Margie Daniel et al v. Ford Motor Company

Filing 176

ORDER re California Consumers Legal Remedies Act ("CLRA"), signed by Senior Judge William B. Shubb on 8/29/2017. (Kirksey Smith, K)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 13 MARGIE DANIEL, individually and on behalf of a class of similarly situated individuals, 14 15 16 17 18 CIV. NO. 2:11-02890 WBS EFB ORDER Plaintiff, v. FORD MOTOR COMPANY, a Delaware corporation, Defendant. 19 20 21 ----oo0oo---Plaintiff Margie Daniel brought this action against 22 defendant Ford Motor Company alleging a defect in the rear 23 suspension geometry in new 2005 through 2011 Ford Focus vehicles. 24 Presently before the court are the parties’ submissions regarding 25 whether the California Consumers Legal Remedies Act (“CLRA”), 26 Cal. Civ. Code §§ 1750-1784, requires proof that the alleged 27 defect created an unreasonable safety risk. 28 1 1 The court recognizes that there is some dispute among 2 the federal district courts and the California Courts of Appeal 3 as to whether the CLRA requires proof of an unreasonable risk of 4 personal injury. 5 No. 15-md-2624-RMW, 2016 WL 6277245, *12-13 (N.D. Cal. Oct. 27, 6 2016) (CLRA fraudulent omission claim need not allege safety 7 issue); Sharma v. BMW of N. Am. LLC, Case No. 13-cv-2274-MMC, 8 2016 WL 4395470, *4-6 (N.D. Cal. Aug. 18, 2016) (plaintiff must 9 show defect caused an unreasonable safety risk); Rutledge v. See, e.g., In re: Lenovo Adware Litig., Case 10 Hewlett-Packard Co., 238 Cal. App. 4th 1164, 1174-76 (6th Dist. 11 2015) (misrepresentation may be material without any showing of 12 an unreasonable safety risk).1 13 However, the Ninth Circuit twice has explained that 14 absent an affirmative misrepresentation, an alleged omission must 15 pose a safety concern to be material. 16 Motor Co., 851 F.3d 1015, 1025-26 (9th Cir. 2017) (affirming 17 dismissal of CLRA fraudulent omission claim based on plaintiffs’ 18 failure to plausibly plead that the alleged defect constituted an 19 unreasonable safety hazard); Wilson v. Hewlett-Packard Co., 668 20 F3d. 1136, 1141-43 (9th Cir. 2012) (district court did not err in 21 requiring plaintiffs to allege that a design defect caused an 22 unreasonable safety hazard). See Williams v. Yamaha The Williams court explained that 23 24 25 26 27 28 1 In resolving defendant’s renewed motion for summary judgment, this court noted plaintiff’s argument that a fraudulent omission claim no longer requires that the defect be related to a safety concern. However, in ruling on the motion the court did not have to decide that issue because plaintiff had established a genuine issue of material fact as to whether the alleged defect here involved a safety concern. (Docket No. 107 at 6 n.1.) 2 1 to state a claim for failure to disclose a design defect, a party 2 must allege, among other things, “the existence of an 3 unreasonable safety hazard,” 851 F.3d at 1025-26 (citations 4 omitted), citing its past decision in Wilson, 668 F.3d at 1142- 5 43. 6 Notably, the Ninth Circuit issued its decision in 7 Williams more than two years after the California Court of 8 Appeal’s decision in Rutledge, 238 Cal. App. 4th 1164. 9 the Wilson court, in holding that an unreasonable risk of injury Further, 10 was required, interpreted two other decisions by the California 11 Court of Appeal in Daugherty v. American Honda Motor Co., 144 12 Cal. App. 4th 824, 836 (2d. Dist. 2006), and Bardin v. 13 DaimlerChrysler Corp., 136 Cal. App. 4th 1255, 1270 (4th Dist. 14 2006). 15 Supreme Court on this issue. 16 There is no clear pronouncement from the California This court is bound by the Ninth Circuit’s 17 interpretation of California law, absent a contrary ruling by the 18 California Supreme Court. 19 06-1150 WBS GG, 2007 WL 1723617, at *3 (E.D. Cal. June 11, 2007) 20 (noting that the Ninth Circuit had predicted how the California 21 Supreme Court would rule on an issue, and “barring a clear 22 holding to the contrary by California's highest court, it is not 23 this court’s prerogative to second guess that conclusion,” 24 notwithstanding a conflicting California Court of Appeal 25 decision) (citing Dimidowich v. Bell & Howell, 803 F.2d 1473, 26 1482 (9th Cir. 1986)); see also Sharma, 2016 WL 4395470, at *5 27 (district court held it was bound by Wilson’s requirement of an 28 unreasonable safety risk notwithstanding Rutledge). See, e.g., Johnson v. Barlow, Civ. No. 3 Thus, this 1 court continues to be bound by the Ninth Circuit’s interpretation 2 of the CLRA, notwithstanding any decisions by the California 3 Courts of Appeal which may disagree with this interpretation.2 4 The court recognizes that ordinarily it “must follow 5 the decision of the intermediate appellate courts of the state 6 unless there is convincing evidence that the highest court of the 7 state would decide differently.” 8 1083 (9th Cir. 2002). 9 cited by plaintiff hold that a district court is free to See In re Watts, 298 F.3d 1077, However, neither Watts nor any other cases 10 disregard Ninth Circuit precedent in light of an intervening 11 decision by a state intermediate court where the Ninth Circuit 12 essentially reaffirms its prior holding after the intervening 13 state court decision. 14 Because the Ninth Circuit has ruled twice already, 15 including this year, that a fraudulent omission claim under the 16 CLRA requires that the alleged defect posed an unreasonable 17 safety risk, the court will instruct the jury on this 18 requirement. 19 20 IT IS SO ORDERED. Dated: August 29, 2017 21 22 23 24 25 26 27 28 2 In this regard, the court disagrees with Judge Whyte’s decision in In re: Lenovo, 2016 WL 6277245, at *13 (holding that plaintiff need not allege a safety concern because Wilson was no longer binding in light of the Sixth District Court of Appeal’s opinion in Rutledge). 4

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