In re MyFord Touch Consumer Litig.

• Decision Date: 30 May 2014
• Docket Number: No. C–13–3072 EMC,C–13–3072 EMC
• Citation: In re MyFord Touch Consumer Litig., 46 F. Supp. 3d 936 (N.D. Cal. 2014)
• Court: U.S. District Court — Northern District of California
• Parties: In re MyFord Touch Consumer Litigation.

46 F.Supp.3d 936

In re MyFord Touch Consumer Litigation.

No. C–13–3072 EMC

United States District Court, N.D. California.

Signed May 30, 2014

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS

(DocketNo. 56)

EDWARD M. CHEN, United States District Judge

Plaintiffs are twenty-three persons and one organization residing in fifteen different states.They have filed a class action against DefendantFord Motor Company, asserting, in essence, that an “infotainment system”—known as MyFord Touch (“MFT”)—used in certain of its vehicles (Ford, Lincoln, and Mercury) is defective and that Ford knew the system was defective at the time it sold the vehicles to Plaintiffs and other putative class members.Plaintiffs have asserted various claims under federal and state law, but the claims can loosely be categorized into (1) fraud claims and (2) breach-of-warranty claims.Ford has challenged the bulk of the claims in the currently pending motion to dismiss.

Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby GRANTS in part and DENIES in part Ford's motion.

I.FACTUAL & PROCEDURAL BACKGROUND

As a preliminary matter, the Court provides below a chart which lists the name of each named Plaintiff, the state of Plaintiff's residence, whether Plaintiff purchased or leased the car, the car that was purchased or leased, and the date of purchase or lease.¹

Name	State	Purchase or Lease	Car	Date of Purchase or Lease
Jennifer Whalen	California	Purchase	2013 Ford Explorer XLT	4/2012
Center for Defensive Driving (CDD)	California	Lease	2013 Ford F–150 Lariat	2/22/2013
Grif Rosser	California	Purchase	2013 Ford Focus ST	9/29/2012
Megan Raney–Aarons	California	Lease	2012 Ford Edge	2/2012
Richard Decker Watson	California	Purchase	2011 Lincoln MKX	10/2012
Darcy Thomas–Maskrey	California	Purchase	2013 Ford Flex	7/2012
Angela Battle	Alabama	Purchase	2011 Ford Fusion	5/2011
Joe D'Aguanno	Arizona	Purchase	2013 Ford Explorer Sport	11/2012
James Laurence Sheerin	Colorado	Purchase	2013 Ford Explorer Limited	6/18/2012
Deb Makowski	Connecticut	Purchase	2011 Ford Escape	9/1/2011

Name	State	Purchase or Lease	Car	Date of Purchase or Lease
George Oremland	Florida	Purchase	2012 Lincoln MKZ	12/2011
Thomas Mitchell	Iowa	Purchase	2011 Lincoln MKX	11/8/2010
William Creed	Massachusetts	Purchase	2011 Ford Explorer	3/14/2011
Joshua Matlin	New Jersey	Lease	2011 Ford Edge SE	10/28/2010
Russ Rizzo	New Jersey	Lease	2012 Ford Explorer XLT 4 Wheel Drive	2/2012
Jeffrey Miller	New York	Lease	2013 Ford Fusion Titanium	2/17/2013
Nuala Purcell	New York	Lease	2011 Ford Edge	11/2010
Daniel Fink	North Carolina	Purchase	2013 Ford Explorer	12/2012
Jason Zuchowski	Ohio	Lease	2012 Ford Edge	3/2012
Art Avedisian	Pennsylvania	Purchase	2011 Ford Expedition EL	1/31/2011
Jose Randy Rodriguez	Texas	Purchase	2012 Ford Focus Titanium	5/17/2011
Michael Ervin	Texas	Purchase	2013 Ford C–Max SEL	10/14/2012
Jason Connell	Virginia	Purchase	2011 Lincoln MKX	10/2010
Henry Miller–Jones	Virginia	Purchase	2013 Ford Fusion Titanium AWD	4/20/2013

In their operative complaint, Plaintiffs allege as follows.

The MFT system is

a factory-installed, integrated in-vehicle communication, navigation, and entertainment system that allows users to use a rearview camera, control vehicle climate, operate adaptive cruise control, receive navigational direction, make hands-free telephone calls, control music, and perform other functions with voice and touch commands.[MFT] also includes 9–1–1 Assist, which automatically contacts emergency personnel with the vehicle's coordinates in case of an accident.In addition to touchscreen and voice-based commands, [MFT] also features a steering wheel control panel.

FAC ¶ 232.Pictures of what the MFT system looks like can be found in paragraphs 242–43 and 245 of the complaint.Ford has promoted the MFT system, including in particular its safety, communication, and entertainment features, in various ways—e.g., on its website, through advertisements (including print and television), and through dealerships.See, e.g.,FAC ¶¶ 22, 49, 66, 251–61.

MFT is powered by an operating system known as Ford SYNC.SeeFAC ¶ 3.Ford SYNC is also the name of the earlier, first generation of the MFT system.SeeFAC ¶ 233.“Ford designed and developed SYNC with Microsoft and installed the original Sync system in Ford vehicles in 2007.”FAC ¶ 233.“The initial versions of Ford SYNC, however, did not include a touchscreen, like [MFT].”FAC ¶ 233.

“In January 2010, hoping to capitalize on the success of SYNC, Ford announced that it would be launching a second generation of SYNC called [MFT].[MFT] was a much more comprehensive technology which utilized Ford SYNC as the operating system, but included many more features than had been available with the initial versions of Ford SYNC.”FAC ¶ 235.Ford aimed to employ MFT in all of its vehicles, not just its higher-end vehicles.SeeFAC ¶ 237.The rollout of the MFT system began in 2010(i.e., for 2011 model vehicles).SeeFAC ¶¶ 16, 238.“Currently, more than 5 million Ford vehicles contain [MFT].”FAC ¶ 238.In a June 2013 press release, Ford stated that, “combined, Sync and [MFT] systems are sold on 79 percent of new 2013 Ford vehicles.”FAC ¶ 239.

Ford charges a premium for the MFT system.“As a stand-alone option, Ford's suggested retail price for the [MFT] system is approximately $1,000.Customers can add further options to their [MFT] system—such as GPS navigation capability—by paying additional fees of several hundred dollars.”FAC ¶ 241.

However, according to Plaintiffs, there are serious problems with the MFT system.Plaintiffs underscore that “[t]he scope of the problem is wide.In late 2012, Ford reported 400 problems with the [MFT] system for every 1000 vehicles.That was an improvement over the problems earlier in 2012 when Ford reported a ‘things-gone-wrong’ rate for its [MFT] system of 500 for every 1000 vehicles.”FAC ¶ 10.

Plaintiffs have identified various problems with the MFT system, ranging from the entire system freezing up or crashing (in which case no features connected to MFT are operational, including the navigation technology, the radio, the rearview camera, and the defroster) to isolated problems such as random but frequent screen black outs, nonresponsiveness to touch or voice commands, locking up of the rearview camera, and inaccurate directions on the navigation system.SeeFAC ¶ 7;see alsoFAC ¶¶ 262–63.Plaintiffs maintain that the problems with the MFT system actually create safety risks as malfunctions in the system lead to the driver becoming distracted.SeeFAC ¶ 263.Also, there are more obvious safety risks involved when, e.g., the rearview camera or defroster breaks down.Plaintiffs maintain that, although there are varying problems with the MFT system, there is an underlying defect in the system attributable to software and/or hardware.SeeFAC ¶¶ 268–69.

Plaintiffs assert that Ford failed to conduct adequate testing of the MFT system prior to its release.See, e.g.,FAC ¶ 271.Furthermore, soon after the release of the system, customer complaints began to mount.In response, Ford began to issue Technical Service Bulletins (“TSBs”) and software updates.“TSBs are recommended repairs issued by the manufacturer and sent to dealers.”FAC ¶ 274.The first TSB was issued on April 27, 2011.SeeFAC ¶ 275.TSBs continued to be issued through at least October 3, 2013.SeeFAC ¶ 286.Plaintiffs have identified at least eight TSBs, as well as multiple software updates.See generallyFAC ¶¶ 274–87.

According to Plaintiffs, in spite of the TSBs and software updates, Ford still has not fixed the problem with MFT—this in spite of the fact that, at the very least, there is an express limited warranty on each vehicle.SeeFAC ¶¶ 297–300.A copy of the relevant limited warranty can be found at Exhibit A of Ford's request for judicial notice.SeeDocket No. 57–2(RJN, Ex. A)(limited warranty).The limited warranty provides, in relevant part, as follows:

Under your New Vehicle Warranty if:

—your Ford vehicle is properly operated and maintained, and

—was taken to a Ford dealership for a warranted repair during the warranty period,

then authorized Ford Motor Company dealers will, without charge, repair, replace, or adjust all parts on our vehicle that malfunction or fail during normal use during the applicable coverage period due to a manufacturing defect in factory-supplied materials or factory workmanship.

This warranty does not mean that each Ford vehicle is defect free.Defects may be unintentionally introduced into vehicles during the design and manufacturing processes and such defects could result in the need for repairs.For this reason, Ford provides the New Vehicle Limited Warranty in order to remedy any such defects that result in vehicle part malfunction or failure during the warranty period.

The remedy under this written warranty, and any implied warranty, is limited to repair, replacement, or adjustment of defective parts.This exclusive remedy shall not be deemed to have failed its essential purpose so long as Ford, through its authorized dealers, is willing and able to repair, replace, or adjust defective parts in the prescribed manner.Ford's liability, if any, shall in no event exceed the cost of correcting manufacturing defects as herein provided and upon expiration of this warranty, any such liability shall terminate.

....

Nothing in this warranty should be construed as requiring defective parts to be replaced with parts of a different type of design than the original part, so long as the vehicle functions properly with the replacement part.Moreover, Ford and its authorized dealers are entitled to a reasonable time and a reasonable number of attempts within which to diagnose and repair any defect covered by this warranty.

Docket No. 57–2(RJN, Ex. A)(Limited Warrantyat 8–9)(emphasis added).

II.LEGAL STANDARD

Ford has moved for a dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6).Rule 12(b)(6) allows for dismissal based on a failure to state a claim for...