Philips v. Ford Motor Co.

WILLIAM PHILIPS, et al., Plaintiffs, v. FORD MOTOR COMPANY, Defendant.

Case No. 14-CV-02989-LHK

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

February 22, 2016

ORDER DENYING MOTION TO DISMISS FOR MOOTNESS AND LACK OF STANDING

Re: Dkt. No. 84

Plaintiffs William Philips, Jaime Goodman, and Alison Colburn (collectively, "California Plaintiffs")¹ bring this action against Defendant Ford Motor Company ("Defendant" or "Ford"). Before the Court is Ford's motion to dismiss California Plaintiffs' second amended complaint for mootness and lack of standing. See ECF No. 55 ("SAC"); ECF No. 84 ("Mot."). The Court findsthis matter suitable for decision without oral argument pursuant to Civil Local Rule 7-1(b) and thus VACATES the motion hearing set for February 25, 2016, at 1:30 p.m. The case management conference, currently scheduled for February 25, 2016, at 1:30 p.m., remains as set. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court DENIES Ford's motion to dismiss.

I. BACKGROUND

A. Factual Background

California Plaintiffs seek to represent a class of statewide consumers who purchased or leased Ford Fusion vehicles, model years 2010 through 2014, or Ford Focus vehicles, model years 2012 through 2014 (collectively, the "Vehicles").² California Plaintiffs allege that these Vehicles³ are equipped with a defective Electronic Power Assisted Steering ("EPAS") system. SAC ¶ 1. The following chart summarizes California Plaintiffs' purchasing information:

Plaintiff

Vehicle

Site of Purchase

Date of Purchase

William Philips

2011 Ford Fusion (used)

Salinas Valley Ford

March 2012

Jaime Goodman

2011 Ford Fusion (new)

Future Ford of Clovis

October 2010

Alison Colburn

2010 Ford Fusion (new)

Galpin Ford

January 2010

Id. ¶¶ 32-54. Power steering systems supplement the torque that the driver must apply to the steering wheel, thus making it easier for the driver to turn the wheel. Id. ¶ 76. Instead of using a traditional power steering pump, Ford's EPAS system uses a power steering control motor, electronic control unit, torque sensor, and steering wheel position sensor. Id. ¶ 2. California Plaintiffs allege, however, that Ford's EPAS system suffers from a "systemic defect" that "renders the system prone to sudden and premature failure during ordinary and foreseeable driving situations." Id. This defect, California Plaintiffs contend, causes drivers of the Vehicles to "experience significantly increased steering effort and an increased risk of losing control of theirvehicles when the EPAS system fails" and "defaults to manual steering." Id. ¶¶ 3, 101.

In support of these allegations, California Plaintiffs rely upon three categories of evidence: (1) their own experiences with EPAS failure, (2) a National Highway Traffic Safety Administration's ("NHTSA") investigation into the EPAS system of the Ford Explorer, a vehicle not at issue in this action, and (3) complaints to NHTSA by other owners and lessees about power steering failures in the Vehicles.

1. California Plaintiffs' Personal Experience with EPAS Failure

i. Philips

As to the first category of evidence, California Plaintiffs allege that the EPAS system in each of their vehicles has failed. Specifically, William Philips ("Philips") states that he "reviewed Ford's promotional materials and other information," and that he "would not have purchased his 2011 Ford Fusion, or would not have paid the purchase price charged," if Ford "had disclosed the EPAS system defects and failures." Id. ¶ 34. Philips also says he experienced "problems with the steering system in his Fusion." Id. ¶ 36. After lodging multiple complaints with Ford, Philips was informed during a dealership visit in 2013 "that it would cost approximately $2,000 to fix the problem" through an EPAS system replacement. Id. According to Philips, "Ford offered to pay 50%." Id. Philips declined to repair his vehicle at that time. In July 2015, Philips received a notice from Ford alerting him that his "vehicle was subject to a safety recall," and asking Philips to take his vehicle to a dealership for further inspection. ECF No. 97-5 at 192. The details of Ford's recall are discussed at greater length below. After receiving this notice, Philips brought his vehicle in for an inspection, at which time the Ford dealership replaced the EPAS system in Philips' vehicle.

ii. Goodman

Jaime Goodman ("Goodman") claims that, prior to "purchasing her 2011 Ford Fusion," she "(a) viewed television advertisements concerning the vehicles; (b) viewed material concerning the Fusion on Ford's website; (c) reviewed the window sticker on the vehicle she would purchase; and (d) received and reviewed a brochure concerning the Fusion." SAC ¶ 40. "The windowsticker," Goodman says, "indicated that the vehicle she would purchase was equipped with power steering." Id. "Nowhere in these materials did Ford disclose the EPAS system defects and failures," and had Ford done so, Goodman alleges that she "would not have purchased her 2011 Ford Fusion, or would not have paid the purchase price charged." Id. ¶¶ 40-41. In addition, Goodman claims that in 2014 she "began having intermittent problems with the steering system in her 2011 Ford Fusion and experienced difficulty steering." Id. ¶ 43. "The problems first occurred at low speeds, when the steering would lock up while she was attempting to park." Id.

Ultimately, Goodman "took [her] vehicle to a Ford dealership [in December 2014] and was told that it would cost $1,800 to fix the problem with the steering system." Id. As with Philips, the dealership recommended that the EPAS system in Goodman's vehicle be replaced. Although Goodman contended that her power steering problems were a safety issue, Ford refused to defray the costs of an EPAS system replacement. ECF No. 94-8 at 47. Citing financial hardship, Goodman declined to undertake any repairs to her vehicle at that time, and continued to experience problems with her vehicle.

In July 2015, Goodman received "a letter from Ford Motor Company concerning the 2011 Fusion and a recall for the [Fusion's] EPAS [system]." Id. at 49. Pursuant to this letter, Goodman took her vehicle to a Ford dealership in August 2015, with Goodman expecting that Ford would now replace the EPAS system in her vehicle free of charge. During this August 2015 visit, however, the dealership declined to perform an EPAS system replacement and instead simply reprogrammed the computer in Goodman's vehicle.

In October 2015, Goodman once again experienced problems with her vehicle's power steering. Specifically, while attempting to pull out of the parking lot at work, Goodman stated that she "could not turn the vehicle" and had to "turn[] [the vehicle] off." Id. at 52. "On November 2, 2015, Ford's counsel contacted Plaintiffs' counsel to inform them that based on a review of the attached service records . . . , it appears that Jaime Goodman is eligible for a steering gear replacement." ECF No. 94-6 at 10. Goodman thereafter scheduled a service appointment for November 12, 2015. During this November 12, 2015 appointment, Goodman was met by a Fordengineer from Detroit, Michigan, sent specifically to inspect Goodman's vehicle, and by a member of Ford's counsel. "A few hours after dropping off [her] vehicle," however, Goodman "received a call from a service associate . . . and was informed that . . . [her vehicle] was no longer eligible for a free replacement under Ford's recall program." ECF No. 95-4 at 2. After "Ford refused to replace [Goodman's] EPAS system on November 12, 2015," Plaintiffs' counsel once again reached out to Ford's counsel. Id. at 3. On November 24, 2015, Ford finally replaced the EPAS system in Goodman's vehicle.

iii. Colburn

Finally, prior to "purchasing her 2010 Ford Fusion," Alison Colburn ("Colburn") claims that, just like Goodman, she "(a) viewed television advertisements concerning the vehicles; (b) viewed material concerning the Fusion on Ford's website; (c) reviewed the window sticker on the vehicle she would purchase; and (d) received and reviewed a brochure concerning the Fusion," and that "[t]he window sticker indicated that the vehicle she would purchase was equipped with power steering." SAC ¶ 47. "Nowhere in these materials did Ford disclose the EPAS system defects and failures." Id. Had Ford done so, Colburn alleges that she "would not have purchased her 2010 Ford Fusion, or would not have paid the purchase price charged." Id. ¶ 48.

2. NHTSA Investigation into the Explorer

As to the second category of evidence, California Plaintiffs emphasize documents produced in connection with NHTSA's Ford Explorer investigation, which began on June 19, 2012. Id. ¶ 83. In response to NHTSA's request for information, Ford "produced a database containing 1,173 complaints" regarding loss of power steering, nine of which described "incidents that resulted in a crash." Id. ¶ 89. Ford also produced various internal e-mails which, California Plaintiffs allege, reveal that the Vehicles suffer from the same EPAS system defect as the Explorer and that Ford knew about the defect yet never disclosed it to the public or otherwise took corrective action. Id. ¶¶ 90-98.

3. Complaints to NHTSA Concerning Focus and Fusion Vehicles

As to the third category of evidence, California Plaintiffs provide a litany of testimonialsby other Ford owners complaining to NHTSA about alleged power steering failures in the Vehicles. Id. ¶¶ 104-32. The two dozen complaints California Plaintiffs detail in the SAC are, according to California Plaintiffs, a mere sampling of the hundreds of complaints that NHTSA received concerning EPAS failures in the Vehicles. See id. ¶ 104. For illustrative purposes, two such complaints are reproduced below.

On December 11, 2012, a vehicle owner reported a crash in a 2010 Ford Fusion. The Defective Vehicle lost power steering, traction control, and the ability to brake upon entering a

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