an automobile to be perfect in every detail so long as it provides for a minimum
22 level of quality. Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d
23 962, 980 (C.D. Cal. 2014) (citation omitted); accord Intl Petroleum Serv., Inc. v. S
24 & N Well Serv., Inc., 230 Kan. 452, 454 (1982) (same under Kansas law); see also
25 Troup v. Toyota Motor Corp., 545 F. Appx 668, 669 (9th Cir. 2013) (affirming
26 dismissal of implied warranty claim because alleged defect did not compromise
27 the vehicles safety, render it inoperable, or drastically reduce its mileage range).
28 Plaintiffs conclusory allegation that their vehicles were not fit for the
MORGAN, LEWIS &
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 19 TOYOTAS MOTION TO DISMISS
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1 predicate legal violation under the CLRA, Song-Beverly Act, or MMWA. See
2 Compl. at 102; Lopez v. Washington Mut. Bank, F.A., 302 F.3d 900, 907 (9th Cir.
3 2002) (requiring violation of a predicate law to support an unlawful UCL claim).
4 Plaintiff Dey also fails to allege a claim under the unfair prong of the UCL.
5 In order for a business act to be considered unfair, it must be tethered to some
6 legislatively declared policy or proof of some actual or threatened impact on
7 competition. Cel-Tech Comm., Inc., v. Los Angeles Cell. Tel. Co., 20 Cal. 4th 163,
8 187 (1999); see Lozano v. AT&T Wireless Services, Inc., 504 F.3d 718, 736 (9th
9 Cir. 2007) (rejecting the three part Federal Trade Commission Act (FTCA) test in
10 consumer cases). The Complaint is devoid of any allegations required for an
11 unfair UCL claim, and thus this claim should be dismissed.
12 The WCPA and FDUPTA follow the FTCAs definition of unfair, which
13 exists when a practice causes or is likely to cause substantial injury to consumers
14 which is not reasonably avoidable by consumers themselves and is not outweighed
15 by countervailing benefits. Klem v. Wash. Mut. Bank, 176 Wash. 2d 771, 787
16 (2013) (quoting 15 U.S.C. 45(n)); accord Adelson v. U.S. Legal Support, Inc., 715
17 F. Supp. 2d 1265, 1277 (S.D. Fla. 2010). Plaintiffs Casper and the Stockingers do
18 not even attempt to plead the elements of this theory. Thus, their claims under the
19 WCPA and FDUPTA, respectively, should be dismissed.6
20 E. Plaintiffs Equitable Claims Fail Because They Have Not
21 Established That There is No Adequate Remedy at Law Available.
22 Plaintiffs seek equitable relief in the form of restitution and injunctive relief
23 through their state law consumer protection claims and claims for unjust
24 enrichment. See Compl. at 95, 111, 184, 221, 245, 265, 284. These claims for
25 equitable relief fail for several fundamental reasons.
26 First, it is axiomatic that a court should determine the adequacy of damages
27
6
28 The KCPA has no unfair prong; instead, it prohibits a supplier from engaging in
MORGAN, LEWIS &
any deceptive act or practice. K.S.A. 50-626(a).
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 21 TOYOTAS MOTION TO DISMISS
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1 at law before resorting to equitable relief. See Franklin v. Gwinnett Cnty. Pub.
2 Sch., 503 U.S. 60, 62 (1992). Where the claims pleaded by a plaintiff may entitle
3 her to an adequate remedy at law, equitable relief is unavailable. Rhynes v. Stryker
4 Corp., No. 10-5619 SC, 2011 WL 2149095, at *4 (N.D. Cal. May 31, 2011)
5 (emphasis added); accord Licul v. Volkswagen Grp. of Am., Inc., No. 13-61686-
6 CIV, 2013 WL 6328734, at *7 (S.D. Fla. Dec. 5, 2013) (Florida law); accord
7 Shafer, Kline & Warren, Inc. v. The Allen Grp.-Kansas City, LLC, No. 13-2472-
8 JAR-TJJ, 2014 WL 1974525, at *2 (D. Kan. May 15, 2014) (Kansas law); accord
9 Seattle Profl Engg Employees Assn v. Boeing Co., 139 Wash. 2d 824, 839 (2000)
10 (Washington law). Here, Plaintiffs allege they are entitled to an adequate legal
11 remedy through their breach of warranty, fraud, and statutory consumer protection
12 claims, which may entitle them to damages. See Compl., e.g., at 124, 147, 159,
13 198, 220, 244, 265, 283. Thus, the Complaint does not and cannot sufficiently
14 allege that an adequate legal remedy is not available. Durkee v. Ford Motor Co.,
15 No. C 14-0617 PJH, 2014 WL 4352184, at *2 (N.D. Cal. Sept. 2, 2014).
16 Second, Plaintiffs claims for equitable relief fail because they allege no
17 distinction between the factual basis for their claims seeking equitable remedies and
18 their claims seeking legal remedies. See Zapata Fonseca v. Goya Foods, Inc., No.
19 16-CV-02559-LHK, 2016 WL 4698942, * 7 (N.D. Cal. Sept. 8, 2016) (because the
20 plaintiffs claims seeking equitable relief rel[ied] upon the same factual predicates
21 as . . . [the] [p]laintiffs legal causes of action . . . they must be dismissed).
22 Accordingly, Plaintiffs requests for equitable relief, including their UCL, CLRA,
23 and unjust enrichment claims, should be dismissed.7
24 Third, Plaintiffs claims for unjust enrichment (Compl. at 179 185) must
25 be dismissed because Plaintiffs allege the existence and enforceability of an express
26 contract and unjust enrichment is unavailable to redefine that relationship. See
27
7
28 The UCL only allows for equitable remedies. See Korea Supply Co. v. Lockheed
MORGAN, LEWIS &
Martin Corp., 29 Cal. 4th 1134, 1144 (2003).
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 22 TOYOTAS MOTION TO DISMISS
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1 Plaintiffs purchased. Indeed, Plaintiffs very pleading shows the opposite; the
2 October 17, 2013 Safety Recall for HVAC Assemblywhich has nothing to do
3 with HVAC odorstates that only certain Avalon, Camry, and Venza vehicles are
4 covered by the recall because [t]he HVAC assembly used on other vehicles is of a
5 different design. Compl. at Exh. E. See e.g. Wilson v. Frito-Lay N. Am., Inc., 961
6 F. Supp. 2d 1134, 1142 (N.D. Cal. 2013) (dismissing claims regarding unpurchased
7 products with prejudice because the court will not assume that each of these subtly
8 different Products is like all the others and plaintiffs have to say more, especially
9 when they are asserting standing as to Products they did not purchaseotherwise
10 their pleadings amount to unacceptably bare legal conclusions).
11 Likewise, because Plaintiffs do not allege any facts about the marketing of
12 the other 34 different vehicles they never purchased, Plaintiffs do not and cannot
13 show that any unidentified misrepresentations or omissions they rely upon were
14 uniform across the sale of those disparate vehicleswhich took place at different
15 times and dealerships across the country.
16 Put simply, Plaintiffs lack standing to bring claims for injuries regarding
17 vehicles about which they have asserted no facts and to which they have no
18 connection. Plaintiffs should not be entitled to engage in a class-wide discovery
19 fishing expedition over such claims based on a sweeping and conclusory allegation
20 of a supposed common defect. Although all of Plaintiffs claims should be
21 dismissed in this action, at a minimum, the Court should dismiss the claims as to
22 models not purchased by the named Plaintiffs.
23 IV. CONCLUSION
24 For the foregoing reasons, Toyota respectfully requests the Court grant this
25 motion to dismiss Plaintiffs Complaint.
26
27
28
MORGAN, LEWIS &
BOCKIUS LLP
ATTORNEYS AT LAW MEMORANDUM IN SUPPORT OF
LOS ANGELES 25 TOYOTAS MOTION TO DISMISS
DB1/ 90970339.8
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