Woo v. Am. Honda Motor Co.

• Decision Date: 28 May 2020
• Docket Number: Case No. 19-cv-07042-MMC
• Citation: 462 F.Supp.3d 1009
• Court: U.S. District Court — Northern District of California
• Parties: Tony WOO, et al., Plaintiffs, v. AMERICAN HONDA MOTOR CO., INC., Defendant.

462 F.Supp.3d 1009

Tony WOO, et al., Plaintiffs,

v.AMERICAN HONDA MOTOR CO., INC., Defendant.

Case No. 19-cv-07042-MMC

United States District Court, N.D. California.

Signed May 28, 2020

Stephen Taylor, Pro Hac Vice, Lemberg Law, LLC, Wilton, CT, Trinette Gragirena Kent, San Francisco, CA, for Plaintiffs.

Livia M. Kiser, King & Spalding LLP, Chicago, IL, Michael Brian Shortnacy, King & Spalding, Los Angeles, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS FIRST AMENDED COMPLAINT; AFFORDING PLAINTIFFS LEAVE TO AMEND; CONTINUING CASE MANAGEMENT CONFERENCE

MAXINE M. CHESNEY, United States District Judge

Before the Court is defendant American Honda Motor Co.'s ("Honda") Motion, filed February 27, 2020, "to Dismiss the First Amended Class Action Complaint." Plaintiffs Tony Woo ("Woo"), Daniel Rifkin ("Rifkin"), and Douglas P. Schwert ("Schwert") have filed opposition, to which Honda has replied. Having read and considered the papers filed in support of and in opposition to the motion, the Court rules as follows.¹

BACKGROUND

In the operative complaint, the First Amended Complaint ("FAC"), plaintiffs allege that Rifkin, on or about April 6, 2017, purchased a new Honda CR-V EX vehicle from an authorized Honda dealership in Denver, Colorado (see FAC ¶ 96), that Schwert, on or about December 30, 2017, purchased a new 2018 Honda CR-V Touring vehicle from an authorized Honda dealership in Chattanooga, Tennessee (see FAC ¶ 119), and that Woo, on or about January 12, 2019, purchased a new 2018 Honda CR-V EX vehicle from an authorized Honda dealership in Chico, California (see FAC ¶ 71).

Plaintiffs allege that each plaintiff's vehicle has a "Display Screen" allowing him to "access and operate [the] [v]ehicle's safety, information, communication, and entertainment features[,] such as smartphone integration, hands-free calling, navigation (if equipped), Bluetooth audio streaming, radio and music controls, rear-view camera and vehicle settings." (See FAC ¶ 3.) According to plaintiffs, their respective Display Screens are "defective" in that they "dim and go dark, freeze, or shine at full brightness, causing driver distraction and rendering the [vehicles'] information center inoperable." (See FAC ¶ 2.) Plaintiffs allege such "malfunctions" occur "regularly and unexpectedly." (See FAC ¶ 5.)

Plaintiffs also allege that, although Honda "was on actual notice of hundreds, perhaps thousands, of consumers nationwide complaining about the Display Defect before any of the [p]laintiffs bought their cars" (see FAC ¶ 36), Honda "failed to disclose or actively concealed at ... the time of [plaintiffs'] purchases" the "defects relating to the Display Screen" (see FAC ¶ 57). Plaintiffs further allege that each of them, after experiencing the above-referenced "defects," took his vehicle to one or more Honda dealerships, which, in each instance, was unable to fix the "defect" (see FAC ¶¶ 74-89, 99-111, 122-32, 136-39).

Based on the above allegations, plaintiffs, on their own behalf and on behalf of a putative class, assert nine Causes of Action, each based on one or more of the following three theories: (1) Honda, by not repairing the alleged defect, breached the express terms of its "New Vehicle Limited Warranty," which warranty, plaintiffs assert, requires Honda to "repair original components found to be defective in material or workmanship under normal use and maintenance" (see FAC ¶ 167); (2) Honda breached the implied warranty of merchantability, as the alleged defect makes drivers "less safe by detracting their attention and poses enough of a safety risk that [the] [v]ehicles cannot be said to provide safe and reliable transportation" (see FAC ¶¶ 193, 195); and (3) Honda engaged in deceptive and unfair business practices by selling vehicles to plaintiffs "with knowledge that [the vehicles] contained defects with their Display Screen and knowingly concealed said defects from [p]laintiffs" (see FAC ¶ 207).

LEGAL STANDARD

Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure "can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). Rule 8(a)(2), however, "requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief.’ " See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Fed. R. Civ. P. 8(a)(2) ). Consequently, "a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations." See id. Nonetheless, "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." See id. (internal quotation, citation, and alteration omitted).

In analyzing a motion to dismiss, a district court must accept as true all material allegations in the complaint and construe them in the light most favorable to the nonmoving party. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). "To survive a motion to dismiss, a complaint must contain sufficient factual material, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). "Factual allegations must be enough to raise a right to relief above the speculative level[.]" Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Courts "are not bound to accept as true a legal conclusion couched as a factual allegation." See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (internal quotation and citation omitted).

DISCUSSION

In its motion, Honda seeks dismissal of each claim, and, to the extent any such claim is not dismissed, an order finding plaintiffs may not proceed on behalf of a nationwide class.

A. Failure to State a Claim

As noted, the FAC includes nine Causes of Action, which the Court next considers in turn.

1. First Cause of Action

In the First Cause of Action, plaintiffs allege that Honda, by failing "to comply with the written and implied warranties" applicable to their vehicles, violated the Magnusson-Moss Warranty Act ("MMWA"). (See FAC ¶ 161; see also FAC ¶ 162-64.) By the instant motion, Honda, in addition to arguing plaintiffs have failed to state a claim for breach of either express or implied warranty, asserts the Court lacks jurisdiction to consider the MMWA claim to the extent it is brought on behalf of the putative class.

The Court first considers the question of jurisdiction.

The MMWA, in 15 U.S.C. § 2310(d), provides: "A consumer who is damaged by the failure of a ... warrantor ... to comply with any obligation ... under a written warranty [or] implied warranty ... may bring suit for damages and other legal and equitable relief – (A) in any court of competent jurisdiction in any State or the District of Columbia; or (B) in an appropriate district court of the United States, subject to paragraph (3) of this subsection." See 15 U.S.C. § 2310(d)(1). The MMWA further provides: "No claim shall be cognizable in a suit brought under paragraph (1)(B) – (A) if the amount in controversy of any individual claim is less than the sum or value of $25; (B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or (C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred." See 15 U.S.C. § 2310(d)(3).

Here, as the number of named plaintiffs is three, and as neither the initial complaint nor the FAC includes facts to support a finding that the amount placed in controversy by the three named plaintiffs is $50,000 more,² the Court finds it lacks federal question jurisdiction over the MMWA claim.³ Indeed, plaintiffs neither alleged in the FAC, nor do they argue in their opposition, that the Court has federal question jurisdiction over the MMWA claim; rather, plaintiffs, citing five district court cases, contend the Court has jurisdiction under the Class Action Fairness Act ("CAFA"). As set forth below, the Court is not persuaded by the authority on which plaintiffs rely.

Under CAFA, a district court has diversity jurisdiction over a class action wherein the parties are minimally diverse and the amount in controversy exceeds $5,000.000. See 28 U.S.C. § 1332(d)(2). The five cited cases, in concluding district courts can exercise CAFA jurisdiction over MMWA claims, contain no independent reasoning for such determination; instead they either cite to Chavis v. Fidelity, 415 F. Supp. 2d 620 (D. S.C. 2006), or other district court cases that have cited to Chavis. See, e.g., Keegan v. American Honda Motor Co., 838 F. Supp. 2d 929, 954-55 (C.D. Cal. 2012).

In Chavis, the district court appears to have held, where a plaintiff initially files in state court an MMWA claim that would not be cognizable if filed in federal court, and the matter is later removed to federal court, the district court can, pursuant to § 2310(d)(1)(A), exercise CAFA jurisdiction over the removed MMWA claim because such district court qualifies as a "court of competent jurisdiction in [a] State." See id. at 623, 626. If such reasoning were adopted, however, § 2310(d)(1)(B) would be rendered a "nullity," a result contrary to "the rule that [a] statute[ ] should not be construed in a manner which robs specific provisions of independent effect." See In re Cervantes, 219 F.3d 955, 961 (9th Cir. 2000). Moreover, as explained by another district court, although CAFA provides "a basis for federal courts to exercise jurisdiction over state law disputes between diverse parties," it does not "fill in the gaps for missing substantive requirements of a federal law." See, e.g., Floyd v. American Honda Motor Co., 2018...