GONZALEZ et al v. MAZDA MOTOR CORPORATION et al

Filing 38

ORDER GRANTING IN PART, DENYING IN PART, AND DEFERRING RULING IN PART ON DEFENDANTS' MOTION TO DISMISS; SETTING SUPPLEMENTAL BRIEFING SCHEDULE. With respect to the claims as to which the Court has deferred ruling, the Court sets the foll owing briefing schedule: No later than January 20, 2017, plaintiffs shall file a supplemental opposition brief, not to exceed 10 pages in length. No later than January 27, 2017, defendants shall file a supplemental reply brief, not to exceed 7 pages in length. As of January 27, 2017, said matters will stand submitted. To the extent leave to amend is granted, any Second Amended Complaint shall be filed no later than two weeks from the date the Court issues an order on the deferred part of Mazda's motion. Signed by Judge Maxine M. Chesney on 01/05/17. (mmclc2, COURT STAFF) (Filed on 1/5/2017)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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IRIS GONZALEZ, ET AL.,
Plaintiffs,

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v.

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MAZDA MOTOR CORPORATION, et al.,
Defendants.

United States District Court
Northern District of California

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Case No. 16-cv-02087-MMC
ORDER GRANTING IN PART,
DENYING IN PART, AND DEFERRING
RULING IN PART ON DEFENDANTS'
MOTION TO DISMISS; SETTING
SUPPLEMENTAL BRIEFING
SCHEDULE

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Before the Court is defendants Mazda Motor Corporation and Mazda Motor of

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America, Inc.’s (collectively, “Mazda”) motion, filed September 23, 2016, by which Mazda

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seeks, under Rule 12(b)(6) of the Federal Rules of Civil Procedure, an order dismissing

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certain of the claims alleged in the First Amended Complaint. Plaintiffs Megan Humphrey

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and Matthew Ochmanek (collectively, “California Plaintiffs”) and plaintiffs Iris Gonzalez,

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Charles Bunch, Anne Stom, David Woodward, Greg Thomason, Lisa Massa, Dan

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Carney, Lorie Bender, Andrew Bauer, Linda Foley, Lou Graziani (collectively, “Non-

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California Plaintiffs”)1 have filed opposition, to which Mazda has replied. The matter

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came on regularly for hearing on December 2, 2016. Bryan L. Clobes and Daniel

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Oswaldo Herrera of Cafferty Clobes Meriwether Sprengel LLP appeared on behalf of

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plaintiffs. Michael Lawrence Mallow of Sidley Austin LLP appeared on behalf of Mazda.

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The Court, having considered the parties’ respective written submissions and the

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arguments of counsel at the hearing, rules as follows.

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//

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The Court hereinafter refers to each plaintiff individually by his or her surname.

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A. First Cause of Action (California Consumer Legal Remedies Act)2

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Mazda moves to dismiss the claims of the Non-California Plaintiffs3 on the ground
such claims “should be governed by the consumer protection laws of the jurisdiction[s] in

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which the transaction[s] took place.” (See Mot. at 4:25-5:5 (quoting Mazza v. Am. Honda

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Co., 666 F.3d 581, 594 (9th Cir. 2012))). In response, plaintiffs contend the resolution of

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such issue at this time would be premature. The Court, for the reasons stated on the

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record at the hearing, finds “this is not a case in which further development of the factual

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record is reasonably likely to materially impact the choice of law determination,” see Cover

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v. Windsor Surry Co., No. 14-CV-05262-WHO, 2016 WL 520991, at *5 (N.D. Cal. Feb. 20,

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2016), and, consequently, finds it appropriate to make such determination at this stage of

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United States District Court
Northern District of California

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the proceedings.4 The sole remaining issue is the whether there are “material differences”

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between California law and the laws of the states in which the transactions took place.

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See Mazza, 666 F.3d at 590. Although plaintiffs confined their opposition to the first of the

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above-referenced two issues, prematurity, given the significance of the second, material

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differences, the Court will afford plaintiffs the opportunity to file supplemental briefing, and

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hereby DEFERS ruling thereon until such briefing is complete.5

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The First, Second, Third, Fourth, and Fourteenth Causes of Action are brought
on behalf of all plaintiffs. The remaining causes of action are brought on behalf of certain
of the plaintiffs as indicated below.
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Mazda has withdrawn its motion to the extent the First Cause of Action is brought
on behalf of Ochmanek, one of the California Plaintiffs (see Reply at 6:20 n.7), and,
accordingly, the Court does not address such claim herein.
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To the extent Mazda moves to dismiss the First, Second, Fifth, Sixth, Seventh,
Eighth, Ninth, Eleventh, and Twelfth Causes of Action on the ground that the allegations
of fraud set forth therein are not pleaded with the particularity required by Rule 9(b) of the
Federal Rules of Civil Procedure, the motion, for the reasons stated on the record at the
hearing, is hereby DENIED.
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Although Mazda argues such additional briefing is unnecessary, pointing out that
the Ninth Circuit in Mazza reviewed an appendix purporting to reflect the differences
between the consumer protection laws of California and 43 other states, see Mazza, 666
F.3d at 591, said appendix was submitted by the defendant therein to the district court,
see Def.’s State Law Variations Appendix in Support of Opp. to Pl.’s Renewed Mot. for
Class Cert., Mazza v. Am. Honda Motor Co., 254 F.R.D. 610 (C.D. Cal. 2008), and there
is no indication its accuracy was challenged.
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B. Second Cause of Action (California Unfair Competition Law)

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Mazda moves to dismiss the claims of the Non-California Plaintiffs on the same

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ground as set forth above with regard to the First Cause of Action. The Court, contrary to

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plaintiffs’ argument, finds a determination thereon is not premature at this stage of the

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proceedings and hereby DEFERS ruling pending supplemental briefing on the remaining

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issue.

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C. Third Cause of Action (California Song-Beverly Act)

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Mazda moves to dismiss the claims of the Non-California Plaintiffs on the ground

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the Song-Beverly Act does not apply extraterritorially, and plaintiffs agree to dismiss
those claims. (See Opp. at 2:10 n.2). Accordingly, as to the Non-California Plaintiffs, the

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United States District Court
Northern District of California

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motion is hereby GRANTED without leave to amend.

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Mazda moves to dismiss plaintiff Ochmanek’s claim on the ground such claim fails

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in light of the one-year durational period of the Song-Beverly Act. See Cal. Civ. Code

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§ 1791.1(c). The Court is not persuaded. See Mexia v. Rinker Boat Co., Inc., 174 Cal.

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App. 4th 1297, 1310 (2009) (noting “[t]here is nothing [in the statute] that suggests a

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requirement that the purchaser discover and report to the seller a latent defect within [the

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one-year] time period”); id. at 1305 (holding “[i]n the case of a latent defect, a product is

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rendered unmerchantable, and the warranty of merchantability is breached, by the

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existence of the unseen defect”); see also Daniel v. Ford Motor Co., 806 F.3d 1217, 1223

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(9th Cir. 2015) (holding ruling in Mexia must be followed, “[a]bsent convincing evidence

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that the California Supreme Court would decide the issue . . . differently”).

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Although, as Mazda points out, the district court’s reasoning in Peterson v. Mazda

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Motor of Am., Inc., 44 F. Supp. 3d 965 (C.D. Cal. 2014) has some persuasive force, see

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id. at 971-72 (holding plaintiff “need not allege that she discovered the . . . defect within

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[the one-year durational period], but there should at least be allegations that symptoms of

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the defect manifested during the warranty period”; observing, “if Mexia were not limited,

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Mexia would render the duration provision of the Song-Beverly Act meaningless because

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every defect that arises could conceivably be tied to an imperfection existing during the
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implied warranty period”) (internal quotation, citation, and alteration omitted), the Court

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notes that Peterson was decided prior to the Ninth Circuit’s decision in Daniel, which, on

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facts similar to those presented here, adds no such limitation. See Daniel, 806 F.3d at

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1221-23 (applying holding in Mexia to claims based on alignment defect resulting in

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premature tire wear outside one-year period).

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Accordingly, as to plaintiff Ochmanek, the motion, for the reasons stated above
and on the record at the hearing, is hereby DENIED.

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D. Fourth Cause of Action (California Secret Warranty Law)

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Mazda moves to dismiss the claims of the Non-California Plaintiffs on the ground
the California Secret Warranty Law does not apply extraterritorially, and plaintiffs agree to

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United States District Court
Northern District of California

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dismiss those claims. (See Opp. at 2:10 n.2). Accordingly, as to the Non-California

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Plaintiffs, the motion is hereby GRANTED without leave to amend.

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To the extent Mazda moves to dismiss the claims of the California Plaintiffs, the

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motion, for the reasons stated on the record at the hearing, is hereby GRANTED with

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leave to amend to allege facts sufficient to plead an adjustment program.

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E. Sixth Cause of Action (Florida Deceptive & Unfair Trade Practices Act)

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The Sixth Cause of Action is brought solely on behalf of plaintiff Woodward.

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Mazda moves to dismiss Woodward’s claim on the ground it lacks the requisite facts

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pertaining to the circumstances under which the vehicle was purchased. The motion is,

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for the reasons stated on the record at the hearing, hereby GRANTED with leave to

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amend to plead such additional factual support.

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F. Ninth Cause of Action (Pennsylvania Unfair Trade Practices and
Consumer Protection Law)
The Ninth Cause of Action is brought solely on behalf of plaintiffs Massa and

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Bauer. Mazda’s motion to dismiss such claims on the ground they are barred by the

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economic loss doctrine, is, for the reasons stated on the record at the hearing, hereby

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DENIED. See Knight v. Springfield Hyundai, 81 A.3d 940, 952 (Pa. Super. Ct. 2013)

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(holding “[t]he economic loss doctrine is inapplicable” to “statutory claims brought
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pursuant to the [Pennsylvania] UTPCPL”).

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G. Tenth Cause of Action (Connecticut Unfair Trade Practices Act)

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The Tenth Cause of Action is brought solely on behalf of plaintiff Carney. Mazda

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moves to dismiss Carney’s claim on the ground the allegations in support thereof are not

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sufficient to plead an adjustment program. The motion is, for the reasons stated on the

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record at the hearing, hereby GRANTED with leave to amend to plead additional facts in

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support thereof.

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H. Twelfth Cause of Action (Ohio Consumer Sales Practices Act)

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The Twelfth Cause of Action is brought solely on behalf of plaintiff Graziani.
Mazda moves to dismiss Graziani’s claim on the ground it is time-barred, and plaintiffs

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United States District Court
Northern District of California

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agree to dismiss the claim. (See Opp. at 2:10 n.2). Accordingly, Mazda’s motion to

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dismiss said claim is hereby GRANTED without leave to amend.

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I. Thirteenth Cause of Action (Breach of Express Warranty)

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The Thirteenth Cause of Action is brought solely on behalf of plaintiffs Gonzalez,

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Bunch, Woodward, Thomason, Massa, Humphrey, Ochmanek, Bauer and Foley. Mazda

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moves to dismiss the claim of plaintiff Woodward on the ground such claim fails to plead

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facts triggering coverage under the warranty, and moves to dismiss the claim of plaintiff

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Bunch on the ground such claim is time-barred absent facts supporting application of the

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future performance exception. The motion is, for the reasons stated on the record at the

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hearing, hereby GRANTED with leave to amend to plead the requisite facts.

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J. Fourteenth Cause of Action (Breach of Implied Warranty)

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Mazda moves to dismiss the claims of plaintiffs Thomason, Carney, Stom, Foley,

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Graziani, Bauer, Bender, Bunch, and Ochmanek on the grounds such claims are time-

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barred and/or fail for lack of privity, and plaintiffs agree to dismiss those claims. (See

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Opp. at 2:10 n.2). Accordingly, as to the above-referenced plaintiffs, the motion is hereby

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GRANTED without leave to amend.

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Mazda moves to dismiss the claim of plaintiff Humphrey on the ground such claim
fails under the California Commercial Code for lack of privity and, in response to plaintiffs’
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argument that the claim falls within an exception for third-party beneficiaries, cites to

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Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008). See id. at 1023-24

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(holding “California courts have painstakingly established the scope of the privity

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requirement under [the] California Commercial Code . . . , and a federal district court

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sitting in diversity is not free to create new exceptions to it”). The Court acknowledges

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district courts have disagreed as to whether California recognizes a third-party

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beneficiary exception to the privity requirement. Compare, e.g., In re MyFord Touch

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Consumer Litigation, 46 F.Supp.3d 936, 984 (N.D. Cal. 2014) (holding “the third-party

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beneficiary exception remains viable under California law”), with Xavier v. Philip Morris

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USA Inc., 787 F.Supp.2d 1075, 1083 (N.D. Cal. 2011) (holding “[n]o reported California

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United States District Court
Northern District of California

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decision has held that the purchaser of a consumer product may dodge the privity rule by

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asserting that he or she is a third-party beneficiary of the distribution agreements linking

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the manufacturer to the retailer who ultimately made the sale”), and Long v. Graco

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Children’s Products Inc., No. 13-cv-01257-WHO, 2013 WL 4655763, at *12 (N.D. Cal.

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Aug. 26, 2013) (holding “district court cases that allegedly allowed a third-party

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beneficiary exception . . . are not binding on the Court whereas Clemens is”). Having

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reviewed the relevant available authority, the Court is persuaded by the reasoning of

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those cases that have declined to extend the list of exceptions to encompass asserted

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third-party beneficiaries. Accordingly, as to Humphrey’s claim, Mazda’s motion is hereby

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GRANTED without leave to amend.

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To the extent Mazda moves to dismiss the claim of plaintiff Woodward, the motion

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is, for the reasons stated on the record at the hearing, hereby GRANTED with leave to

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amend to add facts bearing on the question of privity.

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K. Fifteenth Cause of Action (Breach of Written Warranty under the
Magnuson-Moss Warranty Act)
The Fifteenth Cause of Action is brought solely on behalf of plaintiffs Gonzalez,

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Bunch, Woodward, Thomason, Massa, Humphrey, Ochmanek, Bauer and Foley, and the

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parties are in agreement that the viability of such claims is dependent on the merits of
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plaintiffs’ express warranty claims. Accordingly, to the extent Mazda moves to dismiss

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the claims of plaintiffs Woodward and Bunch, the motion is, for the reasons stated above

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with respect to the Thirteenth Cause of Action, hereby GRANTED with leave to amend.
CONCLUSION

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For the reasons stated,

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as set forth above.
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Plaintiffs, the Court sets the following briefing schedule:
a.

United States District Court
Northern District of California

b.

No later than January 27, 2017, Mazda shall file a supplemental reply

brief, not to exceed 7 pages in length.
c.

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No later than January 20, 2017, plaintiffs shall file a supplemental

opposition brief, not to exceed 10 pages in length.

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With respect to the claims as to which the Court has deferred ruling,

specifically, the First and Second Causes of Action brought by the Non-California

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Mazda’s motion to dismiss is hereby GRANTED in part and DENIED in part

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As of January 27, 2017, said matters will stand submitted.
To the extent leave to amend is granted as set forth above, any Second

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Amended Complaint shall be filed no later than two weeks from the date the Court issues

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an order on the deferred part of Mazda’s motion.

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IT IS SO ORDERED.

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Dated: January 5, 2017
MAXINE M. CHESNEY
United States District Judge

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