Ride Ducks Seattle LLC v. Ride Ducks Int'l LLC

647 F.Supp.3d 1049

RIDE THE DUCKS SEATTLE LLC, Plaintiff, v. RIDE THE DUCKS INTERNATIONAL LLC,Chris Herschend, Jane Doe Herschend, Herschend Family Entertainment Corporation,Brian Tracey, and Jane Doe Tracey, Defendants.

CASE NO. C19-1408 MJP

United States District Court, W.D. Washington, at Seattle

Signed December 23, 2022

Duncan K. Fobes, Patricia Kay Buchanan, Donald Guthrie, Nicholas Carlson, Sara B. Sutton, Patterson Buchanan Fobes & Leitch, Seattle, WA, for Plaintiff.

Rodney L. Umberger, Jr., Tyler J. Hermsen, Sumeer Singla, Williams Kastner & Gibbs, Seattle, WA, for Defendant Ride the Ducks International LLC.

R. Wayne Bond, Pro Hac Vice, Taylor English Duma LLP, Atlanta, GA, Rodney L. Umberger, Jr., Tyler J. Hermsen, Sumeer Singla, Williams Kastner & Gibbs, Seattle, WA, for Defendants Chris Herschend, Jane Doe Herschend.

Rodney L. Umberger, Jr., Tyler J. Hermsen, Sumeer Singla, Williams Kastner & Gibbs, Seattle, WA, Amit Digambar Ranade, Mallory L. Satre, Snell & Wilmer, Seattle, WA, for Defendant Herschend Family Entertainment Corporation.

Nicholas Carlson, Patricia Kay Buchanan, Donald Guthrie, Patterson Buchanan

Fobes & Leitch, Seattle, WA, for Defendants Brian Tracey, Jane Doe Tracey.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

Marsha J. Pechman, United States Senior District Judge

This matter comes before the Court on Defendants' Motion for Summary Judgment. (Dkt. No. 82.) Having reviewed the Motion, Plaintiff's Opposition (Dkt. No. 84), the Reply (Dkt. No. 90), and all supporting materials, and having held oral argument on December 21, 2022, the Court GRANTS the Motion.

BACKGROUND

Founded in 1997, Plaintiff Ride the Ducks Seattle ("Seattle") has operated tours using amphibious vehicles known as "duck" boats. In 2003, it entered into a licensing agreement with Defendant Ride the Ducks International LLC ("International") through which Seattle agreed to buy additional duck boats. (Ex. 4 to the Declaration of Rodney Umberger (Dkt. No. 83).) In 2005, as part of that relationship, Seattle purchased a stretch duck boat, referred to as Duck 6, that suffered an axle housing fracture that caused a fatal collision in September 2015. (Ex. 1 to the Declaration of Patricia K. Buchanan at 2135 (Dkt. No. 85).) In personal injury lawsuits commenced after the collision, both Seattle and International were found liable. Seattle was found forty percent at fault, while International was found to be sixty percent at fault. West v. RTDI, LLC, 18 Wn. App. 2d 1013, 2021 WL 2809609 at *1 (Div. 1 2021) (unpublished).

In 2019, Seattle filed this lawsuit, through which it pursues claims under the Washington Consumer Protection Act against Defendants International, Chris Herschend, and Herschend Family Entertainment Corporation (together "Defendants"). Seattle alleges that Defendants failed to disclose an axle housing defect at the time Seattle bought Duck 6 and failed to remedy the known defect before the 2015 collision. According to Seattle, these constitute unfair and deceptive acts that are actionable CPA violations. Seattle also argues that Defendants' conduct violated the Auto Dealer Practices Act (RCW 46.70), and are per se violations of the CPA. Defendants move for summary judgment on the CPA claims, arguing that Seattle cannot meet its burden under the CPA to show that these alleged failures constitute unfair or deceptive acts that affect the public interest or are per se violations. Defendants also argue that there is a lack of evidence of causation.

To contextualize Defendants' motion, the Court reviews the details about the purchase of Duck 6 and the history leading up to the 2015 collision, and then examines the procedural history of this case.

A. Factual Background

Seattle asserts that Defendants failed to disclose known defects related to the axle housing of stretch duck boats before Seattle purchased Duck 6 in 2005. Seattle points out that in 2003 and 2004, International had identified three different stretch ducks boats that experienced axle housing fractures. (Buchanan Decl. Ex. 5 at 1-2 (Dkt. No. 85-1 at 38-39).) "As a result of its inspections and examinations, [International] developed an axle housing repair to be implemented on all [International] stretch ducks refurbished by the company from Fall 2004 forward." (Id. at 2 (Dkt. No. 85-1 at 39).) This "repair" entailed installing a metal "tab" that was a sort of early-warning system to warn the operator that the axle housing was likely to fail. (Buchanan Decl. Ex. 6 at 2 (Dkt. No. 85-1 at 44); Buchanan Decl. Ex. 8 at 2 (Dkt. No. 85-1 at 72).) International refurbished Duck 6 and included the tab "repair." (Buchanan Decl. Ex. 5 at 2 (Dkt. No. 85-1 at 39).) But prior to the sale of Duck 6, International did not disclose to Seattle the purpose of the "tab" system or that it should be inspected. (Buchanan Decl. Ex. 6 at 3 (Dkt. No. 85-1 at 45).)

Seattle also asserts that before the 2015 collision involving Duck 6, Defendants did not remedy the known axle housing defect despite the axle failures of two different stretch duck boats that occurred in 2013. The first stretch duck incident occurred in July 2013, when a stretch duck suffered an axle failure in Missouri. (Buchanan Decl. Ex. 9 at 1-3 (Dkt. No. 85-1 at 76-78).) The second axle failure was discovered by Defendants in August 2013, when they were inspecting a different stretch duck in Missouri. (Buchanan Decl. Ex. 5 at 3 (Dkt. No. 85-1 at 40).) In response to these two discoveries, International developed a modification to replace the tab and issued a Service Bulletin that recommended front axle housing repair on all fifty-seven stretch duck boats, including Duck 6. (Buchanan Decl. Ex. 5 at 4 (Dkt. No. 85-1 at 41).) But according to Seattle, Defendants did not disclose the incidents leading to the Service Bulletin or the reason for proposed repairs. (Buchanan Decl. Ex. 7 at 4974, 4991-92, 5134-35 (Dkt. No. 85-1 at 56, 58-59, 67-68); id. Ex. 12 at 4061 (Dkt. No. 85-1 at 93).) And International did not inform the National Highway Traffic Safety Administration that it knew of the axle housing defect prior to the 2015 Duck 6 collision. (Buchanan Decl. Ex. 4 at ¶ 25 (Dkt. No. 85-1 at 19-20); id. Ex. 7 at 4974, 4991-92, 5134-35 (Dkt. No. 85-1 at 56, 58-59, 67-68).)

The Parties dispute whether the Service Bulletin put Seattle on notice of the need to fix the axle-housing defect before the 2015 collision. The Service Bulletin told licensees, such as Seattle, to perform the repair "[a]s soon as practical and prior to operating 2014." (Buchanan Decl. Ex. 5 at 4 (Dkt. No. 85-1 at 41).) And it informed licensees that they should perform daily visual inspections of the front wheels and remove any vehicle from service whose front wheels appeared vertically canted. (Id.) Seattle purportedly performed inspections and found no canted wheels on its stretch duck boats, including on Duck 6. (Buchanan Decl. Ex. 12 at 4097-98 (Dkt. No. 85-1 at 95-96).) The parties also dispute whether Seattle declined International's offer to help implement the repair or whether International failed to respond to Seattle's request for help. (Compare Umberger Decl. Ex. 10 at 5031 (Dkt. No. 83 at 106) with Buchanan Decl. Ex. 20 at 60-61 (Dkt. No. 134-35).)

B. Procedural History

The Court previously granted summary judgment in Defendants' favor on cross-motions for summary judgment. (Dkt. No. 64.) The Court concluded that a 2018 agreement between the Parties included a waiver of the CPA claims that Seattle pursued in this litigation. The Court also found the CPA could not be pursued due to a lack of evidence that the conduct at issue had the capacity to impact a substantial portion of the public. (Id. at 10.) The Parties then appealed. The Ninth Circuit reversed the Court's decision as to the waiver provision. (Dkt. No. 75.) And although the Ninth Circuit expressed no specific disagreement with the Court's analysis of the CPA claim, it concluded that the Court should have given the parties more opportunity to brief the merits of the claim and reversed the determination on the CPA and remanded for further proceedings. (Id. at 4-5.) The Court also discussed Defendants' cross claims against Brian Tracey, the CEO of Seattle, which had been dismissed as part of the Court's Order on the cross-motions for summary judgment on the waiver theory. The Ninth Circuit noted that because International failed to appeal that part of the decision, it lacked jurisdiction to review International's claim against Tracey. (Id. at 5-6.) The parties now dispute whether the Ninth Circuit's decision revitalized International's claims against Tracey. International contends in a footnote that its claims are actionable because the basis for the Court's dismissal has been reversed. (Mot. for SJ at 1 n.1.) But Seattle argues that International's claims remain dismissed because International failed to properly appeal the dismissal.

ANALYSIS

A. Legal Standard

Summary judgment is proper "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In determining whether an issue of fact exists, the Court must view all evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue of material fact exists where there is sufficient evidence for a reasonable factfinder to find for the nonmoving party. Id. at 248, 106 S.Ct. 2505. The moving party bears the initial burden of showing that there is no evidence which supports an element essential to the nonmovant's claim. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the movant has met this burden, the nonmoving party then must show that there is a genuine issue...