MacDonald v. Ford Motor Co., Case No. 13–cv–02988–JST

142 F.Supp.3d 884

Jean MacDonald, et al., Plaintiffs,

v.Ford Motor Company, Defendant.

Case No. 13–cv–02988–JST

United States District Court, N.D. California.

Signed November 2, 2015

Robert Kenneth Friedl, Tarek H. Zohdy, Arvin Ratanavongse, Cody Robert Padgett, David Lishian Cheng, Jordan L. Lurie, Capstone Law APC, Los Angeles, CA, for Plaintiffs.

Amir M. Nassihi, Shook Hardy & Bacon L.L.P., San Francisco, CA, John Mark Thomas, David Matthew George, Krista L. Lenart, Dykema Gossett PLLC, Ann Arbor, MI, James Powell Feeney, Dykema Gossett PLLC, Bloomfield Hills, MI, for Defendant.

ORDER GRANTING PLAINTIFFS' MOTION FOR ATTORNEYS' FEES

JON S. TIGAR, United States District Judge

Before the Court is Plaintiffs' Motion for Attorneys' Fees. ECF No. 69. For the reasons set forth below, the Court will grant the motion.

I. BACKGROUND

A. Parties and Claims

Plaintiffs Jean MacDonald, Veronica Aguirre, and Brian Barbee bring this putative class action on behalf of individuals who purchased or leased 2005–2008 Ford Escape Hybrid vehicles and/or 2006–2008 Mercury Mariner Hybrid vehicles ("Class Vehicles"). ECF No. 27. Plaintiffs allege that Class Vehicles equipped with the Motor Electronic Cooling System ("MECS") contain defective coolant pumps. Plaintiffs allege that the defect caused abrupt loss of power, often at highway speeds, and consequently presented a safety risk to drivers. ECF No. 27 ¶ 5. Plaintiffs further allege that Defendant Ford Motor Company knew or should have known about the defect and failed to inform consumers. Id. ¶ 15.

B. Chronology of the Case

1. Demand Letters, Complaints, and Motions to Dismiss

On June 23, 2013, prior to filing the lawsuit, Plaintiffs served Ford with a pre-litigation demand letter pursuant to the California Legal Remedies Act ("CLRA"). ECF No. 69 at 5. Plaintiffs filed their complaint five days later on June 28, 2013. ECF No. 1. Plaintiffs served a second formal demand letter requesting that Ford remedy the alleged defect on July 18, 2013. ECF No. 69–4. Plaintiffs then filed a first amended complaint on September 5, 2013. ECF No. 17. On September 19, 2013, Ford filed a motion to dismiss. ECF No. 19. After meeting and conferring with Ford, Plaintiffs filed a second amended complaint on October 24, 2013. ECF Nos. 24, 27. Ford then filed a motion to dismiss Plaintiffs' second amended complaint on November 14, 2013. ECF No. 28.

On March 31, 2014, the Court granted in part and denied in part Ford's motion to dismiss Plaintiffs' second amended complaint. ECF No. 43. The Court dismissed Plaintiffs' claims under the Song–Beverly and Magnuson–Moss Warranty Acts, but left intact Plaintiffs' remaining CLRA and California Unfair Competition Law ("UCL") claims. Id.

On May 6, 2014, Ford filed an answer to Plaintiffs' second amended complaint and the Parties commenced discovery. ECF No. 47. On July 10, 2014, Plaintiffs sent Ford a third settlement demand letter. ECF No. 69 at 10.

2. Ford's Internal Activity Regarding the MECS Defect

Much of Ford's evidence in opposition to this motion comes from Kenneth Lilly, an Early Warning Data Trend Specialist in Ford's Automotive Safety Office ("ASO"). Lilly first became aware of the stalling problem with the Class Vehicles in 2009, when he first began to look at data related to the MEC and trends in that data. ECF No. 88–2 at 143. Specifically, Lilly looked at the number of paid warranty claims per vehicle sold to determine whether rates of complaint were unusually high. Id. at 143–44. He determined at that time that the Ford Escape had an above average stall rate. Id. at 147–48. But he took no action.

In February 2014, Transport Canada¹ contacted an employee of Ford's Canadian subsidiary regarding a stalling complaint for one of the Class Vehicles. See ECF No. 71–6, Ex. D. The Transport Canada field investigator described an incident where a 2008 Ford Escape Hybrid failed to accelerate while leaving a parking lot and then stopped. Id. Transport Canada also sent the Ford employee copies of complaints made to the NHTSA that described similar stalling with Ford Escape Hybrids. Id. The information from Transport Canada then "made its way" to Ford's ASO, and then to Lilly.² ECF No. 71–2 at 10.

Although Ford received the notice from Transport Canada in February 2014, Lilly did not look into the MECP issue until late April 2014 because of his workload. ECF No. 71–4, Ex. B, Lilly Dep. 170:4–11; 184:20–23. When he finally looked at the stalling issue, he used a different strategy to review the data for the Escape Hybrid because, based on assessments he had done on other warranty topics, Lilly now knew that dealers made coding errors. Id. at 134:7–135:12. To correct for these errors, Lilly looked at the part numbers identified in the warranty claims. According to Ford, this new way of reviewing the data caused Lilly to realize the stalling issue was more rampant than Ford had previously believed. Id. at 170:12–171:16. Based on this fact alone—because he was unaware of the present lawsuit—Lilly reported the stalling issue to Ford's Critical Concern Review Group. Id. at 171:13–172:6.

Ford contends that its personnel then "reviewed additional data and developed an action plan." ECF No. 71–2 at 11. Ford, however, does not identify the data or detail the contents of the plan. On August 15, 2014, Ford's Technical Review Group recommended a safety recall to replace the MECP and on August 25, 2014, Ford's Field Review Committee approved the recall. Id. The person or people who actually made the recall decision, whoever they were, did not provide testimony.

3. Discovery

The Parties exchanged initial disclosures on April 16, 2014. ECF No. 48 at 6. Ford did not disclose the existence of any analysis or investigation regarding the alleged defect. ECF No. 69 at 9. Ford did not identify Kenneth Lilly or disclose Ford's correspondence with Transport Canada, regarding that agency's inquiry about a stalling complaint. ECF No. 69 at 9. Ford now contends it did not need disclose this information regarding the alleged defect because the information requested did not relate to any of Ford's claims or defenses. See ECF No. 71–2 at 15.

Ford served its response to Plaintiffs' first set of interrogatories and requests for production on July 9, 2014. ECF No. 69 at 9. Again, Ford did not identify Kenneth Lilly, did not disclose the inquiry from Transport Canada, and otherwise did not identify any analysis or investigations germane to the defect alleged in the second amended complaint.

4. Ford's Recall

On September 2, 2014, Ford informed the National Highway Traffic Safety Administration ("NHTSA") of its intent to perform a voluntary safety recall (Recall No. 14V–526). ECF No. 56 at 1. In its notice, Ford stated:

The vehicle may experience a sudden partial or full loss of motive power while driving caused by the FMEM strategy during a high temperature condition within the electronics cooling system. If this occurs, the vehicle's braking and steering systems will continue to operate normally. However, this condition can result in a sudden stall-like condition while driving. An engine stall without warning while driving may increase the risk of a crash.

ECF No. 70–6, Ex. E.

Ford offered to notify owners of the Class Vehicles of the potential pump failure and instruct them to take the affected vehicle to a dealer. Id. Ford also offered to replace all of the defective Motor Electronic Cooling Pumps ("MECP") free of charge and reimburse out of pocket repairs for the MECP defect prior to the date of the safety recall notification. Id.

Ford reported the following chronology of events to the NHTSA: in April 2014, Ford began investigating the MECS defect when it "identified reports related to driveability issues, instrument cluster messages instructing the driver to stop the vehicle, and loss of power." Id. During May of 2014, Ford's Critical Concern Review Group then analyzed the issue. Id. From June to August 2015, Ford continued to review data "to understand the cause of the driveability and loss of power reports." Id. On August 25, 2014, the Ford Field Review Committee reviewed the concern and approved the recall. Id. Finally, on September 2, 2014, Ford notified the NHTSA of its intent to perform a safety recall. Id.

Ford's voluntary recall took place over fourteen months after Plaintiffs' sent demand letters requesting the relief offered by the recall and after Plaintiffs' filed this lawsuit. Because the recall moots many of Plaintiffs' claims, Plaintiffs agree that the only issue at the present time is whether Plaintiffs are entitled to attorneys' fees under a catalyst theory. ECF No. 56 at 2.

II. LEGAL STANDARD

California's Code of Civil Procedure section 1021.5 provides an exception to the general rule that each party to a lawsuit bears its own attorneys' fees. See Graham v. DaimlerChrysler Corp., 34 Cal.4th 553, 565, 21 Cal.Rptr.3d 331, 101 P.3d 140 (2004). Section 1021.5 provides that a court may award attorneys' fees to a successful party when the action has resulted in the enforcement of an important right affecting the public interest if:

(a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.

CAL. CIV. PROC. CODE § 1021.5.

To be entitled to an award of attorneys' fees under section 1021.5, a plaintiff need not obtain a court-ordered change in the defendant's behavior; it is enough when a plaintiff's action motivates the defendant to provide the primary relief sought. Graham, 34 Cal.4th at 567, 21 Cal.Rptr.3d 331, 101 P.3d 140 (citations omitted). Because it can be difficult to prove causation when a plaintiff seeks to recover under this theory and "action is taken by the...