Colleen Davison v. Kia Motors America, Inc

Filing 27

ORDER by Judge Cormac J. Carney: granting 19 MOTION to Dismiss Case. Plaintiff shall have twenty-one (21) days to file an amended complaintconsistent with this Order. (twdb)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

CENTRAL DISTRICT OF CALIFORNIA

10

SOUTHERN DIVISION

11
12
13
14
15
16
17
18
19
20
21

)
COLLEEN DAVISON, individually and ) Case No.: SACV 15-00239-CJC(RNBx)
)
on behalf of all others similarly situated, )
)
)
Plaintiff,
)
) ORDER GRANTING DEFENDANT’S
v.
) MOTION TO DISMISS
)
)
KIA MOTORS AMERICA, INC.,
)
)
)
Defendant.
)
)
)
)
)
)

22
23

I. INTRODUCTION & BACKGROUND

24
25

Plaintiff Colleen Davison (“Plaintiff”), on behalf of herself and all others similarly

26

situated, brings this consumer protection class action against Defendant Kia Motors

27

America, Inc. (“Kia”). According to the First Amended Complaint (“FAC”), Kia, a

28

California company, sells automobiles through Kia-authorized dealers in the United
-1-

1

States. (Dkt. No. 15 [FAC] ¶ 7.) Plaintiff is a Washington resident who bought a 2003

2

Kia Optima (“Optima”) from a Kia dealership in 2003. (Id. ¶¶ 3, 7.) Around June 2013,

3

Plaintiff began experiencing difficulty with the door-locking system for the front doors of

4

her Optima. (Id. ¶ 21.) The FAC alleges that when Plaintiff would try to use her remote

5

key device to open the doors, the doors would lock, requiring manual unlocking. (Id.

6

¶ 21.) Plaintiff further alleges that due to the defect, she was unable to unlock certain

7

doors from inside her vehicle and, on several occasions, Plaintiff had to exit using the

8

rear passenger doors. (Id.) Over time, Plaintiff alleges that unlocking the doors on her

9

Optima became increasingly more difficult and by September 2013, Plaintiff was unable

10

to unlock her front doors by any method. (Id.) Plaintiff contends that the Optima’s door

11

locking system poses “an unreasonable safety risk during normal driving operation,

12

preventing vehicle egress if the car is involved in an accident or other event that requires

13

quick exit from the motor vehicle.” (Id. ¶ 1.)

14

Plaintiff asserts that Kia knew about and should have disclosed the potential door-

15
16

locking defects when Plaintiff purchased her Optima in 2003. Plaintiff further asserts

17

that Kia should have recalled and repaired the locks, offered a replacement, or

18

reimbursed its customers who paid for repairs. (Id. ¶ 27.) Based on these allegations,

19

Plaintiff brings this action on behalf of herself and all owners of Kia Optima automobiles,

20

model years 2001–2006, within the United States. (Id. ¶ 42.) Plaintiff asserts two causes

21

of action, alleging that Kia violated the California Consumers Legal Remedies Act

22

(“CLRA”), Cal. Civ. Code § 1750 et seq., and California’s Unfair Competition Law

23

(“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. (See FAC.) Before the Court is Kia’s

24

motion to dismiss or, in the alternative, to strike portions of the FAC.1 (Dkt. No. 19

25

[“Def.’s Mot.”].) For the following reasons, Kia’s motion to dismiss is GRANTED. 2

26
27
28

1

Kia’s alternative motion seeks to strike all of Plaintiff’s nationwide class claims under the UCL and
CLRA, in addition to Plaintiff’s request for restitution and injunctive relief. (Def.’s Mot. at 19–24.)
-2-

1

II. LEGAL STANDARD

2

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal

3
4

sufficiency of the claims asserted in the complaint. In considering whether to dismiss a

5

case for failure to state a claim, the issue before the court is not whether the claimant will

6

ultimately prevail, but whether the claimant is entitled to offer evidence to support the

7

claims asserted. Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997). When

8

evaluating a Rule 12(b)(6) motion, the district court must accept all material allegations

9

in the complaint as true and construe them in the light most favorable to the non-moving

10

party. Moyo v. Gomez, 32 F.3d 1382, 1384 (9th Cir. 1994). Rule 12(b)(6) is read in

11

conjunction with Rule 8(a), which requires only a short and plain statement of the claim

12

showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2). Dismissal of a

13

complaint for failure to state a claim is not proper where a plaintiff has alleged “enough

14

facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,

15

550 U.S. 544, 570 (2007). Although the district court should grant the plaintiff leave to

16

amend if the claim can possibly be cured by additional factual allegations, Doe v. United

17

States, 58 F.3d 494, 497 (9th Cir. 1995), the district court need not grant leave to amend

18

if amendment would be futile, see Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1051–52

19

(9th Cir. 2008) (finding that amendment would be futile where plaintiff was granted leave

20

to amend once and the amended complaint contained the same defects as the prior

21

complaint).

22
23

//

24

//

25
26
27
28

Kia’s alternative motion with regard to the nationwide class claims, though stylized as a motion to
strike, seeks to essentially dismiss these claims. The Court therefore treats this portion of Kia’s motion
to strike as a motion to dismiss.
2

Consequently, Kia’s alternative motion to strike Plaintiff’s request for restitution and injunctive relief
is DENIED AS MOOT.
-3-

1

III. ANALYSIS

2

A.

3

Nationwide Class Claims

4

Kia argues that both of Plaintiff’s nationwide class claims under the UCL and

5
6

CLRA should be dismissed pursuant to Mazza v. American Honda Motor Co., 666 F.3d

7

581 (9th Cir. 2012). When a federal court is sitting in diversity, it “must look to the

8

forum state’s choice of law rules to determine the controlling substantive law.” Mazza,

9

666 F.3d at 594. California law may only be used on a class-wide basis if “the interests

10

of other states are not found to outweigh California’s interest in having its law applied.”

11

Wash. Mut. Bank v. Superior Court, 24 Cal. 4th 906, 921 (2001). To determine whether

12

those interests outweigh California’s interest, a court must apply a three-step government

13

interest test in which (1) “the court determines whether the relevant law of each of the

14

potentially affected jurisdictions with regard to the particular issue in question is the same

15

or different”; (2) “if there is a difference, the court examines each jurisdiction’s interest

16

in the application of its own law under the circumstances of the particular case to

17

determine whether a true conflict exists”; and (3) “if the court finds that there is a true

18

conflict, it carefully evaluates and compares the nature and strength of the interest of each

19

jurisdiction in the application of its own law to determine which state’s interest would be

20

more impaired if its policy were subordinated to the policy of the other state, and then

21

ultimately applies the law of the state whose interest would be more impaired if its law

22

were not applied.” Mazza, 666 F.3d at 590 (internal citation omitted).

23

While Mazza was decided at the class certification stage, “the principle articulated

24
25

in Mazza applies generally and is instructive even when addressing a motion to dismiss.”3

26
27
28

3

Contrary to Plaintiff’s contentions, many courts have decided against deferring the choice of law
decision until discovery or class certification where, as here, the material differences are sufficiently
obvious from the pleadings.
-4-

1

Frezza v. Google Inc., No. 12-cv-00237-RMW, 2013 WL 1736788, at *6 (N.D. Cal. Apr.

2

22, 2013); see also Frenzel v. AliphCom, --- F. Supp. 3d --- , No. 14-cv-03587-WHO,

3

2014 WL 7387150, at *5 (N.D. Cal. Dec. 29, 2014). Applying California’s choice-of-law

4

principles to the facts of this case, the Court finds that Plaintiff’s UCL and CLRA claims

5

cannot be brought on behalf of a nationwide class.

6
7

1. Conflict of Laws

8
9

Kia argues that California’s consumer protection statutes, such as the UCL and

10

CLRA, materially differ from the consumer protection laws in other states. A conflict of

11

law problem arises only if the differences in state law are material. Mazza, 666 F.3d at

12

590–91. Courts in this circuit, in assessing the propriety of nationwide class actions,

13

have held that California’s consumer protection statutes are materially different from

14

those in other states. See, e.g., Mazza, 666 F.3d at 591; Frenzel, 2014 WL 7387150, at

15

*4; Frezza, 2013 WL 1736788, at *6; Gianino v. Alacer Corp., 846 F. Supp. 2d 1096

16

(C.D. Cal. 2012); Waller v. Hewlett-Packard Co., No. 11cv0454–LAB, 2012 WL

17

1987397, at *1 (S.D. Cal. June 4, 2012); In re Hitachi Television Optical Block Cases,

18

No. 08cv1746, 2011 WL 9403, at *6 (S.D. Cal. Jan. 3, 2011) (“[T]here are material

19

conflicts between California’s consumer protection laws and the consumer protection

20

laws of the other forty-nine states.”). For example, the California laws at issue here have

21

no scienter requirement, while many other states’ consumer protection statutes require

22

scienter. Mazza, 666 F.3d at 591; Gianino, 846 F. Supp. 2d at 1100–01. Some states,

23

like California, include a reliance requirement in their consumer protection laws, while

24

others do not. Mazza, 666 F.3d at 591; Gianino, 846 F. Supp. 2d at 1100–01.

25

Furthermore, the statutes of limitations for consumer protection laws vary among the

26

states from one to ten years. Gianino, 846 F. Supp. 2d at 1100–01. In addition, there are

27

material variations in the remedies available under states’ consumer protection laws. Id.

28

(identifying differences with regard to the available remedies in various states). In view
-5-

1

of such differences, the Ninth Circuit has explained that, under California’s choice of law

2

rules, “each class member’s consumer protection claim should be governed by the

3

consumer protection laws of the jurisdiction in which the transaction took place.” Mazza,

4

666 F.3d at 594. These differences in consumer protection law among states are not

5

trivial because they involve essential requirements to establish a claim, types of relief and

6

remedies available to a plaintiff, and other dispositive issues. Because the conflicts in the

7

laws of the states are material, the Court moves to the test’s second step.

8

2. Interest of Foreign Jurisdictions

9
10

The second step of the Mazza analysis also favors dismissal of Plaintiff’s

11
12

nationwide consumer protection claims. “[E]very state has an interest in having its law

13

applied to its resident claimants.” Mazza, 666 F.3d at 591–92 (internal citation omitted).

14

In fact, California law recognizes that “a jurisdiction ordinarily has ‘the predominant

15

interest’ in regulating conduct that occurs within its borders.” Id. It is the principle of

16

federalism that permits each state to carefully balance its duty to protect its consumers

17

from injuries caused by out-of-state-business with its duty to shield those businesses from

18

what the state may consider excessive regulation or litigation. Id. (“Each state has an

19

interest in setting the appropriate level of liability for companies conducting business

20

within its territory.”). This case clearly implicates each state’s interest, as the consumer

21

protection and fraud law of every state is important. Plaintiff’s nationwide class

22

presumably consists of members from 50 states. These states obviously have an interest

23

in having their own laws applied to the consumer transactions that took place within their

24

borders.

25
26

//

27

//

28

//
-6-

1

3. Which State Interest Is Most Impaired

2
3

The final step of California’s governmental interest test is designed to

4

accommodate conflicting state policies. McCann v. Foster Wheeler LLC, 48 Cal. 4th 68,

5

97 (2010). This step is not intended to weigh the conflicting state interests to determine

6

which conflicting state law manifests the “better” or “worthier” social policy. Mazza,

7

666 F.3d at 593. But the Court must recognize the importance of federalism and every

8

state’s right to protect its consumers and promote those businesses within its borders. Id.

9

California has a significant interest here in applying its laws to the consumers’

10

transactions that took place within its borders. In addition, California has an interest in

11

regulating Kia as Kia’s corporate office is located in California. However, by virtue of

12

bringing a nationwide class action, Plaintiff’s claim encompasses class members who

13

reside and have purchased their vehicles outside of California. California’s interest in

14

applying its law with respect to those members is much more attenuated. See Edgar v.

15

MITE Corp., 457 U.S. 624, 644 (1982) (“While protecting local investors is plainly a

16

legitimate state objective, the State has no legitimate interest in protecting nonresident

17

shareholders.”); McCann, 48 Cal. 4th at 94 n.12 (finding that California considers the

18

geographic location of the omission or where the misrepresentations were communicated

19

to the consumer as the place of the wrong).

20
21

Here, Plaintiff, as the class representative, does not allege that she purchased her

22

Optima or was wronged in California. See Mazza, 666 F.3d at 593–94 (“[T]he last events

23

necessary for liability as to the foreign class members—communication of the

24

advertisements to the claimants and their reliance thereon in purchasing vehicles—took

25

place in the various foreign states, not California.”). Plaintiff’s home state of Washington

26

and other states have a compelling interest in protecting their consumers from in-state

27

injuries caused by a California corporation doing business within their borders and in

28

delineating the scope of recovery for the consumers under their own laws. Therefore, the
-7-

1

Court concludes that every state would be impaired in its ability to protect the consumers

2

within its borders if California law were applied to all claims of the nationwide class.

3

Under the government interest test, each putative class member’s claims here must be

4

governed by and decided under the law of the state in which the injury took place. The

5

Court therefore DISMISSES WITH PREJUDICE Plaintiff’s UCL and CLRA nationwide

6

class claims.

7
8

B.

Individual Claims

9
10

Plaintiff’s individual claims under the UCL and CLRA are DISMISSED WITH

11

LEAVE TO AMEND. Plaintiff’s fraud-based claims under these statutes are deficient

12

because the claims do not allege facts demonstrating that (1) Plaintiff reviewed any of

13

Kia’s advertisements or promotional materials that might have contained a disclosure of

14

the alleged door-locking defect, see Ehrlich v. BMW of N. Am., LLC, 801 F. Supp. 2d

15

908, 919–20 (C.D. Cal. 2010) (dismissing the plaintiff’s UCL and CLRA claims because

16

his complaint was devoid of any allegations that he would have plausibly been aware of

17

the car’s defect prior to purchase had the defendant publicized the information), and

18

(2) Kia had prior knowledge of the alleged defect, see Oestreicher v. Alienware Corp.,

19

544 F. Supp. 2d 964, 974 n.9 (N.D. Cal. 2008) (“Random anecdotal examples of

20

disgruntled customers posting their views on websites at an unknown time is not enough

21

to impute knowledge upon defendants.”).

22
23

Plaintiff’s remaining claims under the UCL also fail. Her claim under the

24

“unlawful” prong fails as it is premised on her deficient claim for fraud under the CLRA.

25

Plaintiff’s claim under the “unfair” prong of the UCL also fails, as Plaintiff does not

26

sufficiently allege how her injury of repairing her door locks was substantial years after

27

her warranty had lapsed. See Daugherty v. Am. Honda Motor Co., Inc., 144 Cal. App.

28

4th 824, 839 (2006) (finding that the cost of repairing a defective automobile part after
-8-

1

the warranty expires cannot be a substantial injury because the consumer has no

2

reasonable expectation that the product will function precisely as warranted); see also

3

Clemens v. DaimlerChrysler Corp., 534 F.3d 1017,1026–27 (9th Cir. 2008) (citing

4

Daugherty, 144 Cal. App. 4th at 839).

5
6

IV. CONCLUSION

7
8
9

Accordingly, Kia’s motion to dismiss is GRANTED. Plaintiff’s nationwide class
claims under the UCL and CLRA are DISMISSED WITH PREJUDICE. Plaintiff’s

10

individual claims under the UCL and CLRA are DISMISSED WITH LEAVE TO

11

AMEND. Plaintiff shall have twenty-one (21) days to file an amended complaint

12

consistent with this Order.

13
14
15
16
17
18
19

DATED:

June 29, 2015
__________________________________
CORMAC J. CARNEY

20
21

UNITED STATES DISTRICT JUDGE

22
23
24
25
26
27
28
-9-