Pilgrim v. Gen. Motors Co.

• Decision Date: 04 October 2019
• Docket Number: Case No. CV 15-8047-JFW (Ex)
• Citation: Pilgrim v. Gen. Motors Co., 408 F.Supp.3d 1160 (C.D. Cal. 2019)
• Parties: William D. PILGRIM, et al. v. GENERAL MOTORS COMPANY
• Court: U.S. District Court — Central District of California

408 F.Supp.3d 1160

William D. PILGRIM, et al.

v.GENERAL MOTORS COMPANY

Case No. CV 15-8047-JFW (Ex)

United States District Court, C.D. California.

Filed October 4, 2019

ATTORNEYS PRESENT FOR PLAINTIFFS: None

ATTORNEYS PRESENT FOR DEFENDANTS: None

PROCEEDINGS (IN CHAMBERS): ORDER GRANTING IN PART AND DENYING IN PART GENERAL MOTORS' MOTION TO DISMISS PLAINTIFFS' SECOND AMENDED COMPLAINT [filed 8/26/19; Docket No. 53]

HONORABLE JOHN F. WALTER, UNITED STATES DISTRICT JUDGE

On August 26, 2019, Defendant General Motors LLC ("GM") filed a Motion to Dismiss Plaintiffs' Second Amended Complaint ("Motion"). On September 6, 2019, Plaintiffs Estate of William D. Pilgrim, Walter Goetzman, Chad Reese, Jerome E. Pederson, Ahmed J. Cannon, Michael Fernandez, Roy Haleen, Howard Kopel, Robert C. Murphy, Mike Peters, Marc Adams, Kaleb Isley, Kai Qian, Mark Rowe, Dallas Wicker, Miguel Quezada, Christopher Constantine, Bradley Grant, John Parsons, Robert L. Briggs, Robert Edgar, Roger L. Browning, Lyle Dunahoo, Aaron Clark, Alan Pelletier, Edwin William Krause, Frank Juzswik, S. Garrett Beck, David Sheldon, Jan Engwis, Adam Balducci, Alan Ferrer, Jared Kiley, Jeff Kolodzi, Derek Van Den Top, Morris Smith, Andres Frey, Shawn Bain, Jeffrey M. Millslagle, Robert Geiss, Lyle Barkley, Dennis Palmquist, Anthony Stack, Randy Standke, Tuan Bui, Mathew Evans, David Ward, David Penrod, Devry Davis, William Church, Edwin Rojas, Richard Jenkins, James Osheim, John Pendleton, Jack Woodall, John Lebar, and Benjamin Luke (collectively, "Plaintiffs") filed their Opposition. On September 16, 2019, GM filed a Reply. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the Court found the matter appropriate for submission on the papers without oral argument. The matter was, therefore, removed from the Court's September 30, 2019 hearing calendar and the parties were given advance notice. After considering the moving, opposing, and reply papers, and the arguments therein, the Court rules as follows:

I. Factual and Procedural Background

A. Factual Background

In this putative class action, Plaintiffs are fifty-seven current or former owners or lessees of 2006-2013 Chevrolet Corvette Z06 and 2013 Chevrolet Corvette 427. Seventeen plaintiffs are citizens of California (collectively, the "California Plaintiffs"), and the remaining forty plaintiffs reside in twenty different states: Arizona, Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Montana, New Jersey, Ohio, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin (collectively, the "Non-California Plaintiffs").¹ The former General Motors Corporation ("Old GM") manufactured the 2006-2009 model year Corvettes that are the subject of this action.² Model year 2010 and later vehicles that are the subject of this action were manufactured by General Motors LLC ("GM").

In the Second Amended Complaint, Plaintiffs allege that the engines in their 2006-2013 Chevrolet Corvette Z06 and 2013 Corvette 427 have an unspecified defect that results in "excessive" or "early" wear of the engine's valve guides. Although Plaintiffs do not allege any specific design or manufacturing defect that causes the alleged excessive valve guide wear, they allege that this unspecified defect renders their vehicles' engines "susceptible to frequent mechanical failure." Of the fifty-seven Plaintiffs, only nineteen Plaintiffs allege that they have actually experienced any engine trouble and the remaining thirty-eight Plaintiffs do not allege any interference with the use or operation of their vehicles. Instead, ten Plaintiffs allege that they paid for valve guide repairs, eleven Plaintiffs claim that their valve guides were diagnosed as "out of specification" by unidentified mechanics without any allegation that they paid for repairs, nine Plaintiffs claim that their vehicles exhibit valve guide wear even though their vehicles were never inspected by a mechanic, and, as to the remaining eight Plaintiffs, there are no signs of any valve guide wear. Despite claiming that valve guide wear is a safety hazard that may cause fires and loss of steering or braking power, none of the Plaintiffs have experienced any safety hazard or suffered any injuries.

Plaintiffs allege in conclusory fashion that GM was aware of the purportedly excessive valve guide wear, and misrepresented "the characteristics, uses, benefits, and qualities" of Plaintiffs' vehicles. Plaintiffs do not allege that they saw or relied on any specific GM advertisement, statements, or other materials in making their purchasing decisions. Instead, Plaintiffs allege that GM advertised the vehicles as "being of the highest quality and durability."

B. Procedural Background

On October 14, 2015, Plaintiffs filed their Complaint. On December 22, 2015, Plaintiffs filed a First Amended Complaint. On January 25, 2016, pursuant to a stipulation, this Court entered an Order staying this action pending the Bankruptcy Court's final order on the Motion to Enforce, filed January 19, 2016 in Case No. 09-50026 (MG), In re Motors Liquidation Co. (Bankr. S.D.N.Y.), and any final appellate ruling sought by either side. On July 16, 2019, pursuant to a stipulation, the Court lifted the stay of this action.

On July 26, 2019, Plaintiffs filed a Second Amended Complaint against GM, alleging sixty claims for relief. Those sixty claims for relief can be divided into ten categories: (1) violation of the Magnuson-Moss Warranty Act ("MMWA")³ ; (2) negligence⁴ ; (3) violation of the California Consumer Legal Remedies Act ("CLRA")⁵ ; (4) violation of the California Unfair Competition Law ("UCL")⁶ ; (5) fraud by concealment⁷ ; (6) violation of the Song-Beverly Consumer Warranty Act ("Song-Beverly")⁸ ; (7) negligent failure to recall⁹ ; (8) violations of various state consumer protection statutes¹⁰ ; (9) breach of implied warranty¹¹ ; and (10) implied warranty in tort.¹² Plaintiffs seek to represent statewide classes of purchasers and lessees of 2006-2013 Chevrolet Corvette Z06 and 2013 Chevrolet Corvette 427 vehicles in California and twenty other states.

II. Legal Standard

A. Rule 12(b)(2)

Whether a federal court can exercise personal jurisdiction over a non-resident defendant turns on two independent considerations: whether an applicable state rule or statute permits service of process on the defendant, and whether the assertion of personal jurisdiction comports with constitutional due process principles. See Pacific Atlantic Trading Co. v. M/V Main Express , 758 F.2d 1325, 1327 (9th Cir. 1985).

California's long-arm statute extends jurisdiction to the limits of constitutional due process. See Gordy v. Daily News, L.P. , 95 F.3d 829, 831 (9th Cir. 1996) ; Cal. Code. Civ. Proc. § 410.10 ("A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States"). Consequently, when service of process has been effected under California law, the two prongs of the jurisdictional analysis collapse into one – whether the exercise of jurisdiction over the defendant comports with due process. See Fireman's Fund Ins. Co. v. National Bank of Cooperatives , 103 F.3d 888, 893 (9th Cir. 1996) ; Aanestad v. Beech Aircraft Corp. , 521 F.2d 1298, 1300 (9th Cir. 1974).

The Fourteenth Amendment's Due Process Clause permits courts to exercise personal jurisdiction over a defendant who has sufficient "minimum contacts" with the forum state that "maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). There are two recognized bases for personal jurisdiction over nonresident defendants: (1) "general jurisdiction," which arises where the defendant's activities in the forum state are sufficiently "substantial" or "continuous and systematic" to justify the exercise of jurisdiction over him in all matters; and (2) "specific jurisdiction," which arises when a defendant's specific contacts with the forum have given rise to the claim in question. See Helicopteros Nacionales de Colombia S.A. v. Hall , 466 U.S. 408, 414-16, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). See Doe v. American Nat'l Red Cross , 112 F.3d 1048, 1050-51 (9th Cir. 1997) ; Fields [ v. Sedgwick Associated Risks, Ltd.] , supra , 796 F.2d [299] at 301-02 [ (1986) ].

B. Rule 12(b)(6)

A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. "A Rule 12(b)(6) dismissal is proper only where there is either a ‘lack of a cognizable legal theory’ or ‘the absence of sufficient facts alleged under a cognizable legal theory.’ " Summit Technology, Inc. v. High-Line Medical Instruments Co., Inc. , 922 F. Supp. 299, 304 (C.D. Cal. 1996) (quoting Balistreri v. Pacifica Police Dept. , 901 F.2d 696, 699 (9th Cir. 1988) ). However, "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007). "[F]actual allegations must be enough to raise a right to relief above the speculative level." Id. at 1965.

In addition, Rule 9(b) provides: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). The heightened pleading requirements of Rule 9(b) are designed "to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong." Neubronner v. Milken , 6 F.3d 666, 671 (9th Cir. 1993). In order to...