Papasan et al v. Dometic Corporation et al

Filing 85

ORDER by Judge Haywood S. Gilliam, Jr. GRANTING IN PART AND DENYING IN PART DEFENDANTS 47 MOTION TO DIMISS. Amended Pleadings due by 11/24/2017. (ndrS, COURT STAFF) (Filed on 10/27/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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CATHERINE PAPASAN, et al.,
Plaintiffs,

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v.

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DOMETIC CORPORATION,

ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANT’S
MOTION TO DIMISS
Re: Dkt. No. 47

Defendant.

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United States District Court
Northern District of California

Case No. 16-cv-02117-HSG

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The named plaintiffs—Catherine Papasan, Nelson Goehle, Andrew Young, Christopher

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Johnston, Jimmy Byers, and Richard and Leah Vollberg (collectively, “Plaintiffs”) —filed their

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first amended class action complaint on July 8, 2016. Dkt. No. 38 (“FAC”). On August 19, 2016,

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Defendant Dometic Corporation (“Dometic”) filed the pending motion to dismiss. Dkt. No. 47

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(“Mot.”). Plaintiffs opposed the motion, Dkt. No. 50 (“Opp.”), and Dometic replied, Dkt. No. 62

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(“Reply”). The Court heard argument regarding the motion on November 17, 2016. Dkt. No. 58

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(“Hr’g Tr.”). For the reasons set forth below, the Court GRANTS IN PART and DENIES IN

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PART Dometic’s motion to dismiss.

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I.

BACKGROUND1

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A.

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Dometic is an American appliance manufacturer that caters to automotive and mobile

Dometic

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home markets in Washington, California, Ohio, Texas, Florida, and throughout the United States.

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FAC ¶ 112. Among other products, Dometic manufactures refrigerators intended for use in

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recreational vehicles and boats. Id. ¶ 116. The majority of Dometic refrigerator models, including

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Given that the FAC is 119 pages long, this background section does not comprehensively
describe the allegations. The remainder of the opinion states additional facts as relevant to the
analysis.

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those at issue here, employ “gas absorption” cooling units, which pressurize, condense, and re-

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vaporize ammonia gas to produce a refrigeration effect. Id. ¶ 117. This process involves extreme

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heating and cooling cycles, achieved through a combination of chemical coolant and propane or

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electric heat sources. Id. ¶¶ 121–23.
Dometic’s Allegedly Defective Refrigerators

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B.

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Plaintiffs allege that Dometic has designed, manufactured, assembled, sold, and otherwise

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placed into the stream of commerce a variety of dangerously defective refrigerator models since at

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least 1997. Id. ¶ 119. The refrigerators’ gas absorption cooling units allegedly share a common

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structural flaw which, over the course of normal use, causes them to leak pressurized gas and
create an “unreasonable risk of fire and explosion.” Id. ¶¶ 120, 124. Due to the flammable

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United States District Court
Northern District of California

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chemicals contained in Dometic’s cooling units, this risk allegedly remains high even when the

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refrigerator is off. Id. ¶ 127.

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Plaintiffs name seventeen Dometic refrigerator models that use the allegedly defective

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cooling unit described above. Id. ¶ 119. Collectively, these and other unnamed models have

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allegedly caused “thousands of fires since 1997, and continue to cause new fires at an alarming

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rate.” Id. ¶ 133 (emphasis in original). Plaintiffs each purchased an RV equipped with an

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allegedly defective refrigerator between March 2005 and April 2012. Id. ¶¶ 12, 30, 46, 63, 79, 96.

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Allegations regarding each of the plaintiffs are detailed below.

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i.

Plaintiff Catherine Papasan (California)

Catherine Papasan has at all relevant times been a resident of California. Id. ¶ 12. In

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2005, she purchased a model year 2006 RV equipped with a Dometic DM2652 gas absorption

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refrigerator. Id. Papasan used the refrigerator for its intended purpose and followed all relevant

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instructions from Dometic. Id. ¶ 20. To date, Papasan’s refrigerator has not malfunctioned. See

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id. ¶ 28.

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ii.

Plaintiff Nelson Goehle (Washington)

Nelson Goehle has at all relevant times been a resident of Washington. Id. ¶ 30. In June

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2005, he purchased a model year 2000 RV equipped with a Dometic RM2652 gas absorption

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refrigerator. Id. Goehle used the refrigerator as intended and followed all applicable instructions
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from Dometic. Id. ¶ 36. On March 27, 2016, Goehle saw a fire erupt from his RV’s refrigerator

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vent while the vehicle was parked outside his home. Id. ¶ 37. The fire completely destroyed his

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RV and caused damage to his house and surrounding property. Id.

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iii.

Plaintiff Andrew Young (Ohio)

Andrew Young has at all relevant times been a resident of Ohio. Id. ¶ 46. In 2009, he

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purchased a model year 2002 RV equipped with a Dometic DM2852 gas absorption refrigerator.

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Id. At all times, he used the appliance as intended and followed Dometic’s instructions on proper

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use and maintenance. Id. ¶ 49. On August 16, 2015, Young’s refrigerator ignited a fire that

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completely destroyed his RV and damaged his surrounding property. Id. ¶ 53.

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United States District Court
Northern District of California

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iv.

Plaintiff Jimmy Byers (Texas)

Jimmy Byers has at all relevant times been a resident of Texas. Id. ¶ 63. In April 2012, he

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purchased a model year 2011 RV equipped with a Dometic RM1350 gas absorption refrigerator.

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Id. He used the appliance as intended and complied with all applicable instructions from Dometic.

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Id. ¶ 69. In November 2014, Byers’s refrigerator stopped working and he had it replaced with a

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Dometic model CU 949E gas absorption refrigerator. Id. The repair shop informed him that his

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previous model had failed due to a leak at the boiler tube, which is part of the cooling unit. Id. ¶¶

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69, 121.

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v.

Plaintiff Christopher Johnston (Texas)

Christopher Johnston has at all relevant times been a resident of Texas. Id. ¶ 79. In April

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2008, he purchased a model year 2008 RV equipped with a “2-door Dometic gas absorption”

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refrigerator. Id. Johnston used the appliance as intended at all times and followed Dometic’s

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instructions regarding use and maintenance. Id. ¶ 84. On March 1, 2016, Johnston’s refrigerator

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ignited a fire while Johnston’s RV was parked on his property. Id. ¶ 85. Johnston’s neighbor

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witnessed flames emanating from the center of the RV, where the refrigerator was located. Id.

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The fire completely destroyed Johnston’s RV and damaged his adjacent property. Id.

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vi.

Plaintiffs Richard and Leah Vollberg (Florida)

Richard and Leah Vollberg have at all relevant times been residents of Florida. Id. ¶ 96.
In 2009, they purchased a model year 2005 RV equipped with a Dometic DM2862 gas absorption
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refrigerator. Id. At all times, they followed instructions from Dometic regarding the proper use

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and maintenance of the refrigerator. Id. ¶ 99. On March 20, 2012, the refrigerator caught fire

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without warning, severely damaging the Vollbergs’ RV. Id. ¶ 100. The Vollbergs witnessed the

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event. Id. As a result of the fire, they were unable to use their RV for approximately four weeks,

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incurred “thousands of dollars” of damage, and suffered a “significant” loss in the resale value of

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their RV. Id. ¶ 102.
Dometic’s Alleged Knowledge of Defects

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C.

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Dometic allegedly has had “actual knowledge” of the defects inherent in its gas absorption

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refrigerator models for at least 15 years. Id. ¶ 146. Since at least 1999, Dometic has maintained
databases that track the real-world performance of its refrigerators, “including fire claims and

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United States District Court
Northern District of California

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warranty claims.” Id. Dometic has also defended itself against lawsuits arising from fires

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allegedly caused by its gas absorption refrigerator models. Id. As a function of that litigation,

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Dometic has had access to “expert reports from independent fire investigators and engineers,”

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which allegedly document the structural flaws in its products. Id.

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Despite its access to such information, Dometic has never stopped “placing its dangerously

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defective refrigerators into the stream of commerce [or] paused production and sales so that the

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refrigerators could be modified to operate safely.” Id. ¶ 147. In addition, Dometic allegedly

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employs field testing procedures that fail to adequately simulate the conditions under which its gas

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absorption refrigerators operate. Id. ¶ 149. It allegedly uses the results of those tests to affirm that

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its product designs are sound, notwithstanding reports to the contrary. Id.
Dometic’s Product Recalls

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D.

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Dometic recalled select models of its gas absorption refrigerators on two occasions. Id.

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¶ 134. In 2006, it recalled ten two-door refrigerator models for retrofitting, including model

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RM2652, which was purchased by Plaintiffs Goehle and Papasan. See id. ¶ 135. In 2008, it

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recalled nine of the same models for an identical modification. Id. ¶ 137. Together, the recalls

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involved over 1.67 million refrigerators. Id. ¶¶ 135, 137. Dometic claimed that its retrofit

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campaign was designed to reinforce the thermal components of its cooling units, which were

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overly susceptible to fatigue. Id. ¶¶ 136–37. However, the new hardware installed by Dometic
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allegedly “did not address, much less eliminate, the root cause of the [component’s] failures.” Id.

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¶ 142. In lieu of further recalls, Dometic made preemptive changes to all gas absorption cooling

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units manufactured after June 2006. Id. ¶¶ 141–42. Dometic has never expanded the recalls to

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include any gas absorption refrigerators manufactured after September 30, 2006, despite such

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refrigerators allegedly containing the same design defects as those manufactured previously. Id. ¶

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138.
Dometic’s Alleged Non-Disclosure of Product Defects

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E.

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Plaintiffs contend that Dometic actively concealed, or at the very least, failed to disclose

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the safety risk associated with its gas absorption refrigerator models. See id. ¶¶ 18, 34, 51, 66, 82,
104. Dometic’s point-of-sale materials, manuals, and warranties failed to notify consumers that

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United States District Court
Northern District of California

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the refrigerators posed a risk of “fire, injury, or death,” or that Dometic had attempted to mitigate

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the risk by installing additional hardware. Id. Additionally, all vehicles equipped with Dometic

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gas absorption refrigerators prominently displayed a Recreational Vehicle Industry Association

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(“RVIA”) sticker, which certified fire safety. Id. ¶¶ 15–17. Plaintiffs allegedly relied on this

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affirmative representation of safety when they decided to purchase their respective RVs. Id. ¶¶ 17,

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33, 50, 65, 81, 98. Notwithstanding the ability to identify and contact purchasers of its products,

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Dometic never provided Plaintiffs with post-sale warnings or product recall alerts. Id. ¶¶ 24, 41,

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57, 73, 89, 106. Accordingly, Plaintiffs allegedly did not learn that their refrigerators had serious

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safety-related defects until several years after purchase: Goehle, Young, Johnston, Byers, and the

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Vollbergs allegedly discovered the dangers associated with their respective refrigerators when the

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appliances malfunctioned, id. ¶¶ 42, 58, 74, 90, 107, whereas Papasan allegedly discovered the

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safety risk in August 2015, id. ¶ 25. Papasan does not allege what facts put her on notice. Id.
Dometic’s Allegedly Safer Alternative

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F.

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Dometic allegedly possesses a safer alternative to the gas absorption technology that they

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use in their refrigerators. Id. ¶ 157. In 2014, Dometic acquired Atwood Mobile Products LLC

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(“Atwood”), an appliance manufacturer that had been marketing and selling helium-based

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refrigerators since approximately 2001. Id. ¶ 156. Unlike hydrogen, helium is “an inert gas that is

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not flammable.” Id. ¶ 157. Thus, helium-based cooling systems allegedly do not carry the
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inherent risk of fire that hydrogen systems do. Id.

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G.

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The original class action complaint was filed on April 21, 2016. Dkt. No. 1. Dometic filed

Procedural History

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a motion to dismiss on June 17, 2016. Dkt. No. 30. Rather than oppose the motion, Plaintiffs

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amended the complaint, and Dometic now moves to dismiss. On behalf of a nationwide class,

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Plaintiffs assert a claim for violation of the Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C.

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§ 2301, et seq. FAC ¶ 204–18. In addition, Plaintiffs assert state law claims on behalf of the

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California, Washington, Ohio, Texas, and Florida subclasses, as detailed below. Id. ¶¶ 219–524.

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California Claims

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United States District Court
Northern District of California

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Papasan

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Applicable Statutes

Violation of the Song-Beverly Consumer Warranty Act
for Breach of Implied Warranty of Merchantability
Violation of the California Unfair Competition Law
Breach of Implied Warranty of Merchantability
Breach of Contract / Common Law Warranty
Violation of the Consumer Legal Remedies Act
Violation of California False Advertising Law
Unjust Enrichment
Negligence

Washington Claims
Goehle

Young

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Violation of Ohio Consumer Sales Practices Act
(“OCSPA”)
Breach of Implied Warranty of Merchantability
Unjust Enrichment
Negligence
Strict Products Liability

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Ohio Claims

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Byers
Johnston

Vollbergs

Violation of Florida Unfair & Deceptive Trade Practices
Act
Fraud by Concealment
Breach of Implied Warranty of Merchantability
Unjust Enrichment

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Florida Claims

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Wash. Rev. Code §§ 19.86.010, et seq.
Wash. Rev. Code §§ 7.72.010, et seq.

Ohio Rev. Code §§ 1345.01, et. seq.
Ohio Rev. Code § 1302.27 (U.C.C. § 2-314)

Ohio Rev. Code §§ 2307.71–2307.801

Applicable Statutes

Violation of Texas Deceptive Trade Practices Act
(“DTPA”)
Breach of Implied Warranty of Merchantability
Fraud by Concealment
Strict Products Liability
Unjust Enrichment
Negligence

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Cal. Civ. Code §§ 1750, et seq.
Cal. Bus. & Prof. Code §§ 17500, et seq.

Applicable Statutes

Texas Claims

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Cal. Bus. & Prof. Code §§ 17200, et seq.
Cal Com. Code § 2314

Applicable Statutes

Violation of Washington Consumer Protection Act
(“Washington CPA”)
Strict Products Liability
Unjust Enrichment
Negligence

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Cal. Civ. Code §§ 1791.1, 1792

Tex. Bus. & Com. Code §§ 17.41, et seq.
Tex. Bus. & Com. Code § 2.314
Tex. Civ. Prac. & Rem. Code § 82.001, et seq.

Applicable Statutes

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Fla. Stat. §§ 501.201, et seq.

Fla. Stat. § 672.314

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II.

LEGAL STANDARD
A.

Motion to Dismiss for Lack of Subject Matter Jurisdiction

“[L]ack of Article III standing requires dismissal for lack of subject matter jurisdiction

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under Federal Rule of Civil Procedure 12(b)(1).” Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th
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Cir. 2011). When presented with a jurisdictional attack, the plaintiff has the burden of proving
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subject matter jurisdiction. See In re Wilshire Courtyard, 729 F.3d 1279, 1284 (9th Cir. 2013)
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(“The burden of establishing subject matter jurisdiction rests on the party asserting that the court

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has jurisdiction.”) A jurisdictional attack under Rule 12(b)(1) may be facial or factual. Safe Air
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for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “In a facial attack, the challenger

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asserts that the allegations contained in a complaint are insufficient on their face to invoke federal
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United States District Court
Northern District of California

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jurisdiction.” Id. at 1039. “The district court resolves a facial attack as it would a motion to
dismiss under Rule 12(b)(6): Accepting the plaintiff’s allegations as true and drawing all
reasonable inferences in the plaintiff’s favor, the court determines whether the allegations are
sufficient as a legal matter to invoke the court’s jurisdiction.” Leite v. Crane Co., 749 F.3d 1117,
1121 (9th Cir. 2014). In contrast, a factual attack “contests the truth of the plaintiff’s factual
allegations, usually by introducing evidence outside the pleadings.” Id. at 1121. When faced with
a factual attack, the plaintiff is required to “support her jurisdictional allegations with competent

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proof under the same evidentiary standard that governs in the summary judgment context. The
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plaintiff bears the burden of proving by a preponderance of the evidence that each of the
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requirements for subject matter jurisdiction has been met.” Id. at 1121 (quotation marks and
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citations omitted). Where jurisdiction turns on disputed factual issues, the district court may
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resolve those differences itself, unless the issue of subject matter jurisdiction is “intertwined” with

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the merits of the claims. Id. at 1121–22 & n.3.
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B.

Motion to Dismiss for Failure to State a Claim

Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain
statement of the claim showing that the pleader is entitled to relief[.]” A defendant may move to

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dismiss a complaint for failing to state a claim upon which relief can be granted under Federal
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Rule of Civil Procedure 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the

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complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.”

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Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule

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12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on

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its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible

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when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that

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the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

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In reviewing the plausibility of a complaint, courts “accept factual allegations in the

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complaint as true and construe the pleadings in the light most favorable to the nonmoving party.”

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Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nonetheless,
courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of

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United States District Court
Northern District of California

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fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir.

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2008). And even where facts are accepted as true, “a plaintiff may plead [him]self out of court” if

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he “plead[s] facts which establish that he cannot prevail on his . . . claim.” Weisbuch v. County of

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Los Angeles, 119 F.3d 778, 783 n.1 (9th Cir. 1997) (quotation marks and citation omitted).

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C.

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Federal Rule of Civil Procedure 9(b) heightens these pleading requirements for all claims

Heightened Pleading Requirements for Claims Sounding or Grounded in Fraud

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that “sound in fraud” or are “grounded in fraud.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1125

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(9th Cir. 2009) (citation omitted); Fed. R. Civ. P. 9(b) (“In alleging fraud or mistake, a party must

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state with particularity the circumstances constituting fraud or mistake.”). “[The Ninth Circuit]

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has interpreted Rule 9(b) to require that allegations of fraud are specific enough to give defendants

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notice of the particular misconduct which is alleged to constitute the fraud charged so that they can

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defend against the charge and not just deny that they have done anything wrong.” Neubronner v.

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Milken, 6 F.3d 666, 671 (9th Cir. 1993) (quotation marks and citation omitted).

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In short, a fraud claim must state “the who, what, when, where, and how” of the alleged

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conduct, Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997), and “set forth an explanation as to

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why [a] statement or omission complained of was false and misleading,” In re GlenFed, Inc. Secs.

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Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (en banc), superseded by statute on other grounds as

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stated in Ronconi v. Larkin, 252 F.3d 423, 429 & n.6 (9th Cir. 2001).
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III.

DISCUSSION
A.

Article III Standing

Dometic moves under Rule 12(b)(1) to dismiss all claims for lack of standing. Mot. at 4–
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6. For the reasons articulated below, the Court finds that dismissal for lack of standing is
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warranted as to Papasan, but not the other plaintiffs.
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i.

Legal Standard

To establish Article III standing, “[t]he plaintiff must have (1) suffered an injury in fact,

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(2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be
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redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).
The plaintiff’s pleadings “must clearly allege facts demonstrating each element.” Id. at 1547
(quotation marks omitted). “To establish injury in fact, a plaintiff must show that he or she

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United States District Court
Northern District of California

suffered an invasion of a legally protected interest that is concrete and particularized and actual or
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imminent, not conjectural or hypothetical.” Id. at 1548 (quotation marks omitted). To qualify as
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“particularized,” the injury “must affect the plaintiff in a personal and individual way.” Id. To
qualify as “concrete,” the injury “must actually exist.” Id. at 1548. To qualify as “imminent,” the
“threatened injury must be certainly impending”; thus, “allegations of possible future injury” do
not establish injury in fact. Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1147 (2013) (original

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emphasis) (brackets omitted). Nevertheless, literal certainty that the identified harm will occur is
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not always required, as the Court has “found standing based on a ‘substantial risk’ that the harm
will occur, which may prompt plaintiffs to reasonably incur costs to mitigate or avoid that harm.”

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Id. at 1150 n.5. Finally, the Article III standing requirements are not loosened for class
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representatives. See Spokeo, 136 S. Ct. at 1547 n.6 (“That a suit may be a class action adds

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nothing to the question of standing, for even named plaintiffs who represent a class must allege
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and show that they personally have been injured, not that injury has been suffered by other,
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unidentified members of the class to which they belong.”) (ellipses and quotation marks omitted).

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ii.

Papasan (California)

The Court finds that Papasan lacks Article III standing because she has not met her burden
to clearly allege facts demonstrating injury in fact.
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Based on the allegation that “Papasan and all Class Members lost the benefit of their

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bargain as they unknowingly overpaid for a defective refrigerator,” see FAC ¶ 28, Papasan argues

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that she has adequately pled injury in fact under the Ninth Circuit’s decision in Hinojos v. Kohl’s

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Corp., 718 F.3d 1098 (9th Cir. 2013). See Opp. at 2. There, the Ninth Circuit held that “when, as

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here, [p]laintiffs contend that class members paid more for a product than they otherwise would

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have paid, or bought it when they otherwise would not have done so[,] they have suffered an

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Article III injury in fact.” Id. at 1104 n.3 (quotation marks and modifications omitted). Papasan

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cites this language from the opinion, but fails to recognize that the facts of Hinojos are readily

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distinguishable. See Opp. at 2. In Hinojos, the named plaintiff alleged that he was induced to
purchase merchandise that was falsely advertised as being “marked down from a fictitious

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United States District Court
Northern District of California

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‘original’ or ‘regular’ price.” 718 3.d at 1101. Thus, as Judge Orrick of this Court later observed,

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“the economic injury [in Hinojos] was not speculative but directly ascertainable.” See Cahen v.

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Toyota Motor Corp., 147 F. Supp. 3d 955, 969 (N.D. Cal. 2015). In contrast, the economic injury

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alleged here is vague and speculative: Papasan alleges in a conclusory manner that she

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“unknowingly overpaid” for her refrigerator, that refrigerators of that type “have diminished in

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value,” and that she and class members “are or have been exposed to further costs and expenses to

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dispose of and/or replace such refrigerators.” See FAC ¶ 28. Plaintiff fails to plead any facts

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plausibly supporting these conclusions.

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None of the other cases upon which Plaintiff relies change the Court’s conclusion that she

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has not adequately pled injury in fact. For example, the plaintiffs in Kearney v. Hyundai Motor

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Co., No. SACV 09-1298 DOC (MLGx), 2010 WL 9093204, at *3–5 (C.D. Cal. June 4, 2010)

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stated a sufficiently particularized injury by alleging that an air bag’s failure to activate when their

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small-statured relatives were riders prevented plaintiffs from fully enjoying the benefit of their

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bargain: a functional family vehicle. Similarly, in In re Toyota Motor Corp. Unintended

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Acceleration Marketing, Sales Practices, & Products Liability Litigation, 754 F. Supp. 2d 1145,

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1166 (C.D. Cal. 2010), the plaintiffs, also vehicle owners, pled specific dates and dollar amounts

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in alleging that a defect caused them to sell or trade their cars at a loss. In contrast here, Papasan

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fails to articulate any particularized facts showing that she suffered tangible losses—economic,
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functional, or otherwise—from having purchased an allegedly defective Dometic refrigerator. See

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FAC ¶ 28 (“[T]he Defective Gas Absorption Refrigerators have suffered a loss of usefulness . . .

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.”). Significantly, Papasan confirms that since purchasing her RV in 2005, she has “at all times

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used [it] for the purpose for which it was intended” without any apparent problem. Id. ¶¶ 12, 20.

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The Court does agree with Papasan that, to establish injury in fact, she does not necessarily

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need to plead that her refrigerator’s defect already manifested. See Opp. at 2–3; Toyota I, 754 F.

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Supp. 2d at 1161 (“[E]xperiencing an SUA defect is not required for standing.”); cf. Clapper, 133

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S. Ct. at 1147 (defining an “imminent” injury as one that is “certainly impending”) (original

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emphasis). However, the Court also agrees with the reasoning of cases holding that where the
alleged economic loss arises solely from a defect in a product, but that product has not yet failed

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United States District Court
Northern District of California

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to perform, “something more” is required beyond simply alleging overpayment for a defective

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product. See Cahen, 147 F. Supp. 3d at 970; Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp.

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2d 962, 973 (C.D. Cal. 2014); cf. Contreras v. Toyota Motor Sales USA, Inc., No. C 09-06024

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JSW, 2010 WL 2528844, at *6 (N.D. Cal. June 18, 2010), aff’d in part, rev’d in part sub nom.

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Contreras v. Toyota Motor Sales U.S.A. Inc., 484 F. App’x 116 (9th Cir. 2012) (affirming

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dismissal for lack of standing but reversing denial of leave to amend).

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For example, in Contreras, the district court found no injury in fact where the plaintiffs

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failed to allege that their vehicles had manifested the claimed braking defect, that they were forced

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to replace their vehicles, that they incurred out-of-pocket expenses, or any other facts supporting

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their “conclusory” allegation that their vehicles had lost value. See 2010 WL 2528844, at *6.

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Likewise, in Lee, which involved the allegedly inadequate performance of the braking feature in a

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pre-collision system (“PCS”), the court found no injury in fact because the plaintiffs did not allege

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“that the pre-collision braking feature fails to work as described; that they experienced any

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problems with PCS; that they are unwilling to drive their vehicles; that they sold or traded-in their

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vehicles at a loss; or any other facts that plausibly demonstrate any diminished value in their

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vehicles.” 992 F. Supp. at 973. Finally, in Cahen—which involved allegedly inadequate

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electronic security features that permitted vehicles to be controlled by remote hackers—the court

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declined to find economic injury solely on the basis of a speculative risk of future harm:
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Plaintiffs[’] allegation that their vehicles are worth substantially less
than they would be without the alleged defect is conclusory and
unsupported by any facts. [They] have not, for example, alleged a
demonstrable effect on the market for their specific vehicles based
on documented recalls or declining Kelley Bluebook values. Nor
have they alleged a risk so immediate that they were forced to
replace or discontinue using their vehicles, thus incurring out-ofpocket damages. In short, plaintiffs fail to establish economic injury
in fact because they have not alleged the required “something more”
beyond the speculative risk of future harm that underlies the
allegations of economic damage.

1
2
3
4
5
6
7

147 F. Supp. 3d at 971 (quotation marks and citations omitted).

8

Here, too, Papasan has failed to plead “something more” beyond the conclusory allegation

9

that she overpaid for her refrigerator. Her allegedly economic injury, as currently pled, rests only
upon a speculative risk of future harm. This is insufficient to constitute injury in fact.

11
United States District Court
Northern District of California

10

Consequently, Papasan has failed to establish Article III standing.2

12

iii.

Goehle (Washington) and Young (Ohio)

Dometic argues that Goehle lacks Article III standing because he “cannot allege a concrete

13
14

injury traceable to Dometic.” Mot. at 6 (original emphasis); see also Spokeo, 136 S. Ct. at 1547

15

(stating that injury in fact must be “fairly traceable to the challenged conduct of the defendant”).

16

In support of its argument, Dometic points to (1) documents allegedly showing that neither

17

Dometic nor its predecessor, Dometic, LLC, were in existence in 2000; and (2) that Goehle

18

purchased a “model year 2000” RV. See Mot. at 5–6 & n.13; FAC ¶ 30. Specifically, Dometic

19

cites company documents indicating that the brand arose as a leisure appliance division of the

20

company Electrolux, which had named the division “Dometic” “[b]y the end of the 1960s.”

21

Dometic, History, https://www.dometic.com/en-us/us/about-us/our-brand/history (last visited Oct.

22

3, 2017). Dometic’s documents also show that in 2001, Electrolux divested its interest in the

23

leisure market to EQT Northern Europe, a private equity firm, at which point “Dometic ha[d] to

24

stand on its own feet.” See id.; Electrolux, Press Release: Divestment of leisure-appliances

25
26
27
28

2

The Ninth Circuit’s recent holding in Davidson v. Kimberly-Clark Corp., No. 15-16173, 2017
WL 4700093, at *9 (9th Cir. Oct. 20, 2017) did not analyze whether the plaintiff’s allegations of
economic injury were sufficient to establish Article III standing, and thus does not impact the
Court’s analysis on this question.
12

1

operation finalized, Aug. 1, 2001, http://www.electroluxgroup.com/en/divestment-of-leisure-

2

appliances-operation-finalized-1833/ (last visited Oct. 3, 2017). In addition, Dometic has

3

proffered records from the Delaware Secretary of State’s website, which indicate that Dometic,

4

LLC was incorporated on June 15, 2001; that Dometic Corporation was incorporated on April 6,

5

2005; and that the two entities merged on December 18, 2012, with Dometic, LLC as the non-

6

survivor. See Dkt. No. 48 (“Priedman Decl.”) ¶¶ 2–3 & Exs. 1–2. In response, Goehle contends

7

that his “model year 2000 RV refrigerator is traceable to Dometic because it has been marketing,

8

distributing, and servicing refrigerators under the ‘Dometic’ brand name since 1989 – including

9

conducting a recall and retrofit campaign in 2006 that included refrigerators manufactured

10

between 1997 and 2003.” Opp. at 4 (citing FAC ¶¶ 134–36).3
While Dometic attempts a “factual” attack under Rule 12(b)(1), that challenge fails at this

United States District Court
Northern District of California

11
12

stage. See Leite, 749 F.3d at 1121. The foundation of Dometic’s standing challenge—that

13

Dometic could not have manufactured Goehle’s RV because Dometic did not exist as a corporate

14

entity until 2005—implicates several disputed factual issues going to the merits of Plaintiffs’

15

allegations. See Mot. at 6 n.14; Opp. at 4–5 n.20. As both parties recognize, the challenge

16

extends to Dometic’s ultimate liability for any pre-2005 Dometic-brand refrigerator. Id.;

17

Augustine v. United States, 704 F.3d 1074, 1077 (9th Cir. 1983) (“[W]here the jurisdictional issue

18

and substantive issues are so intertwined that the question of jurisdiction is dependent on the

19

resolution of factual issues going to the merits, the jurisdictional determination should await a

20

determination of the relevant facts on either a motion going to the merits or at trial.”); Leite, 749

21

F.3d at 1121 n.3. Even if the Court considers Dometic’s evidence that Dometic incorporated in

22

2005, that evidence does not controvert Plaintiffs’ claim that Dometic-brand refrigerators have

23

been distributed since 1997. See, e.g., FAC ¶¶ 14, 16. Dometic recognizes as much in their

24

motion. See Mot. at 2 n.3 (“[T]he Dometic tradename existed as of 1997 under different corporate

25
3

26
27
28

The cited portion of the FAC does not actually support the statement that “Dometic has been
marketing, distributing, and servicing refrigerators under the ‘Dometic’ brand name since 1989.”
See FAC 134–36. Nevertheless, Plaintiffs allege elsewhere that Dometic began manufacturing gas
absorption refrigerators as early as 1997. See, e.g., FAC ¶ 2, 14, 16 (referring to “[e]very gas
absorption refrigerator manufactured by Dometic since 1997” and “Dometic-branded gas
absorption refrigerator[s]”. . . manufactured between April 1997 and May 2003).
13

1

ownership. . .”). Because all Goehle needs to show is that his injury is fairly traceable to Dometic,

2

a question that Dometic’s corporate status does not necessarily resolve conclusively, the Court

3

finds that Goehle satisfies Article III’s standing requirements at this stage.
Similarly, Dometic argues in a footnote that “[b]ecause Young ‘purchased a previously

4
5

owned model year 2002’ RV, he too may not have owned a refrigerator that Dometic

6

manufactured or sold.’” See Mot. at 6 n.14 (quoting FAC ¶ 46). To the extent the Court considers

7

this cursory argument, it fails for the same reasons.4

8

iv.

Other Plaintiffs

The Court is not persuaded by Dometic’s Article III standing arguments regarding the

9

other plaintiffs. First, Dometic does not dispute that Plaintiffs have pled that they experienced a

11
United States District Court
Northern District of California

10

leak or fire, but contends that they offer only “conclusory allegations that such leak or fire was

12

caused by the alleged defect.” Mot. at 5. The Court disagrees. Plaintiffs have pled the nature of

13

the defect in detail, including why the defect allegedly created the risk of leaks and fires before

14

and after the recalls. See FAC ¶¶ 114–45. Moreover, the case cited by Dometic is inapposite. See

15

Anderson v. Select Comfort Retail Corp., No. CIV 10-128 KJM, 2010 WL 2635079, at *1 (E.D.

16

Cal. June 29, 2010) (granting Rule 12(b)(6) motion to dismiss for failure to plausibly allege that

17

the product defect was a “substantial factor in producing the injury,” where the allegations did not

18

identify the defect or describe how the defect caused the plaintiff’s injury, instead merely

19

contending that the product was a “potential” cause of the plaintiff’s injury).
Second, the Court rejects Dometic’s argument that Plaintiffs have not met their burden of

20
21

showing “standing to sue on behalf of boat owners.” See Mot. at 4. The Court is persuaded by the

22

reasoning of Glenn v. Hyundai Motor America, No. SA CV 15-2052-DOC (KESx), 2016 WL

23

3621280, at *15–16 (C.D. Cal. June 24, 2016), which recognized a split in authority in this

24

Circuit, but ultimately followed cases that, taking a cue from Gratz v. Bollinger, 539 U.S. 244

25

(2003), have held as follows:

26
4

27
28

See First Advantage Background Servs. Corp. v. Private Eyes, Inc., 569 F. Supp. 2d 929, 935
(N.D. Cal. 2008) (“A footnote is the wrong place for substantive arguments on the merits of a
motion, particularly where such arguments provide independent bases for dismissing a claim not
otherwise addressed in the motion.”).
14

1

Where a class action complaint encompasses both a product the
plaintiff purchased and a product he did not, the plaintiff sufficiently
has Article III standing to proceed with claims on behalf of class
members who purchased the latter if there is sufficient similarity
between the products purchased and not purchased.

2
3
4

Glenn, 2016 WL 3621280, at *15 (modification, brackets, and quotation marks omitted). In

5

Glenn, the court found that the plaintiffs had Article III standing to assert claims on behalf of class

6

members who had driven different models of Hyundai cars but nevertheless had allegedly

7

experienced the same defective sunroofs. Id. at 16. Similarly, Plaintiffs have shown “sufficient

8

similarity” with boat owners by alleging that the latter have experienced the same defective

9

refrigerators. See FAC ¶¶ 116–33, 149(b).

10

v.

For the foregoing reasons, the Court finds that Papasan has failed to plead a basis for

11
United States District Court
Northern District of California

Conclusion

12

Article III standing at this stage of the proceedings.5 The Court finds that the other plaintiffs have

13

adequately established standing.

14

B.

15

Moving to dismiss under Rule 12(b)(3), Dometic contends that the Vollbergs “have failed

Personal Jurisdiction

16

to establish that the Court has personal jurisdiction over Dometic for purposes of their claims.”

17

Mot. at 1, 6–7. The Vollbergs do not dispute that the Court lacks specific or general jurisdiction

18

over their claims. Opp. at 5–6. Instead, they argue that “Dometic does not dispute that the Court

19

has personal jurisdiction over the company as to all claims asserted by the California plaintiff

20

(Papasan),” and that the Court therefore “can and should maintain pendent personal jurisdiction

21

over the Vollbergs’ claims, because those claims arise out of the same nucleus of facts as

22

Papasan’s claims.” Id. at 5 (original emphasis). But Papasan lacks Article III standing, which is

23

fatal to the Vollbergs’ argument. Consequently, they have not met their burden of establishing

24

that the Court has personal jurisdiction over Dometic for the purposes of their claims. See Ranza

25

v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (“In opposing a defendant’s motion to dismiss

26

for lack of personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is

27
5

28

If Papasan is unable to adequately plead a basis for Article III standing in an amended complaint,
this may raise the issue of whether this District is the proper venue. See 28 U.S.C. § 1391(b).
15

1

proper.”)6

2

C.

3

As to the remaining Plaintiffs—Young (Ohio), Byers and Johnston (both Texas), and

Statute of Limitations and Tolling

4

Goehle (Washington)—the Court assesses Dometic’s argument that the statute of limitations for

5

their claims has run and no ground for tolling exists. See Mot. at 8–14. These Plaintiffs do not

6

dispute that their claims would be barred absent a basis for tolling, but argue that the discovery

7

rule and fraudulent concealment doctrine provide such a basis. Opp. at 7–14.

8

i.

Legal Standard

“A claim may be dismissed under Rule 12(b)(6) on the ground that it is barred by the

9

applicable statute of limitations only when the running of the statute is apparent on the face of the

11
United States District Court
Northern District of California

10

complaint . . . [and] it appears beyond doubt that the plaintiff can prove no set of facts that would

12

establish the timeliness of the claim.” Von Saher v. Norton Simon Museum of Art at Pasadena,

13

592 F.3d 954, 969 (9th Cir. 2010) (quotation marks and citation omitted), overruled on other

14

grounds by Galbraith v. City of Santa Clara, 307 F.3d 1119, 1125–26 (9th Cir. 2002). A federal

15

court sitting in diversity must apply substantive state law, including state law regarding statutes of

16

limitations and tolling. Albano v. Shea Homes Ltd. P’ship, 634 F.3d 524, 530 (9th Cir. 2011).

17

ii.

Fraudulent Concealment

Equitable tolling on the basis of fraudulent concealment must be pled with particularity

18
19

under Federal Rule of Civil Procedure 9(b). 389 Orange St. Partners v. Arnold, 179 F.3d 656, 662

20

(9th Cir. 1999) (holding that because the Federal Rules of Civil Procedure control diversity cases,

21

Rule 9(b) requires pleading circumstances constituting fraud with particularity, in the context of

22

fraudulent concealment tolling). Applying this standard, the Court assesses whether, as the

23

allegations are pled, the fraudulent concealment doctrine equitably tolls the statute of limitations

24

of those claims under Texas, Ohio, and Washington law. Under Ohio law, “[f]raudulent

25

concealment ‘is only available in compelling cases’ and the ‘plaintiff must show that the defendant

26
6

27
28

Dometic has not argued that the Court lacks personal jurisdiction over Dometic as to any of the
other plaintiffs’ claims. See Mot. at 6–7. And the Court need not address this issue sua sponte.
See Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066, 1076 (9th Cir. 2006) (“Because a
party can waive personal jurisdiction, we are not required to consider it sua sponte.”).
16

engaged in a course of conduct to conceal evidence of the defendant’s wrongdoing, and that the

2

plaintiff, despite the exercise of due diligence, failed to discover the facts supporting the claim.’”

3

In re Whirlpool, 45 F. Supp. 3d 706, 722 (N.D. Ohio 2014) (quoting Perkins v. Falke & Dunphy,

4

L.L.C., No. 25162, 2012 WL 6097104, at *3 (Ohio Ct. App. Dec. 7, 2012)). Under Texas law,

5

“[f]or the [fraudulent concealment] doctrine to apply, the plaintiff must prove the defendant: (1)

6

had actual knowledge of the wrong; (2) had a fixed purpose to conceal the wrong; and (3) did

7

conceal the wrong from the plaintiff.” Quigley v. Bennett, 256 S.W.3d 356, 360–61 (Tex. Ct.

8

App. 2008). Finally, to prove fraudulent concealment in Washington, “the plaintiff must show (1)

9

the plaintiff exercised due diligence in trying to uncover the facts, and (2) the defendant engaged

10

in affirmative conduct that would lead a reasonable person to believe that no claim of fraudulent

11
United States District Court
Northern District of California

1

concealment existed.” Casimir v. Remington Arms Co., LLC, 2013 U.S. Dist. LEXIS 6765, at *10

12

(W.D. Wash. Jan. 15, 2013) (internal quotation omitted).

13

Here, Plaintiffs argue that paragraphs 137, 142, 145–146, and 148–155 of the FAC

14

collectively allege that Dometic (1) has known about the corrosive defect since at least 1999, (2)

15

has taken no steps to warn customers about the defect or to properly retrofit the product, (3) has

16

acquired knowledge of the defect through internal databases, (4) has been engaged in constant

17

litigation about the defect, (5) has had access to expert reports documenting the defect, (6) has

18

mischaracterized the defect as a fatigue crack affecting only a limited number of units, (7) has

19

refused to acknowledge the actual defect in the recalls, (8) has misrepresented the conditions

20

creating the fire risk, (9) has established misleading field testing protocol, (10) has limited the

21

scope of the recalls, (11) has conducted retrofit campaigns falsely represented as fixing the defect,

22

(12) has failed to warn of safety risks, and (13) has concealed safer alternative designs that would

23

minimize or eliminate the safety risks. Opp. at 13–14.7 Dometic argues that those paragraphs fail

24

to meet the heightened pleading requirements for fraudulent concealment under Rule 9(b). Reply

25

at 7. The Court disagrees. The cited paragraphs contain some allegations that, read in isolation,

26
7

27
28

In addition, Plaintiffs argue that they lacked knowledge of the defect prior to discovering it and
that the defect is not visible to consumers. Id. at 14 (citing FAC ¶¶ 25, 37–38, 53–54, 57–58, 69–
70, 85–86, 89–90, 100–103, 106–07, 155). The Court finds that these cited paragraphs adequately
plead Plaintiffs’ lack of knowledge of the defect under Rule 9(b).
17

1

might lack the requisite particularity under Rule 9(b). See, e.g., FAC ¶ 145 (“Dometic had actual

2

knowledge of the inadequacy of the retrofit campaign, in that it continued to receive fire claims

3

involving its Defective Gas Absorption Refrigerators that had already been retrofitted with the

4

above devices, or which had the devices installed during production.”); id. ¶ 151 (“The design and

5

manufacturing defects in the Defective Gas Absorption Refrigerators, Dometic’s active

6

concealment of those defects, and the inadequate and fraudulent product safety recall/retrofit

7

campaigns conducted by Dometic, created serious and unreasonable safety risks to consumers and

8

users of Dometic’s products, i.e., the risk of property damage, injury, and death by fire.”)

9

However, many portions of the cited paragraphs contain substantially more detailed allegations.
See, e.g., id. ¶ 149(a) & n.4 (quoting Dometic notice dated April 11, 2008 to support its allegation

11
United States District Court
Northern District of California

10

that Dometic failed to adequately disclose the defect); id. ¶ 149(e) (alleging that an engineer who

12

ran tests for Dometic lied under oath in 2014 about not having examined a Dometic-brand gas

13

absorption refrigerator that he had determined to have been the cause of an RV fire); id. ¶ 149(h)

14

(alleging that Dometic’s field testing protocol misleadingly sets the maximum pressure of the leak

15

test at 100 psi, while the normal operating pressure for Dometic’s refrigerators is up to 450 psi).

16

The Court finds that, collectively, paragraphs 137, 142, 145–146, and 148–155 of the FAC plead

17

the fraudulent concealment doctrine with the requisite particularity under Rule 9(b), including the

18

who, what, when, where, and how. It is possible that Plaintiffs may be able to prove some set of

19

facts that would establish the timeliness of their claims pursuant to the fraudulent concealment

20

doctrine under Texas, Ohio, and Washington law. At this stage, that is sufficient.8

21

D.

22

Dometic argues that the claims asserted by Young are barred by the statute of repose under

Statute of Repose

23

Ohio law. Mot. at 14. The Ohio statute states in part that “no cause of action based on a product

24

liability claim shall accrue against the manufacturer or supplier of a product later than ten years

25

from the date that the product was delivered to its first purchaser or first lessee.” Ohio Rev. Code

26

§ 2305.10(C)(1). However, “this section does not apply if the manufacturer or supplier of a

27
8

28

Since the Court finds that the fraudulent concealment allegations provide an adequate basis for
tolling, it does not reach the parties’ arguments regarding the discovery rule.
18

product engaged in fraud in regard to information about the product and the fraud contributed to

2

the harm that is alleged in a product liability claim involving that product.” Id. § 2305.10(C)(2).

3

Young points to section (C)(2) as providing an exception to application of the statute of repose.

4

Opp. at 14. Dometic argues that section (C)(2) is inapplicable because “Young has not adequately

5

alleged . . . that Dometic manufactured his refrigerator.” Reply at 7 (citing Mot. at 6 n.14).

6

Young purchased a used model 2002 RV. See FAC ¶ 46. Thus, based upon public records

7

indicating that Dometic LLC was not incorporated until June 15, 2001 and that Dometic

8

Corporation was not incorporated until April 6, 2005, see Priedman Decl. ¶¶ 2–3 & Exs. 1–2,

9

Dometic is essentially arguing that Young has not plausibly alleged that Dometic manufactured

10

his refrigerator. See Mot. at 6 n.14. To the extent that Dometic is seeking to take judicial notice

11
United States District Court
Northern District of California

1

of public records not for their existence, but to prove a disputed fact (i.e., whether Dometic

12

manufactured Young’s refrigerator), this is not appropriate on a motion to dismiss. See Lee v. City

13

of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). In addition, for the reasons articulated above,

14

see supra Part III.C.ii, the Court rejects Dometic’s argument that Young’s allegations of fraud do

15

not meet the particularity requirement of Rule 9(b). See Mot. at 7. Hence, the Court finds that

16

Young has plausibly alleged that the fraud exception of section 2305.10(C)(2) applies, such that,

17

at this stage of the proceedings, his claims are not barred by Ohio’s statute of repose.

18

Dometic’s statute of repose challenge to Goehle’s claims likewise fails. Mot. at 14.

19

Washington codifies a fraudulent concealment exception similar to that in Ohio: “A product seller

20

may be subject to liability for harm caused by a product used beyond its useful safe life, if: . . . (ii)

21

The product seller intentionally misrepresents facts about its product, or intentionally conceals

22

information about it, and that conduct was a proximate cause of the claimaint’s harm.” Wash.

23

Rev. Code Ann. § 7.72.060(i)(b)(ii). Because the Court finds Goehle’s fraud allegations

24

adequately pled, see supra Part III.C.ii., his claims likewise survive Dometic’s motion to dismiss.

25

E.

26

Under Rule 12(b)(6), Dometic contends that Plaintiffs have failed to state claims upon

Failure to State Claims for Relief

27

which relief can be granted. Mot. at 14–30. The Court addresses these arguments as they relate to

28

the claims asserted by Young (Ohio), Byers and Johnston (both Texas), and Goehle (Washington).
19

i.

1

Consumer Protection Claims

Dometic argues that “Plaintiffs’ consumer protection and fraud by concealment claims,

2
i.e., the Consumer Protection Claims, fail as a matter of law.” Mot. at 14–15.
3
a. Young (Ohio)

4

To bring a class action under the OCSPA, Plaintiffs must satisfy the class action notice
5
requirement of section 1345.09(B) of the Ohio Revised Code. See Terlesky v. Fifth Dimension,
6
Inc., No. 1:15-cv-374, 2015 WL 7254189, at *3 (S.D. Ohio Nov. 17, 2015). This requirement can
7
8
9
10

be satisfied by establishing that “the alleged violation is an act or practice that was determined by
a court to violate the OCSPA and the court’s decision was available for inspection before the
transaction took place.” Id. (quoting Marrone v. Philip Morris USA, Inc., 850 N.E.2d 31, 34
(Ohio 2006)).9 Young asserts that the class notice requirement was satisfied by Brown v. H & S

11
United States District Court
Northern District of California

Corp., No. 35746, 1974 WL 35420 (Ohio Com. Pl. July 15, 1974). FAC ¶ 310. The Court is not
12
persuaded. The deceptive acts and practices in Brown involved a sales scheme (including bulk
13
mailers and in-home sales presentations) that used disinformation to sell swimming pools. See
14
15
16

1974 WL 35420, at *1–2. However, “[c]ases that involve industries and conduct very different
from the defendant’s do not provide meaningful notice of specific acts or practices that violate the
[OCSPA].” See Marrone, 850 N.E.2d at 36. The Court finds that Brown did not provide

17
meaningful notice regarding the alleged deceptive acts and practices here, such that the class
18

notice requirement of section 1345.09(B) is not satisfied. Therefore, dismissal of Young’s

19
OCSPA claims is warranted.
20
b. Byers and Johnston (Texas)

21

The DTPA and fraud by concealment claims asserted by Byers and Johnston must meet the
22
heightened pleading standard of Federal Rule of Civil Procedure 9(b). See Luna v. Nationwide
23

Prop. & Cas. Ins. Co., 798 F. Supp. 2d 821, 826 (S.D. Tex. 2011) (“Because Rule 9(b) applies by

24
25
9

26
27
28

Alternatively, the class notice requirement can be satisfied by establishing that “the alleged
violation is an act or practice that was declared to be deceptive or unconscionable by a rule
adopted by the Attorney General before the consumer transaction on which the action is based.”
Terlesky, 2015 WL 7254189, at *3 (quoting Marrone, 850 N.E.2d at 34). However, this
alternative basis is not at issue here. See FAC ¶ 310 (asserting that section 1345.09(B)’s class
notice requirement is satisfied on basis of prior court decision).
20

1

its plain language to all averments of fraud, whether they are part of a claim of fraud or not, it

2

applies to statutory claims based on allegations of fraud. Claims alleging violations of the . . .

3

[DTPA] are subject to the requirements of Rule 9(b).”) (quotation marks, citation, and ellipses

4

omitted). These claims rely on theories of both affirmative misrepresentation and omission. See

5

FAC ¶¶ 353–70, 378–89. As to the affirmative misrepresentation claims, Plaintiffs’ argument that

6

Rule 9(b) is satisfied relies on the RVIA sticker. See Mot. at 16 (“Plaintiffs allege . . . the where

7

(the RVIA sticker) . . . .”); FAC ¶ 65 (“Byers relied on the affirmative representations contained in

8

the RVIA sticker in deciding to purchase the Byers RV.”); id. ¶ 81 (“Johnston reasonably relied on

9

the affirmative representations contained in the RVIA in deciding to purchase the Johnston RV.”).
The RVIA stickers placed on the outside of the Byers and Johnston RVs stated that the

11
United States District Court
Northern District of California

10

“manufacturer certifies compliance with standard for recreational vehicles.” See FAC ¶¶ 65, 81 &

12

Figs. 9–10 (emphasis added). But Johnston and Byers allege that Dometic manufactured their

13

refrigerators, not their RVs. See id. ¶¶ 63, 79. At oral argument, Plaintiffs’ counsel contended

14

that affirmative statements by RV manufacturers could be “imputed” to Dometic, but recognized

15

that there was “no case on point . . . that says . . . we can impute any statements of any assembler

16

of a product to the subsidiaries that assembled it.” Hr’g Tr. at 19:7–9, 20:1–4. In the absence of

17

such authority, the Court finds that Johnston and Byers cannot support their affirmative

18

misrepresentation claims with representations that Dometic did not make (i.e., the contents of the

19

RVIA stickers).

20

Nevertheless, the fraud by concealment and DTPA claims asserted by Byers and Johnston

21

may proceed insofar as they are premised upon Dometic’s alleged omissions. See Prudential Ins.

22

Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 160–61 (Tex. 1995) (declaring that both

23

DTPA and fraud claims require proof of causation, which can be premised on either “an act or

24

omission”); In re Crown Ranch Dev. Ltd., No. 11-90052, 2012 WL 1072221, at *4 (Bankr. E.D.

25

Tex. Mar. 29, 2012) (stating that fraud by misrepresentation and fraud by concealment are both

26

treated as common law fraud under Texas law). The Court finds that Byers and Johnston have

27

satisfied Rule 9(b) by alleging who (Dometic), what (material omissions regarding safety risks of

28

allegedly defective refrigerators), when (since sales began in 1997), where (point of sale materials,
21

1

owner’s manual, and written warranty), and how (consumers’ reasonable reliance on material

2

omissions causing economic loss). See FAC ¶¶ 66, 82, 112–13, 119–45.10
In addition, Dometic contends that Byers and Johnston failed to satisfy the 60-day notice

3
4

requirement for filing their claims. Mot. at 21; see also Tex. Bus. & Com. Code § 17.505.

5

Contrary to Dometic’s assertion, the failure to satisfy the DTPA’s notice requirement is not

6

grounds for dismissal. Compare Mot. at 21 (seeking dismissal) with Oppenheimer v. Prudential

7

Sec. Inc., 94 F.3d 189, 194 (5th Cir. 1996) (“[T]he proper remedy for insufficient notice is

8

abatement not dismissal.”).
While abatement is warranted under some circumstances where notice is insufficient under

9

14

section 17.505, this is not such a case. As the Texas Supreme Court has held:
[I]f a plaintiff files an action for damages under the DTPA without
first giving the required notice, and a defendant timely requests an
abatement, the trial court must abate the proceedings for 60 days.
To be timely, the request for an abatement must be made while the
purpose of notice—settlement and avoidance of litigation expense—
remains viable. Thus, defendant must request an abatement with the
filing of an answer or very soon thereafter.

15

Hines v. Hash, 843 S.W.2d 464, 469 (Tex. 1992) (citations omitted) (emphasis added). Here,

16

Dometic has requested only dismissal, not abatement, and the deadline for requesting abatement

17

has long since passed. This failure to request abatement constitutes waiver of DTPA notice. See

18

id. at 469. Thus, dismissal of the DTPA claims on grounds of inadequate notice under section

19

17.505 is unwarranted.

10

United States District Court
Northern District of California

11
12
13

20

Based on the foregoing, the fraud by concealment and DTPA claims asserted by Byers and

21

Johnston may proceed insofar as they are premised upon Dometic’s alleged omissions, but not

22

insofar as they are premised upon alleged misrepresentations in the RVIA sticker.

23

c. Goehle (Washington)
Dometic argues that Goehle’s consumer protection claim fails because the complaint’s

24
25

allegations cannot satisfy Rule 9(b)’s heightened pleading requirements. Mot. at 14–19. In

26
27
28

10

Although Dometic argues that Plaintiffs have not adequately alleged the state of its “knowledge
at the time each Plaintiff purchased his or her refrigerator,” see Mot. at 16, the Court disagrees, see
FAC ¶¶ 146–55.
22

1

particular, Dometic contends that Goehle fails to show that (1) Dometic had knowledge of the

2

refrigerator’s defect when Goehle purchased his Dometic-brand refrigerator; or (2) actual reliance

3

on Dometic’s misrepresentation. See id. at 16–18; see Frias v. Asset Foreclosures Servs., 957 F.

4

Supp. 2d 1264, 1271 (W.D. Wash. 2013) (requiring a plaintiff to show that an unfair or deceptive

5

act or practice is causally linked to the plaintiff’s injury).

6

Goehle’s allegations satisfy Rule 9(b)’s requirements. Goehle states that he purchased his

7

2000 model RV in 2005. FAC ¶ 30. Goehle furthermore alleges that Dometic “knowingly

8

omitted material facts” regarding his defective refrigerator, thereby engaging in “deceptive

9

business practices in violation of the Washington CPA.” FAC ¶¶ 422–33. Goehle indicates that
he would have acted differently but for Dometic’s omission and concealment, including by

11
United States District Court
Northern District of California

10

declining to purchase an RV with a Dometic-brand refrigerator. Id. at 433. And, like all other

12

Plaintiffs, Goehle makes specific allegations as to Dometic’s knowledge of the product defect in

13

the relevant time period, i.e. since 1999. See also FAC ¶¶ 419–39. For these reasons, and those

14

already set forth in Part III.C.ii, Goehle’s allegations regarding Dometic’s fraudulent acts and

15

omissions survive Dometic’s dismissal motion.

16
17
18
19
20

ii.

Implied Warranty Claims

Dometic argues that Plaintiffs fail to adequately plead their state implied warranty claims.
Mot. at 21–26. The Court addresses this argument as to the Ohio and Texas claims.
a. Young (Ohio)
Under Ohio law, a plaintiff typically may only assert a contract claim for breach of

21

implied warranty against a party with whom he is in privity. Curl v. Volkswagen of Am., Inc., 871

22

N.E.2d 1141, 1147 (Ohio 2007). Dometic argues and Young does not dispute that he is not in

23

privity with Dometic. Compare Mot. at 23–24 with Opp. at 26. Instead, Young contends that he

24

has “adequately allege[d] the third party beneficiary exception to vertical privity.” Opp. at 26.

25

The Court is not persuaded.

26

Young relies upon Bobb Forest Products, Inc. v. Morbark Industries, Inc., 783 N.E.2d 560

27

(Ohio 2012). Opp. at 27 n.194. There, the court held that “if the promisee intends that a third

28

party should benefit from the contract, then that third party is an ‘intended beneficiary’ who has
23

1

enforceable rights under the contract,” whereas “[i]f the promisee has no intent to benefit a third

2

party, then any third-party beneficiary to the contract is merely an ‘incidental beneficiary,’ who

3

has no enforceable rights under the contract.” Bobb Forest, 783 N.E. at 576 (quotation marks and

4

ellipses omitted). Moreover, the court observed that merely conferring “some benefit on the

5

supposed beneficiary by the performance of a particular promise in a contract is insufficient;

6

rather, the performance of that promise must also satisfy a duty owed by the promisee to the

7

beneficiary.” Id. (quotation marks and brackets omitted). Applying this “intent to benefit” test,

8

the court ruled that a particular consumer was the intended third-party beneficiary of a sales

9

contract where (1) the manufacturer knew that it was manufacturing the particular good for the
particular consumer’s ultimate use; (2) the retailer only purchased the good from the manufacturer

11
United States District Court
Northern District of California

10

after it knew that the consumer would ultimately purchase the good; (3) the manufacturer did not

12

mass produce the good (producing just one unit per year); and (4) the manufacturer knew exactly

13

who the ultimate consumer would be and what the particular consumer’s needs and requirements

14

were. Id. Given that the manufacturer “produced this specific [good] for this specific consumer

15

while knowing this specific consumer’s needs,” the court ruled that the manufacturer “[c]learly . . .

16

intended that this [good] would satisfy [this specific consumer’s] needs.” Id. (emphasis added).

17

Subsequently, a federal court “decline[d] to extend the limited privity exception

18

articulated in Bobb Forest beyond the facts of that case,” in light of the Ohio Supreme Court’s

19

“unequivocal language” in its intervening Curl opinion finding that vertical privity was required to

20

assert an implied warranty claim. McKinney v. Bayer Corp., 744 F. Supp. 2d 733, 757–58 (N.D.

21

Ohio 2010); see also Curl, 871 N.E.2d at 1147 (“The privity requirement, which remains absent in

22

strict liability tort actions, allows sellers of goods to define their scope of responsibility and

23

provides a greater degree of foreseeability regarding potential claimants. To permit a claimant to

24

recover without establishing vertical privity blurs the distinction between contract and tort.”).

25

Other district courts have followed suit in limiting Bobb Forest to the facts of that case. See, e.g.,

26

In re Dial Complete Mktg. & Sales Practices Litig., 312 F.R.D. 36, 72 (D.N.H. 2015).

27

The Court agrees with the reasoning of McKinney and finds the facts of the instant case

28

clearly distinguishable from Bobb Forest. Young has not plausibly alleged that Dometic knew
24

that it was manufacturing his particular refrigerator for his ultimate use, that the manufacturer of

2

Young’s RV only purchased the refrigerator after knowing that Young would ultimately purchase

3

the RV, that Young’s refrigerator was not mass produced, or that Dometic was aware of Young’s

4

particular needs as the ultimate consumer. To the contrary, the face of the operative complaint

5

indicates that Young’s refrigerator was mass produced at least seven years before he bought his

6

RV. See FAC ¶¶ 4, 135, 137 (reflecting that Dometic has manufactured millions of the allegedly

7

defective refrigerators since 1997); id. ¶ 46 (indicating that, in 2009, Young purchased his model

8

year 2002 RV). The operative complaint’s conclusory allegations are insufficient to bring the

9

instant case within the Bobb Forest exception, and dismissal is therefore warranted. See FAC ¶

10

212 (“Plaintiffs and Class members are intended third-party beneficiaries of contracts between

11
United States District Court
Northern District of California

1

Dometic and its dealers or RV/boat manufacturers; specifically, they are the intended beneficiaries

12

of Dometic’s implied warranties. The dealers and manufacturers were not intended to be the

13

ultimate consumers of the Defective Gas Absorption Refrigerators and have no rights under the

14

warranty agreements provided; the warranty agreements were designed for and intended to benefit

15

the ultimate consumers only.”); Rollolazo v. BMW of N. Am., LLC, No. CV 16-00966 BRO(SSx),

16

2017 WL 1536456, at *16 (C.D. Cal. Feb. 3, 2017) (dismissing Ohio implied warranty claim

17

asserting similarly conclusory allegations because the case was distinguishable from Bobb Forest).

18
19

b. Byers and Johnston (Texas)
The parties agree that timely pre-suit notice of the implied warranty claims was required

20

under Texas law. Compare Mot. at 25 with Opp. at 27; see also Tex. Bus. & Com. Code §

21

2.607(c) (“Where a tender has been accepted . . . the buyer must within a reasonable time after he

22

discovers or should have discovered any breach notify the seller of breach or be barred from any

23

remedy.”); McKay v. Novartis Pharm. Corp., 751 F.3d 694, 705–07 (5th Cir. 2014) (finding that

24

under section 2.607(c), the plaintiff has burden of alleging and proving pre-suit notice to remote

25

sellers and manufacturers, not just immediate ones). The dispute centers on whether this pre-suit

26

notice requirement has been adequately pled. Byers and Johnston allege that they “provided pre-

27

suit notice to Dometic on April 20, 2016 via certified mail as required by Texas Business and

28

Commercial Code § 17.505.” FAC ¶ 377. However, Dometic argues that Plaintiffs’ notice was
25

improper. See Mot. at 25 (citing Dkt. No. 48-5). The Court finds that the notice plausibly could

2

have been adequate to alert Dometic that the Plaintiffs were dissatisfied with their refrigerators.

3

See Hull v. S. Coast Catamarans, L.P., 365 S.W.3d 35, 44 (Tex. App. 2011) (“A general

4

expression of the buyer’s dissatisfaction . . . may be sufficient to comply with section 2.607.”);

5

McKay v. Novartis Pharm. Corp., 934 F. Supp. 2d 898, 913 (W.D. Tex. 2013) (“[Under section

6

2.607(c)], the notice must have alerted [the defendant] to a particular buyer/end user, namely [the

7

plaintiff], who was having problems with its products.”), aff’d, 751 F.3d 694 (5th Cir. 2014).

8

Plaintiffs also have met their minimal burden at the pleading stage to allege that notice was timely.

9

See Gonzalez v. Reed-Joseph Int’l Co., No. 4:11-cv-01094, 2013 WL 1578475, at *15 (S.D. Tex.

10

Apr. 11, 2013) (“Notice is ordinarily a question of fact, not a question of law.”). Plaintiffs state

11
United States District Court
Northern District of California

1

that they provided “pre-suit notice to Dometic on April 20, 2016” pursuant to section 2.607 and

12

section 17.505, respectively. FAC ¶¶ 250, 377.11
In addition to providing timely pre-suit notice, Byers and Johnston must adequately allege

13
14

the basic elements of an implied warranty claim under Texas law. The parties agree that this

15

requires Plaintiffs to state that (1) the product contained a defect rendering it unfit for its ordinary

16

purpose; (2) the defect existed when the product left the manufacturer’s possession; and (3) the

17

defect caused injury. Gen. Motors Corp. v. Garza, 179 S.W.3d 76, 81 (Tex. App. 2005). Dometic

18

contends that Plaintiffs cannot plausibly show that the company’s refrigerators failed to provide a

19

“minimum level of quality” in performing their intended function: cooling. See Mot. at 22 (citing

20

In re iPhone 4S Consumer Litig., 2013 U.S. Dist. LEXIS 103058, at *56–57 (N.D. Cal. Jul. 23,

21

2013)); see also Strauss v. Ford Motor Co., 439 F. Supp. 2d 680, 685 (N.D. Tex. 2006)

22

(dismissing an implied warranty claim where the plaintiff failed to allege that his vehicle was unfit

23
24
25
26
27
28

11

To the extent Dometic asserts that the Court may consider the notice for the truth of its contents
(i.e., to establish that the notice was not sent until after the lawsuit was filed) on a motion to
dismiss, the Court disagrees. See United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003)
(holding that a document may be incorporated by reference only if the document forms the basis
of the plaintiff’s claim or if the plaintiff refers extensively to the document). Nonetheless, if the
notice is authentic (and Plaintiffs do not appear to seriously dispute that it is), that would pose an
obvious timeliness problem for this claim at the motion for summary judgment stage. Plaintiffs’
counsel should carefully consider their Rule 11 obligations in assessing whether a good-faith basis
exists for proceeding with this claim.
26

1

for transportation, a vehicle’s “sole ordinary purpose”).
The Court disagrees. Byers and Johnston’s allegations suffice to suggest that Dometic

2
3

designed and manufactured refrigerators with an inherent defect rendering those refrigerators unfit

4

for their basic purpose. See FAC ¶¶ 63–64, 68–69, 72 (Byers); id. ¶¶ 79–80, 84–85, 91, 94

5

(Johnston). For instance, Byers states that the cooling unit in his refrigerator “failed due to a leak

6

at the boiler tube. . . caused by. . . the inherent defect.” FAC ¶ 69. That failure resulted in Byers

7

being unable to continue using the unit in his RV, and having to replace the cooling unit. Id.

8

While Johnston does not allege failure by leak, he does state that the inherent defect in his

9

refrigerator caused it to “malfunction[] and ignite[] a fire” in his RV while the RV was parked on
his property. FAC ¶ 85. That fire, purportedly owing to the defect, not only razed Johnston’s

11
United States District Court
Northern District of California

10

refrigerator, but also “completely destroyed” his vehicle, and caused property damage. Id.; see

12

Hyundai Motor Co. v. Rodriguez ex rel. Rodriguez, 995 S.W.2d 661, 665 (Tex. 1999) (finding that

13

in a vehicle crashworthiness case, an “unreasonable risk of harm in the event of an accident”

14

renders a vehicle “unfit for the ordinary purposes for which it is used because of a lack of

15

something necessary for adequacy”) (internal quotations and alterations omitted); accord Duran v.

16

City of Eagle Pass, Tex., No. SA-10-CV-504-XR, 2012 WL 1593185, at *2 (W.D. Tex. May 3,

17

2012).

18

Dometic stresses that Plaintiffs cannot show a defect at the time of sale because Byers and

19

Johnston’s RVs were either used or too old at the time of the alleged injury. Mot. at 22–23. But

20

in Texas, “downstream” purchasers seeking to recover for economic loss need “hold the merchant

21

accountable only for the state of the product when it passed to the first buyer.” MAN Engines &

22

Components, Inc. v. Shows, 434 S.W.3d 132, 138 (Tex. 2014). To that end, Plaintiffs sufficiently

23

allege that the injury-causing defect was present at the point-of-sale. See FAC ¶¶ 63–64, 79–80,

24

373 –76. Thus, the Court declines to dismiss Byers and Johnston’s claims for a breach of the

25

implied warranty of merchantability.

26

c. MMWA Claims

27

The parties agree that under Ninth Circuit precedent, Plaintiffs’ MMWA claims “stand or

28

fall” with their “warranty claims under state law.” Compare Mot. at 26 with Opp. at 28 & n.203
27

1

(both citing Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008)); see also

2

Daniel v. Ford Motor Co., 806 F.3d 1217, 1227 (9th Cir. 2015) (same). Because the Court

3

dismisses under Ohio law Young’s underlying implied warranty claim, the MMWA claim asserted

4

by Young likewise fails. Byers and Johnston’s MMWA claims, however, survive the dismissal

5

motion.

6

iii.

7
8
9

Negligence Claims
a. Young (Ohio) and Byers and Johnston (Texas)

The Court does not consider Dometic’s argument, unsupported by any further explanation,
that “[t]he OPLA . . . preempt[s] Young’s . . . common law negligence claim[].” Mot. at 27.
However, Dometic also argues that the economic-loss doctrine bars certain Plaintiffs’ negligence

11
United States District Court
Northern District of California

10

claims. Id. The Court considers that argument as to the negligence claims asserted under Ohio

12

and Texas law.

13

In Ohio, the “general rule is that a plaintiff who has suffered only economic loss due to

14

another’s negligence has not been injured in a manner which is legally cognizable or

15

compensable.” Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins. Co., 537 N.E.2d 624, 630 (Ohio

16

1989) (internal quotation omitted). Thus, economic losses cannot typically be recovered for

17

negligence claims without injury to persons or property damage. Id. But “[f]or an ordinary

18

consumer, i.e., one not in privity of contract with the seller or manufacturer against whom

19

recovery is sought, an action in negligence may be an appropriate remedy to protect the

20

consumer’s property interests.” Id. at 630–31. Most federal courts sitting in Ohio adhere to this

21

privity distinction in applying the state’s economic loss doctrine. See In re Whirlpool Corp.

22

Front-Loading Washer Prod. Liab. Litig., 684 F. Supp. 2d 942, 949–50 (N.D. Ohio 2009) (“[T]he

23

foundational doctrinal distinction in the economic loss rule jurisprudence is whether the parties are

24

in privity of contract.”); In re Porsche Cars N. Am., Inc., 880 F. Supp. 2d 801, 871–72 (S.D. Ohio

25

2012) (allowing Ohio plaintiffs to bring negligent design claims against a product manufacturer

26

for purely economic losses).

27
28

According to this reasoning, a strong version of the economic loss rule applies if the
plaintiff and defendant are in contractual privity. In re Whirlpool Corp., 684 F. Supp. 2d at 949.
28

1

“In contrast, when the parties are not in privity of contract, courts apply a more relaxed rule,

2

allowing individual consumers to bring negligence claims for solely economic injuries.” Id.

3

Courts have accordingly permitted “ordinary” individual Ohio consumers to seek economic

4

damages from manufacturers of allegedly defective goods. See id. (denying a dismissal motion

5

where individual plaintiffs sought economic damages against a washing machine manufacturer

6

under negligent design and failure to warn theories); State Farm Mut. Auto. Ins. Co. v. Kia Motors

7

Am., Inc., 828 N.E.2d 701, 707–08 (Ohio App. 2005) (allowing recovery by individual plaintiffs

8

against an automobile manufacturer for negligence claims); Cincinnati v. Beretta U.S.A. Corp.,

9

768 N.E.2d 1136, 1146 (Ohio 2002) (holding that plaintiffs in Ohio can pursue “common-law
product liability claims” for economic damages alone). Dometic’s primary Ohio authority on this

11
United States District Court
Northern District of California

10

question likewise relies on the privity distinction to dismiss a corporate buyer’s negligence claims

12

for pure economic loss. See Nationwide Agribusiness Ins. Co. v. CNH Am. LLC, 2014 U.S. Dist.

13

LEXIS 75997, at *26 (N.D. Ohio June 4, 2014) (highlighting that the plaintiff was “a commercial

14

buyer for purposes of the economic loss rule”).

15

The Ohio Plaintiff in this case, Young, is an individual ordinary consumer not in privity

16

with Dometic. See FAC ¶¶ 46–53, 305–15. His negligence claims for pure economic losses

17

therefore survive Dometic’s dismissal motion under Ohio state law.

18

Texas’s strict version of the economic loss doctrine differs from Ohio’s iteration of the

19

rule. In Texas, “[t]he economic loss rule applies when losses from an occurrence arise from

20

failure of a product and the damage or loss is limited to the product itself.” Equistar Chemicals,

21

L.P. v. Dresser-Rand Co., 240 S.W.3d 864, 867 (Tex. 2007). “The rule does not preclude tort

22

recovery if a defective product causes physical harm to the ultimate user or consumer or other

23

property of the user or consumer in addition to causing damage to the product itself.” Id.; Pugh v.

24

Gen. Terrazzo Supplies, Inc., 243 S.W.3d 84, 91 (Tex. App. 2007) (internal quotation omitted).

25

Texas courts accordingly define “other property” to exclude recovery for damages to a “finished

26

product caused by a defective component part.” Id.; see Murray v. Ford Motor Co., 97 S.W.3d

27

888, 891–93 (Tex. App. 2003) (denying recovery for damages to a truck that caught fire due to a

28

faulty wiring harness). But where “‘collateral property damage exists in addition to damage to the
29

1

product itself’ the plaintiff can recover in tort as well as in contract.” Alcan Aluminum Corp. v.

2

BASF Corp., 133 F. Supp. 2d 482, 503 (N.D. Tex. 2001) (quoting Signal Oil & Gas Co. v.

3

Universal Oil Products, 572 S.W.2d 320, 325 (Tex.1978)).
When it comes to defining “component parts,” “[t]he boundary between the subject matter

4
5

of a contract and ‘other property’ when the former is a component of the latter is not completely

6

clear.” Id. at 503–05. A relevant distinction in that circumstance is whether the parties “bargained

7

separately for individual components” or whether they received the integrated product as a whole.

8

Id. If the plaintiff received the damaged product in a final, integrated form, “[i]njury to [that]

9

machine as a whole caused by a defective component” is non-cognizable economic loss. See id. at
505 (denying economic losses for aluminum-based panels due to damage from a pre-existing

11
United States District Court
Northern District of California

10

interior insulating foam); Hininger v. Case Corp., 23 F.3d 124, 126 (5th Cir. 1994) (prohibiting

12

recovery against the manufacturer of a combine wheel that damaged the finished combine); Essex

13

Ins. Co. v. Blount, Inc., 72 F. Supp. 2d 722, 724 (E.D. Tex. 1999) (looking to the product as a

14

whole in a negligence action to determine “whether the product injured itself”).
Here, Johnston states that he purchased his RV already equipped with a defective Dometic

15
16

refrigerator. FAC ¶¶ 79–80. Johnston alleges that this refrigerator caused a fire that completely

17

destroyed his RV, and damaged his personal and surrounding property. Id. ¶ 85. Under Texas

18

law, Johnston cannot recover damages to his refrigerator or his RV, products that he received as an

19

integrated whole. See Mem’l Hermann Healthcare Sys. Inc. v. Eurocopter Deutschland, GMBH,

20

524 F.3d 676, 678 (5th Cir. 2008) (prohibiting post-sale negligence claims against a helicopter

21

manufacturer where the aircraft’s door separated and struck the machine’s rotor blades); American

22

Eagle Ins. Co. v. United Technologies Corp., 48 F.3d 142, 144–45 (5th Cir.1995) (denying

23

recovery for damage to an aircraft’s hull caused by a defective engine); Alcan Aluminum Corp.,

24

133 F. Supp. at 503–05.12 Johnston can, however, proceed with his negligence claims to the

25
12

26
27
28

If it were considering the question de novo, the Court might question whether the “component
part” analysis should extend to the entirety of a complex, home-like product like a residential
vehicle, where the allegedly defective refrigerator is more like a furnishing than a faulty piece of
wire or combine wheel. But the Court’s narrow task here is to predict what Texas state courts
would do “if faced with the issue.” Alcan Alumninum Corp., 133 F. Supp. 2d at 505. Given the
above-cited decisions applying the economic loss rule in cases involving defective parts of
30

1

extent that he seeks damage for his “personal property and surrounding property.” See Signal Oil

2

& Gas Co., 572 S.W.2d at 325 (allowing for recovery of economic losses to surrounding real

3

property); Murray, 97 S.W.3d at 893 (permitting tort claims for fire damage to personal property

4

inside a truck integrating the defective component).

5

Byers, like Johnston, alleges that he purchased his RV already installed with a defective

6

Dometic refrigerator. FAC ¶ 63. But Byers alleges damage only to his Dometic refrigerator as a

7

result of Dometic’s negligence, not to his personal or real property. Id. ¶ 69. Texas’s economic

8

loss doctrine therefore entirely bars Byers’s negligence claim.

9
10

b. Goehle (Washington)
As with its OPLA preemption challenge, Dometic levies an equally cursory preemption

United States District Court
Northern District of California

11

attack against Goehle’s negligence claim. See Mot. at 27. Rather than rebut Dometic’s

12

preemption argument as it applies to Goehle, however, Plaintiffs effectively concede the point,

13

stating that the negligence claim “may be preempted” by the Washington Products Liability Act

14

(“WPLA”) to the extent that Goehle’s claim is a “product liability claim seeking to remedy harm

15

other than economic loss.” Opp. at 28 n.209. While Plaintiffs suggest that “Goehle asserts a

16

WPLA claim as an alternative to the negligence claim” should the Court find the negligence claim

17

preempted, Plaintiffs cannot state new causes of action not raised in the pleadings via its

18

opposition brief. The Court therefore dismisses Goehle’s common law negligence claim as

19

preempted.

20

iv.

Unjust Enrichment Claims

21

Dometic argues that there is no independent cause of action for unjust enrichment under

22

Texas law. Mot. at 28. Byers and Johnston respond that a court should not dismiss a claim for

23

unjust enrichment as duplicative of other claims. Opp. at 29–30. In Hancock v. Chicago Title

24

Insurance Co., 635 F. Supp. 2d 539, 560–61 (N.D. Tex. 2009), the court dismissed the plaintiffs’

25

unjust enrichment claims on the ground that under Texas law, unjust enrichment is not an

26

independent cause of action, but rather a general theory of recovery for an equitable action seeking

27
28

helicopters, cars and airplanes, the Court feels compelled to conclude that the Texas courts would
find that the rule bars a substantial part of Johnston’s claim here.
31

1

restitution.13 The Court finds Hancock persuasive. On the face of the complaint, Byers and

2

Johnston are seeking to assert unjust enrichment as an independent cause of action. See FAC ¶¶

3

400–08. Dismissal of the claim is therefore warranted.

4

In addition, Dometic argues that both Young and Goehle fail to adequately plead unjust

5

enrichment under Ohio and Washington law, respectively. Mot. at 28–29. The opposition does

6

not respond to this argument, making no mention of either Young or Goehle and citing no case

7

law from either state. Opp. at 29–30. The court construes this silence as a concession of

8

Dometic’s argument. See Linder v. Golden Gate Bridge, Highway & Transp. Dist., No. 4:14-cv-

9

03861 SC, 2015 WL 4623710, at *4 (N.D. Cal. Aug. 3, 2015) (dismissing the plaintiff’s claim
because his opposition brief did not address the defendants’ argument in their opening brief); GN

11
United States District Court
Northern District of California

10

Resound A/S v. Callpod, Inc., No. C 11-04673 SBA, 2013 WL 1190651, at *5 (N.D. Cal. Mar. 21,

12

2013) (construing failure to respond to the defendant’s argument as a concession at to that

13

argument); Stichting Pensioenfonds ABP v. Countrywide Fin. Corp., 802 F. Supp. 2d 1125, 1132

14

(C.D. Cal. 2011) (“[I]n most circumstances, failure to respond in an opposition brief to an

15

argument put forward in an opening brief constitutes waiver or abandonment in regard to the

16

uncontested issue.” (quotation marks omitted)); Marziano v. City of Marin, No. C-10-2740 EMC,

17

2010 WL 3895528, at *4 (N.D. Cal. Oct. 4, 2010) (“[T]he Court views [the plaintiff’s] failure to

18

oppose the argument as a concession that the [claim at issue] should be dismissed.”) Accordingly,

19

dismissal of Young and Goehle’s unjust enrichment claims are warranted.

20

v.

Strict Liability Claims

Finally, the Court addresses Dometic’s argument that Young, Byers, Johnston, and Goehle

21
22

fail to adequately plead their strict liability claims. See Mot. at 29–30. Specifically, Dometic

23

argues that these plaintiffs fail to adequately allege that a feasible and safer alternative design was

24

available when their refrigerators left Dometic’s control. See id. at 30. This requirement is

25

recognized by Ohio law. See Ohio Rev. Code Ann. § 2307.75 (“A product is not defective in

26
13

27
28

Although Hancock was decided on a motion for summary judgment, a federal court has
followed the opinion’s reasoning when assessing whether there was an independent cause of
action for unjust enrichment in the context of a motion to dismiss. See Roach v. Berland, No.
3:13-cv-4640-D, 2015 WL 5097987, at *2 (N.D. Tex. Aug. 31, 2015).
32

1

design or formulation if, at the time the product left the control of its manufacturer, a practical and

2

technically feasible alternative design or formulation was not available that would have prevented

3

the harm for which the claimant seeks to recover compensatory damages without substantially

4

impairing the usefulness or intended purpose of the product.”); Schwartz v. Honeywell Int’l., Inc.,

5

66 N.E.3d 118, 131 (Ohio 2016) (“A product will not be considered defective in design unless the

6

plaintiff demonstrates that a practical and technically feasible alternative design to the product was

7

available that would have prevented the harm for which the plaintiff seeks to recover, without

8

substantially impairing the usefulness of the product.”), appeal allowed, 148 Ohio St. 3d 1442

9

(Ohio 2017). So too under Texas law. See Tex. Civ. Prac. & Rem. Code § 82.005(a) (“In a
products liability action in which a claimant alleges a design defect, the burden is on the claimant

11
United States District Court
Northern District of California

10

to prove by a preponderance of the evidence that . . . there was a safer alternative design.”); id. §

12

82.005(b) (“In this section, ‘safer alternative design’ means a product design other than the one

13

actually used that in reasonable probability: (1) would have prevented or significantly reduced the

14

risk of the claimant’s personal injury, property damage, or death without substantially impairing

15

the product’s utility; and (2) was economically and technologically feasible at the time the product

16

left the control of the manufacturer or seller by the application of existing or reasonably

17

achievable scientific knowledge.”); Sims v. Kia Motors of Am., Inc., 839 F.3d 393, 399 (5th Cir.

18

2016) (“Texas . . . requires plaintiffs in design defect cases to show that there was a safer

19

alternative design that Defendants could have used.”). Washington applies a similar version of the

20

rule. Wash. Rev. Code 7.72.030(1)(a) (“A product is not reasonably safe as designed, if, at the

21

time of manufacture, the likelihood that the product would cause the claimant’s harm or similar

22

harms, and the seriousness of those harms, outweighed the burden on the manufacturer to design a

23

product that would have prevented those harms and the adverse effect that an alternative design

24

that was practical and feasible would have on the usefulness of the product. . .”).

25

The refrigerators of Young, Byers, and Johnston apparently left Dometic’s control no later

26

than 2002, 2008, and 2011, respectively. See FAC ¶ 46 (Young: 2002 model RV); id. ¶ 63 (Byers:

27

2011 model RV); id. ¶ 79 (Johnston: 2008 model RV). Plaintiffs’ allegations as to the existence of

28

a safer and feasible alternative design are largely based upon Atwood’s marketing and sale of
33

1

helium-based refrigerators, which allegedly do not carry the same “innate risk of explosive fire.”

2

See id. ¶ 157. While Dometic did not acquire Atwood until 2014, Atwood began marketing and

3

selling the refrigerators in or about 2001. Id. Plaintiffs allege that “[w]hile Dometic was certainly

4

aware of, and able to develop a safer refrigerator system since at least 2001 when Atwood was

5

openly marketing the technology, there can be no question that at least as of 2014, when Dometic

6

acquired Atwood, Dometic in fact possessed reasonable, safer alternative technology to the

7

Defective Gas Absorption Refrigerators.”). Id. ¶ 159. Dometic selectively quotes the second

8

portion of this statement to argue that Plaintiffs have not adequately pled the existence of a

9

feasible and alternative design prior to 2014. See Mot. at 30. But considering the relevant
allegations in full, the Court finds that Young, Byers, and Johnston have plausibly alleged the

11
United States District Court
Northern District of California

10

existence of a safer and feasible alternative design at the time that their allegedly defective

12

refrigerators left Dometic’s control. See FAC ¶¶ 149(k), 156–59, 168, 398. Consequently, the

13

Court finds that dismissal of their strict liability claims under Ohio and Texas law is not warranted

14

at this stage of the proceedings.14
In contrast, both parties acknowledge that Goehle’s RV bore a 2000 model year. Mot. at

15
16

29; Opp. at 30 n.21. This predates Atwood’s purportedly safer design. Because Plaintiffs’ fail to

17

include factual allegations regarding a pre-2001 alternative product that could have prevented the

18

harms alleged, the Court dismisses Goehle’s strict products liability claim.

19

IV.

LEAVE TO AMEND
Where dismissal is appropriate under Rule 12(b)(1), a court should grant leave to amend

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21

“unless it is clear . . . that the complaint could not be saved by any amendment.” Maya, 658 F.3d

22

at 1072 (quotation marks omitted). Likewise, if dismissal is appropriate under Rule 12(b)(6), a

23

court “should grant leave to amend even if no request to amend the pleading was made, unless it

24

determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v.

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26
27
28

14

Dometic argues that the economic loss doctrine bars Young, Byers, and Johnston from
recovering in strict liability for “purely economic” injuries. Mot. at 30. To the extent that Byers
and Johnston allege strict products liability damages co-extensive with those flowing from their
negligence claims, Byers and Johnston can recover under either tort theory as set forth in Part
III.E.iii for the reasons provided therein. See, e.g., American Eagle Ins. Co., 48 F.3d at 144–45.
34

Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (quotation marks and citation omitted). Applying

2

these standards, the Court grants leave to amend as to all claims that are dismissed, except for the

3

standalone unjust enrichment cause of action asserted by Byers and Johnston, which is barred as a

4

matter of law and therefore could not possibly be cured by the allegation of other facts. See Lopez,

5

203 F.3d at 1130.

6

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United States District Court
Northern District of California

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1

V.

CONCLUSION

2

For the forgoing reasons, the Court GRANTS IN PART and DENIES IN PART

3

Dometic’s motion to dismiss as summarized in the table below. Plaintiffs must file any amended

4

complaint within 28 days of the date of this Order. In addition to the “clean” version of the

5

second amended complaint, such a filing shall also include a “redlined” version clearly indicating

6

all changes.

7

California Claims

Disposition

8

Papasan

All Claims

9

Goehle

Violation of Washington CPA
Unjust Enrichment
Negligence
Strict Products Liability

Young

Violation of OCSPA
Breach of Implied Warranty of Merchantability
Unjust Enrichment
Negligence
Strict Products Liability

Washington Claims

10

United States District Court
Northern District of California

11
12

Disposition
Not dismissed.
Dismissed with leave to amend.
Dismissed with leave to amend.
Dismissed with leave to amend.

Ohio Claims

13
14
15

Dismissed with leave to amend.

Disposition

Texas Claims
Byers
Johnston

16

Disposition

Violation of DTPA
Breach of Implied Warranty of Merchantability
Fraud by Concealment

17
Strict Products Liability

18
Unjust Enrichment
Negligence

19
20
21
22
23
24
25

Florida Claims
Vollbergs

Dismissed with leave to amend.
Dismissed with leave to amend.
Dismissed with leave to amend.
Not dismissed.
Dismissed with leave to amend.
Dismissed with leave to amend as set forth in Part
III.E.i.b.
Not dismissed.
Dismissed with leave to amend as set forth in Part
III.E.i.b.
Dismissed with leave to amend as set forth in Part
III.E.v.
Dismissed without leave to amend.
Dismissed with leave to amend as set forth in Part
III.E.iii.a.

Disposition

All Claims

Dismissed with leave to amend.

IT IS SO ORDERED.
Dated: 10/27/2017
______________________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge

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