Johnson v. Nissan N. Am., Inc.

272 F.Supp.3d 1168

Sherida JOHNSON, et al., Plaintiffs,

v.NISSAN NORTH AMERICA, INC., Defendant.

Case No. 17–cv–00517–WHO

United States District Court, N.D. California.

Signed August 29, 2017

Crystal Gayle Foley, Simmons Hanly Conroy LLC, El Segundo, CA, Mitchell M. Breit, Paul J. Hanly, Jr., Simmons Hanly Conroy LLC, New York, NY, Adam A. Edwards, Pro Hac Vice, Gregory F. Coleman, Lisa A. White, Pro Hac Vice, Mark E. Silvey, Pro Hac Vice, Greg Coleman Law PC, Knoxville, TN, for Plaintiffs.

Amir M. Nassihi, Andrew L. Chang, Shook Hardy & Bacon L.L.P., San Francisco, CA, Mr. William Roth Sampson, Pro Hac Vice, Shook, Hardy and Bacon LLP, Kansas City, MO, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

William H. Orrick, United States District Judge

INTRODUCTION

Plaintiffs allege that the panoramic sunroofs installed in the Nissan vehicles they purchased spontaneously explode and that Nissan refuses to repair, replace, or otherwise compensate plaintiffs with respect to these explosions. They assert a host of claims on behalf of themselves and a California, New York, and nationwide class against defendant Nissan North America, Inc. (Nissan), which now moves to dismiss all claims.¹ Although plaintiffs do not have standing to bring a nationwide class and do not plausibly allege an implied warranty claim under California state law, on all other issues I deny Nissan's motion.

BACKGROUND

Nissan manufactures, markets, and distributes automobiles in the United States. First Amended Complaint ("FAC") ¶ 21 [Dkt No. 32]. Since at least 2008, Nissan has offered vehicles with an optional upgrade of a factory-installed panoramic sunroof. Id. ¶ 23. The vehicles with factory-installed panoramic sunroofs at issue in this litigation are Rogue, Maxima, Sentra, Pathfinder, and Altima models from 2008 to the present; Murano models from 2009 to the present; and Juke models from 2011 to the present (collectively, the "Class Vehicles"). Id. ¶ 22. The panoramic sunroofs are considered luxury and expensive upgrade options that can cost upwards of one thousand dollars to purchase or repair. Id. ¶ 61. Plaintiffs allege that various design and manufacturing decisions have weakened the integrity of the panoramic sunroofs, increasing the probability for the glass to be compromised and result in catastrophic failure, often "explosively." Id. ¶¶ 32–33. These design and manufacturing decisions include using tempered glass, thinner glass, ceramic enamels, and increased application of pressure during installation. Id. ¶¶ 31–40. Explosions of the panoramic sunroofs pose various dangers, including cuts from shards of glass, damage to the interior of the vehicles, and distraction or startling while driving that could result in car accidents. Id. ¶ 63.

At least 105 Nissan vehicle owners have reported to the National Highway Traffic Safety Administration that their Nissan panoramic sunroofs have shattered. FAC ¶¶ 41–42. These complaints have been lodged since as early as 2008. Id. ¶48. Plaintiffs allege that Nissan knows about the complaints of shattering panoramic sunroofs since at least 2013. Id. ¶¶ 44, 49–52. Nissan conceals and fails to warn consumers about such complaints and the risks associated with panoramic sunroofs. Id. ¶¶ 69–72.

Plaintiff Sherida Johnson purchased a certified pre-owned 2016 Nissan Maxima with a panoramic sunroof from CarMax Auto Superstores California, LLC in August 2016. FAC ¶ 85. While she was commuting to work in that vehicle, the panoramic sunroof shattered. Id. ¶¶ 90–91. Ms. Johnson was not physically injured. The vehicle was within the limits of the three-year or 36,000–mile warranty. Id. ¶¶ 87, 92. However, an employee from a Nissan dealership informed Ms. Johnson that the panoramic sunroof shattering was not covered under the warranty, and Ms. Johnson paid some $185 (after reimbursements from her insurance company) to repair it. Id. ¶¶ 98–103. Similarly, plaintiff Subrina Seenarain purchased a certified pre-owned 2014 Nissan Maxima with a panoramic sunroof from Nissan of Garden City in Hempstead, Nassau County, New York. Id. ¶ 122. Her panoramic sunroof shattered while she was driving, and she too was told by a Nissan representative that the damage was not covered by her warranty. Id. ¶¶ 127–31. Ms. Seenarain paid over $1,000 to repair the damage. Id. ¶ 133.

Plaintiffs now bring several claims individually and on behalf of California, New York, and nationwide classes, representing purchasers and lessees of Class Vehicles.² These claims are for violation of the Magnuson–Moss Warranty Act ("MMWA"), individually and on behalf of the nationwide class; unjust enrichment, individually and on behalf of the nationwide class; violation of California's Unfair Competition Law ("UCL"), for Ms. Johnson individually and on behalf of the California class; violation of California's Consumer Legal Remedies Act ("CLRA"), for Ms. Johnson individually and on behalf of the California class; violation of the Song–Beverly Consumer Warranty Act, for Ms. Johnson individually and on behalf of the California class; deceptive acts and practices under New York General Business Law Section 349, for Ms. Seenarain individually and on behalf of the New York class; breach of express warranty, for Ms. Seenarain individually and on behalf of the New York class; breach of implied warranty of merchantability, for Ms. Seenarain individually and on behalf of the New York class; and false advertising under the New York General Business Law Section 350, for Ms. Seenarain individually and on behalf of the New York class.³ Nissan moves to dismiss all of plaintiffs' claims on several grounds.

LEGAL STANDARD

I. Rule 12(b)(1)

Under Federal Rule of Procedure 12(b)(1), a district court must dismiss a complaint if it lacks subject matter jurisdiction to hear the claims alleged in the complaint. Fed. R. Civ. P. 12(b)(1). "Standing is a threshold matter central to our subject matter jurisdiction." Bates v. United Parcel Serv., Inc. , 511 F.3d 974, 985 (9th Cir. 2007). Standing addresses the constitutional requirement that a plaintiff allege a case or controversy, which at an "irreducible minimum," requires three elements: "(1) an injury that is (2) fairly traceable to the defendant's allegedly unlawful conduct and that is (3) likely to be redressed by the requested relief." Lujan v. Defenders of Wildlife , 504 U.S. 555, 590, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

II. Rule 12(b)(6)

Under Federal Rule of Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible when the plaintiff pleads facts that "allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation omitted). While courts do not require "heightened fact pleading of specifics," a plaintiff must allege facts sufficient to "raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 570, 127 S.Ct. 1955. In deciding whether the plaintiff has stated a claim upon which relief can be granted, the court accepts the plaintiff's allegations as true and draws all reasonable inferences in favor of the plaintiff. See Usher v. City of Los Angeles , 828 F.2d 556, 561 (9th Cir. 1987). The court is not required to accept as true "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig. , 536 F.3d 1049, 1055 (9th Cir. 2008).

Claims sounding in fraud or mistake are subject to the heightened pleading standard of Federal Rule of Civil Procedure 9(b), which requires that such claims "state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). This includes CLRA and UCL claims that are grounded in fraud, as well as those aspects of the claims that may be grounded in unfairness or unlawfulness. See Kearns v. Ford Motor Co. , 567 F.3d 1120, 1125–27 (9th Cir. 2009) (holding that, in a case arising under the UCL alleging both fraud and unfairness, "if the claim is said to be ‘grounded in fraud’ ... the pleading of that claim as a whole must satisfy the particularity requirement of Rule 9(b)"). To satisfy this standard, a plaintiff must identify the "who, what, when, where, and how" of the misconduct charged, as well as an explanation as to why the statement or omission complained of was false or misleading. Vess v. Ciba–Geigy Corp. USA , 317 F.3d 1097, 1106 (9th Cir. 2003). The allegations "must be specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong." Swartz v. KPMG LLP , 476 F.3d 756, 764 (9th Cir. 2007).

If the court dismisses a complaint, it "should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith , 203 F.3d 1122, 1127 (9th Cir. 2000). In making this determination, the court should consider factors such as "the presence or absence of undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party and futility of the proposed amendment." See Moore v. Kayport Package Express , 885 F.2d 531, 538 (9th Cir. 1989).

DISCUSSION

I. Whether Named Plaintiffs Have Standing To Maintain a Nationwide Class Action

The first question I must address is two-fold: whether it is appropriate to evaluate the named plaintiffs' standing on behalf of the putative nationwide class at...