United States v. Polaris Sales, Inc.

• Decision Date: 31 July 2020
• Docket Number: Case No. 2:19-cv-06830-ODW (KSx)
• Court: U.S. District Court — Central District of California
• Parties: UNITED STATES OF AMERICA, Plaintiffs, v. POLARIS SALES, INC. et al., Defendants.

UNITED STATES OF AMERICA, Plaintiffs, v. POLARIS SALES, INC. et al., Defendants.

Case No. 2:19-cv-06830-ODW (KSx)

United States District Court Central District of California

July 31, 2020

ORDER DENYING DEFENDANTS POLARIS SALES, INC. AND POLARIS INDUSTRIES INC.'S MOTION TO DISMISS [29] AND GRANTING DEFENDANT ERNEST YANEZ, JR.'S MOTION TO DISMISS [31]

I. INTRODUCTION

Before the Court are two motions: Defendants Polaris Industries Inc. and Polaris Sales Inc.'s (collectively "Polaris") Motion to Dismiss, (Mot. to Dismiss ("Polaris Motion"), ECF No. 29), and Defendant Ernest Yanez, Jr.'s Motion to Dismiss (Mot. to Dismiss ("Yanez Motion"), ECF No. 31). For the following reasons, the Court DENIES Polaris's Motion and GRANTS Yanez's Motion.¹

II. FACTUAL BACKGROUND

The United States ("Government") owns National Forest System lands in San Bernardino County, California and brings this action against Polaris and individual Defendant Yanez on behalf of the United States Department of Agriculture, Forest Service. (First Am. Compl. ("FAC"), ¶ 1, ECF No. 28.) Polaris is a corporation that designed, manufactured, marketed, and sold off-highway vehicles that allegedly posed serious fire risks and had a history of malfunctioning and igniting fires. (FAC ¶¶ 2, 9.) Over the years, Polaris issued several recalls of these vehicles, including its RZR model. (FAC ¶¶ 11-12.) For instance, in April 2016, Polaris recalled 133,000 2013-2016 RZR 900 and RZR 1000 vehicles, citing a series of fire reports. (FAC ¶ 12.)

On August 7, 2016, Yanez's 2015 RZR vehicle allegedly malfunctioned and started a fire ("Pilot Fire") that burned approximately 8,110 acres of the San Bernardino National Forest. (FAC ¶¶ 3, 7-8.) The Government alleges that Yanez's RZR had an excessive heat defect, which Polaris knew about but did not adequately warn about. (FAC ¶¶ 25, 28.) The Government allegedly sustained costs in excess of $11,645,000.00 to suppress the Pilot Fire and rehabilitate the burned areas. (FAC ¶¶ 32-34.)

The Government asserts four claims against Polaris and Yanez: (1) negligence; (2) violations of California Health & Safety Code sections 13001 and 13007-13009.1, and California Civil Code section 3287; (3) violations of California Public Resources Code section 4421² and 36 C.F.R. § 261.5; and (4) trespass by fire. (FAC ¶¶ 37-60.) The Government also claims that Polaris is subject to strict product liability. (FAC ¶¶ 61-68.)

III. LEGAL STANDARD

A court may dismiss a complaint under Federal Rule of Civil Procedure ("Rule") 12(b)(6) for lack of a cognizable legal theory or insufficient facts pleaded to support an otherwise cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). To survive dismissal, a complaint need only satisfy the minimal notice pleading requirements of Rule 8(a)(2)—a short and plain statement of the claim. Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). The factual "allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). That is, the 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, 678 (2009) (internal quotation marks omitted).

The determination of whether a complaint satisfies the plausibility standard is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. A court is generally limited to the pleadings and must construe all "factual allegations set forth in the complaint . . . as true and . . . in the light most favorable" to the plaintiff. Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001). However, a court need not blindly accept conclusory allegations, unwarranted deductions of fact, and unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

Where a district court grants a motion to dismiss, it should generally provide leave to amend unless it is clear the complaint could not be saved by any amendment. See Fed. R. Civ. P. 15(a); Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Leave to amend may be denied when "the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986). Thus, leave to amend "is properlydenied . . . if amendment would be futile." Carrico v. City of San Francisco, 656 F.3d 1002, 1008 (9th Cir. 2011).

IV. DISCUSSION

Under Rule 12(b)(6), Polaris moves to dismiss the Government's second and third claims against it, while Yanez moves to dismiss only the third claim against him. (See Polaris Mot. 1; Yanez Mot. 3.) The Court addresses Yanez's Motion first.

A. Yanez's Motion to Dismiss

Yanez moves to dismiss the Government's third claim for violations of California Public Resources Code section 4421 and 36 C.F.R. section 261.5. (Yanez Mot. 3.) Specifically, Yanez argues that the Government cannot state a cognizable cause of action under either of those authorities, and thus the Court should dismiss the third claim against Yanez without leave to amend. (Yanez Mot. 6.)

a. Violation of California Public Resources Code Section 4421

Yanez challenges the applicability of California Public Resources Code section 4421 to this case on the grounds that it: (1) does not give rise to a stand-alone claim; (2) relates to prescribed burns only; and (3) requires intentional conduct. (Yanez Mot. 6.)

First, Yanez contends that the Government's basis for liability as to the third claim is negligence per se, which does not give rise to a private right of action for a statutory violation in California. (Yanez Mot. 7.) Thus, Yanez argues that the Court should dismiss this claim as duplicative of the first claim for negligence. (Yanez Mot. 7.) The Government denies that the third claim is duplicative and asserts that bringing it separately helps "make clear that the defendants' alleged violation of [section 4421] . . . is a specific basis for proving the defendants' liability in this action." (Opp'n to Yanez Mot. ("Yanez Opp'n") 7, ECF No. 35.) The Government neither disputes Yanez's characterization of its argument as one based on negligence per se nor provides caselaw treating a violation of section 4421 as a stand-alone claim.

When a statute "serves the subsidiary function of providing evidence of anelement of a preexisting common law cause of action," that is distinct from creating a new private right of action. Crusader Ins. Co. v. Scottsdale Ins. Co., 54 Cal. App. 4th 121, 125 (1997). To determine whether a violation of a statute gives rise to a private cause of action, courts consider whether the California Legislature "manifested an intent to create . . . a private cause of action." Lu v. Hawaiian Gardens Casino, Inc., 50 Cal. 4th 592, 596 (2010) (internal quotation marks omitted). "Such legislative intent, if any, is revealed through the language of the statute and its legislative history." Id.

If the statute contains "clear, understandable, unmistakable terms," then that strongly indicates the Legislature intended to create a private cause of action. Id. at 597 (citing Moradi-Shalal v. Fireman's Fund Ins. Co., 46 Cal. 3d 287, 295 (1988)). For instance, "the statute may expressly state that a person has or is liable for a cause of action" for a violation or it "may refer to a remedy or means of enforcing its substantive provisions." Id. Absent such language, courts review the statute's legislative history for evidence of the Legislature's intent. Id.

Here, there is no caselaw that clearly addresses the issue of whether a private cause of action exists under section 4421. Therefore, the Court will look to the statute's language and legislative history to determine whether the Legislature intended to create a private cause of action.

Section 4421 provides that:

A person shall not set fire or cause fire to be set to any forest, brush, or other flammable material which is on any land that is not his own, or under his legal control, without the permission of the owner, lessee, or agent of the owner or lessee of the land.

This language does not "clearly, understandably, or unmistakably" create a private cause of action. The statute neither mentions causes of action nor references remedies or a means of enforcement. See Lu, 50 Cal. 4th at 596. Since express language creating a private cause of action is absent from section 4421, the Court will nowexamine the statute's legislative history.

Section 4421's legislative history is minimal and does not provide an extensive analysis for the Court to consider. However, section 4421 is cross-referenced in section 4021, which provides that "the willful or negligent commission of any of the acts prohibited or the omission of any of the acts required by . . . Chapter 6 (commencing with Section 4411), inclusive, of Part 2 of this division is a misdemeanor." Cal. Pub. Res. Code § 4021. Moreover, the conduct prohibited under section 4421 is also invoked to establish liability under California Health and Safety Code sections 13007 and 13008. The interplay between all these statutes makes it clear that the conduct identified in section 4421 serves as basis for liability for other statutes but does not clearly establish a private cause of action. Indeed, the Government's own argument invokes section 4421 as a basis for liability for its other claims.

In situations like this one, where express language is absent from a statue and its history, it is the party who advocates for judicial recognition of a private right of action that "bears a heavy, perhaps insurmountable, burden of persuasion." Crusader, 54 Cal. App. 4th at 133. Here, the Government did not satisfy this burden, and thus the Court need not reach Yanez's other arguments. The Court GRANTS Yanez's ...