Opinion
Case No. EDCV 22-907 JGB (SHKx)
12-06-2022
Ricardo FRANCO, et al. v. FORD MOTOR COMPANY
Seyed Abbas Kazerounian, Gil Melili, Jason A. Ibey, Pamela Erin Prescott, Kazerouni Law Group APC, Costa Mesa, CA, Courtney L. Davenport, Pro Hac Vice, The Davenport Law Firm, LLC, Germantown, MD, K. Scott Warrick, Pro Hac Vice, Matthew D. Schultz, Pro Hac Vice, William F. Cash, III, Pro Hac Vice, Levin Papantonio Rafferty Proctor Buchanan O'Brien Barr Mouge, Pensacola, FL, Robert Frank Melton, II, Pro Hac Vice, William C. Ourand, Jr., Pro Hac Vice, Newsome Melton PA, Orlando, FL, for Ricardo Franco, et al. Joel Allen Dewey, Jeffrey M. Yeatman, Pro Hac Vice, Baker Donelson Bearman Caldwell and Berkowitz PC, Baltimore, MD, Alexander E. Wolf, DLA Piper LLP, Los Angeles, CA, Christine Diaz Reynolds, Elizabeth V. McNulty, Joshua D. Cools, Evans Fears and Schuttert LLP, Newport Beach, CA, for Ford Motor Company.
Seyed Abbas Kazerounian, Gil Melili, Jason A. Ibey, Pamela Erin Prescott, Kazerouni Law Group APC, Costa Mesa, CA, Courtney L. Davenport, Pro Hac Vice, The Davenport Law Firm, LLC, Germantown, MD, K. Scott Warrick, Pro Hac Vice, Matthew D. Schultz, Pro Hac Vice, William F. Cash, III, Pro Hac Vice, Levin Papantonio Rafferty Proctor Buchanan O'Brien Barr Mouge, Pensacola, FL, Robert Frank Melton, II, Pro Hac Vice, William C. Ourand, Jr., Pro Hac Vice, Newsome Melton PA, Orlando, FL, for Ricardo Franco, et al. Joel Allen Dewey, Jeffrey M. Yeatman, Pro Hac Vice, Baker Donelson Bearman Caldwell and Berkowitz PC, Baltimore, MD, Alexander E. Wolf, DLA Piper LLP, Los Angeles, CA, Christine Diaz Reynolds, Elizabeth V. McNulty, Joshua D. Cools, Evans Fears and Schuttert LLP, Newport Beach, CA, for Ford Motor Company.
Proceedings: Order (1) GRANTS Defendant's Motion to Dismiss (Dkt. No. 41); and (2) VACATING the December 12, 2022 Hearing (IN CHAMBERS)
JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE
Before the Court is a motion to dismiss filed by Defendant Ford Motor Company pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6). ("Motion," Dkt. No. 41.) The Court finds this matter appropriate for resolution without a hearing. See Fed. R. Civ. P. 78; L.R. 7-15. After considering the papers filed in support of and in opposition to the Motion, the Court GRANTS the Motion. The Court VACATES the December 12, 2022 hearing.
I. BACKGROUND
On July 15, 2022, Plaintiffs Ricardo Franco ("Franco") and William Kiefer ("Kiefer") (collectively, "Plaintiffs") filed a first amended class action complaint against Defendant Ford Motor Company ("Ford" or "Defendant"). ("FAC," Dkt. No. 38.) The FAC asserts seven causes of action: (1) fraudulent concealment; (2) violations of California's Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq.; (3) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq.; (4) breach of implied warranty under the California Commercial Code § 2314; (5) breach of implied warranty under California's Song-Beverly Consumer Warranty Act ("Song-Beverly Act"), Cal. Civ. Code § 1790 et seq.; (6) breach of express warranty under the California Commercial Code § 2313; and (7) breach of express warranty under the Song-Beverly Act. (Id.)
On September 9, 2022, Defendant moved to dismiss the FAC pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)"). (Motion.) In conjunction with the Motion, Defendant requested judicial notice of the New Vehicle Limited Warranty applicable to Franco's 2013 vehicle ("2013 NVLW") and the New Vehicle Limited Warranty applicable to Kiefer's 2016 vehicle ("2016 NVLW"). ("First RJN," Dkt. No. 42.)
On October 14, 2022, the Court granted the parties' stipulation to dismiss certain claims: fraudulent concealment (Count 1), violation of the UCL (Count 3), and breach of express warranty pursuant to the Song-Beverly Act (Count 7). (Dkt. No. 45.) The Court's dismissal of Count 1 rendered moot Plaintiffs' request for certification of a national class. (Id.) Further, the parties stipulated to dismiss without prejudice all claims for equitable or injunctive relief. (Id.) Plaintiffs' remaining claims are violations of the CLRA (Count 2); breach of implied warranty under the California Commercial Code (Count 4) and the Song-Beverly Act (Count 5); and breach of express warranty under the California Commercial Code (Count 6).
On October 14, 2022, Plaintiffs opposed Defendant' motion ("Opposition," Dkt. No. 46) and objected to the First RJN ("Objections to First RJN," Dkt. No. 47). On November 14, 2022, Defendant replied. ("Reply," Dkt. No. 49.) In conjunction with the Reply, Defendant requested judicial notice of three technical service bulletins that it argues were incorporated by reference in the FAC. ("Second RJN," Dkt. No. 49-1.) Plaintiffs objected to the Second RJN on November 21, 2022. ("Objections to Second RJN," Dkt. No. 52.)
Because the Court does not rely on the documents to which Defendant seeks judicial notice and Plaintiffs oppose, the Court denies both the First RJN and Second RJN as moot. The Court notes, however, that it is "unusual to ask the Court to take judicial notice of a document for the first time in a reply brief. That rarity speaks to the impropriety of the practice." HsingChing Hsu v. Puma Biotech., Inc., 2016 WL 9408516, at *1 (C.D. Cal. Feb. 25, 2016).
II. FACTUAL ALLEGATIONS
Plaintiffs allege the following facts, which are assumed to be true for the purposes of this Motion. See Am. Fam. Ass'n, Inc. v. City & Cnty. of San Francisco, 277 F.3d 1114, 1120 (9th Cir. 2002).
This is a putative class action involving allegedly defective exhaust manifolds in certain Ford trucks. (FAC ¶¶ 24-25.) Franco is a resident of Rancho Cucamonga, California. (Id. ¶ 8.) In 2013, Franco purchased a new Ford F-150 vehicle from Citrus Motors Ontario, Inc., located in San Bernardino County. (Id.) Kiefer is a resident of Hesperia, California. (Id. ¶ 9.) In 2016, Kiefer purchased a new Ford F-150 vehicle from Sunrise Ford, also located in San Bernardino County. (Id.) Plaintiffs seek to represent all persons in California who purchased and still own and/or lease or leased a 2011 to 2016 Ford F-150 truck equipped with a 3.5L V6 EcoBoost engine ("Class Vehicles"). (Id. ¶ 112.) The amount in controversy exceeds $5,000,000. (Id. ¶ 11.)
Ford is incorporated in Delaware and maintains its principal place of business in Michigan. (Id. ¶ 10.) Ford has purposefully availed itself of the privilege of conducting business in California by marketing, selling, and servicing goods within the state. (Id. ¶ 14.)
The gravamen of Plaintiffs' complaint is that the exhaust manifolds in Class Vehicles have a propensity to fail prematurely, exposing occupants to toxic fumes and impairing vehicle performance. (Id. ¶ 3.) The exhaust manifold collects exhaust gases such as carbon monoxide exiting the engine cylinders after combustion. (Id. ¶ 29.) As such, it must be able to withstand thermal expansion in high temperatures and resist corrosion without warping or breaking. (Id.) If the exhaust manifold warps or breaks, exhaust gases can leak into the vehicle cabin, rather than venting out through the exhaust system. (Id. ¶ 30.) In Class Vehicles, the cylinder head to which the exhaust manifold is secured contains eleven attachment holes, but the manifold itself is manufactured with only eight holes. (Id. ¶ 37.) Plaintiffs allege that due to Ford's failure to design an adequate number of attachment holes, the exhaust manifold is prone to warping and cracking. (Id. ¶ 39.) Plaintiffs also allege that the manifold is made from an inadequate grade and/or gauge of cast iron. (Id. ¶ 40.)
Ford owner forums and YouTube videos have documented Ford 3.5L V6 EcoBoost manifolds warping, cracking, and/or breaking. (Id. ¶¶ 42-45.) One Ford Transit owner posted a photo on a forum showing broken exhaust manifolds studs. (Id. ¶ 42.) One technician posted a video on YouTube titled "F-150 3.5 EcoBoost Exhaust Manifold Repair." (Id. ¶ 44.) Finally, one F-150 owner recorded a video "noting that while the mounting studs on his engine cylinder heads did not break, the gasket cracked and showed signs of carbon deposits." (Id. ¶ 45.) Further, there are aftermarket companies that sell replacement exhaust manifolds that can attach to all eleven holes on the cylinder head. (Id. ¶¶ 64-66.)
Plaintiffs allege that Ford has long been aware that its exhaust manifolds are defective. Since 2013, Ford and the National Highway Traffic Safety Administration ("NHTSA") have received numerous complaints from owners of Class Vehicles reporting exhaust odor entering the vehicle cabin, "with at least 100 of those specifically citing the need for an exhaust manifold replacement." (Id. ¶ 47.) In response, Ford has issued Technical Service Bulletins ("TSBs") and Special Service Messages ("SSMs"), which only Ford technicians receive, regarding "complaints of exhaust odors in the cabins of the Class Vehicles and others with identical or substantially similar manifolds." (Id. ¶ 48.) The TSBs, which did not apply to Class Vehicles, advised technicians to inspect the rear exhaust system and the heating, ventilation, and air conditioning ("HVAC") software to address the issue. (Id. ¶¶ 49-51.)
Meanwhile, the SSMs informed technicians that new redesigned exhaust manifolds have been released for certain vehicles. (Id. ¶¶ 55-56.) One SSM from October 2017 stated that some 2011 to 2014 Ford SuperDuty vehicles equipped with a 6.7L Diesel engine "may experience an exhaust leak due to broken exhaust manifold studs" and that new parts, including exhaust manifolds, have been released to service this condition. (Id. ¶ 55.) Another SSM from September 2021 stated that Ford Transit vehicles, which are equipped with the same 3.5L V6 EcoBoost engines as the Class Vehicles, were "manufactured with cast iron exhaust manifolds that use 8 studs to attach to the cylinder head" and that a "new service part is available for this application that is manufactured of stainless steel and uses 9 studs." (Id. ¶ 56.)
An SSM from July 2017 acknowledged that some "customers/technicians may perceive that the vehicle is missing one or more exhaust manifold studs. The cylinder heads are used on various vehicles and not all the bolting locations are utilized on every application." (Id. ¶ 63.)
Ford has also issued two Customer Satisfaction Campaigns ("Campaigns") during a "years-long, ongoing investigation by NHTSA into carbon monoxide leaks in Ford vehicles." (Id. ¶ 52.) One campaign covering 2013 to 2017 Ford Explorer Police Interceptor vehicles acknowledged that carbon monoxide may enter vehicle cabins through holes drilled in the rear liftgate and the rear undercarriage for aftermarket police equipment. (Id.) Another campaign covering 2011 to 2017 Ford Explorer vehicles represented that the vehicles are safe because any carbon monoxide that enters the cabins does not "exceed what people are exposed to every day." (Id. ¶ 53.) However, for "peace of mind," Ford offered to perform rear-of-vehicle inspection and sealing, as well as HVAC reprogramming, if requested. (Id.)
All in all, Plaintiffs allege that the customer complaints, NHTSA investigation, TSBs, SSMs, Campaigns, and redesign of certain models' manifolds show that "Ford is well aware that defective exhaustive manifolds are allowing exhaust odors and toxins to enter the vehicle cabin and affecting the performance of the vehicles." (Id. ¶ 61.) Further, Plaintiffs allege that the redesign shows that "Ford is aware the exhaust manifolds in the Class Vehicles are predisposed to failure; but it chose not to alert consumers to this fact." (Id. ¶ 62.)
Instead, Ford markets the F-150 as providing "best-in-class towing and payload" and as "designed to be tough and productive." (Id. ¶ 71.) Based on Ford's representations, Plaintiffs reasonably believed when they purchased their vehicles that Class Vehicles were free of defect, including defect of the exhaust manifolds. (Id. ¶ 70.) A defective exhaust manifold compromises the safety and performance of a vehicle, thereby decreasing its market value. (Id. ¶ 75.) Plaintiffs suffered economic injury because they paid more to own or lease their Class Vehicles than they otherwise would have if the defect had been disclosed. (Id. ¶¶ 85-93.) Accordingly, Plaintiffs now seek damages in the amount of the difference in value between what they reasonably believed they were paying for and the value of the vehicle they actually received. (Id. ¶ 142.)
III. LEGAL STANDARD
A. Rule 12(b)(6)
Under Rule 12(b)(6), a party may bring a motion to dismiss for failure to state a claim upon which relief can be granted. Rule 12(b)(6) must be read in conjunction with Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that a pleader is entitled to relief," in order to give the defendant "fair notice of what the claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); see Ileto v. Glock Inc., 349 F.3d 1191, 1199-1200 (9th Cir. 2003). When evaluating a Rule 12(b)(6) motion, a court must accept all material allegations in the complaint—as well as any reasonable inferences to be drawn from them—as true and construe them in the light most favorable to the non-moving party. See Doe v. United States, 419 F.3d 1058, 1062 (9th Cir. 2005); ARC Ecology v. U.S. Dep't of Air Force, 411 F.3d 1092, 1096 (9th Cir. 2005); Moyo v. Gomez, 32 F.3d 1382, 1384 (9th Cir. 1994). Courts are not required, however, "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) (internal citation and quotation omitted). Courts also need not accept as true allegations that contradict facts which may be judicially noticed. See Mullis v. U.S. Bankr. Court, 828 F.2d 1385, 1388 (9th Cir. 1987).
"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citations omitted). Rather, the allegations in the complaint "must be enough to raise a right to relief above the speculative level." Id.
To survive a motion to dismiss, a plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955; Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of 'entitlement to relief.' " Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). The Ninth Circuit has clarified that (1) a complaint must "contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively," and (2) "the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
B. Rule 9(b)
Federal Rule of Civil Procedure 9(b) ("Rule 9(b)") imposes a heightened pleading standard where a complaint alleges fraud or mistake. Fed. R. Civ. P. 9(b). To state a claim for fraud, a party must plead with "particularity the circumstances constituting the fraud," and the allegations must "be specific enough to give defendants notice of the particular misconduct . . . so that they can defend against the charge and not just deny that they have done anything wrong." Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (internal citation and quotation omitted). "Averments of fraud must be accompanied by 'the who, what, when, where, and how' of the misconduct charged." Vess v. Ciba-Geigy Corp., 317 F.3d 1097, 1106 (9th Cir. 2003) (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)).
C. Rule 15
Federal Rule of Civil Procedure 15 ("Rule 15") provides that leave to amend "shall be freely given when justice so requires." Fed. R. Civ. P. 15(a). "This policy is to be applied with extreme liberality." Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (internal citation and quotation omitted). A "district court 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 allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (internal citation and quotation omitted).
IV. DISCUSSION
Defendant moves to dismiss Plaintiffs' FAC. (Motion.) Since the parties stipulated to dismiss certain claims, Plaintiffs' remaining claims are violations of the CLRA (Count 2); breach of implied warranty under the California Commercial Code (Count 4) and the Song-Beverly Act (Count 5); and breach of express warranty under the California Commercial Code (Count 6). The Court addresses each in turn below.
A. Violations of CLRA (Count 2)
Ford moves to dismiss Plaintiffs' CLRA claim. The CLRA prohibits "unfair or deceptive acts or practices undertaken by a person in a transaction intended to result or that results in the sale or lease of goods or services to a consumer." Cal. Civ. Code § 1770. Conduct that is "likely to mislead a reasonable consumer" violates the CLRA. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012) (citation omitted). Additionally, Rule 9(b)'s heightened pleading standards apply to CLRA claims grounded in fraud. See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009); Zuehlsdorf v. FCA US LLC, 2019 WL 2098352, at *7 (C.D. Cal. Apr. 30, 2019). However, when a claim is based on fraudulent omission, "the Rule 9(b) standard is somewhat relaxed because a plaintiff cannot plead either the specific time of omission or the place, as he is not alleging an act, but a failure to act." Carillo v. BMW of N. Am., LLC, 2020 WL 12028895, at *5 (C.D. Cal. Mar. 25, 2020) (internal citation and quotation omitted); see also Baggett v. Hewlett-Packard Co., 582 F. Supp. 2d 1261, 1267 (C.D. Cal. 2007) ("[A] fraud by omission or fraud by concealment claim can succeed without the same level of specificity required by a normal fraud claim." (internal citation and quotation omitted)).
Here, Plaintiffs assert that Ford violated subsections (a)(5), (9), (14), and (16) of the CLRA based on a theory of fraudulent omission. (FAC ¶ 151; see Opposition at 6.) Specifically, Plaintiffs allege that Ford had a duty to disclose the defective exhaust manifold in Class Vehicles but failed to do so. (FAC ¶ 152.) For an omission to be actionable under the CLRA, it must be either "contrary to a representation actually made by the defendant, or an omission of a fact the defendant was obligated to disclose." Zuehlsdorf, 2019 WL 2098352, at *7 (citation omitted). Plaintiffs concede that they do not allege any affirmative misrepresentations. (Opposition at 6.) Thus, the issue is whether Ford had a duty to disclose the alleged defect.
A defendant has a duty to disclose in four circumstances:
(1) When the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material fact.Id. Plaintiffs contend that the second and third circumstances apply: Ford had exclusive knowledge of material facts regarding the defect not known to Plaintiffs and Ford actively concealed the defect from Plaintiffs. (Opposition at 9-13.) Meanwhile, Ford argues that it did not have a duty to disclose because there is no sufficiently close nexus between the alleged defect and a safety risk, and it did not have pre-sale knowledge of the alleged defect. (Reply at 6-9.)
As a threshold matter, the Court finds that Plaintiffs have failed to sufficiently allege that Ford had pre-sale knowledge of the alleged defect at all. See Williams v. Yamaha Motor Co. Ltd., 851 F.3d 1015, 1025 (9th Cir. 2017) ("To state a claim for failing to disclose a defect, a party must allege . . . that the manufacturer knew of the defect at the time a sale was made."); Wilson, 668 F.3d at 1145 ("California federal courts have held that, under the CLRA, plaintiffs must sufficiently allege that a defendant was aware of a defect at the time of sale to survive a motion to dismiss."). The TSBs Plaintiffs cite not only did not apply to Class Vehicles, but they also advised technicians who received complaints of exhaust odor to examine parts of a car that are not the exhaust manifold. (FAC ¶¶ 47-51.) Plaintiffs' bare assertion that Ford's repairs "only attempt to prevent the leaking fumes from entering the cabin" rather than "correct the underlying Defect" is too conclusory for the Court to accept as true. (Id. ¶ 51.) Similarly, the Campaigns Plaintiffs cite did not concern Class Vehicles or exhaust manifolds.
One Campaign sought to prevent carbon monoxide leaks in Ford police vehicles caused by holes drilled by third parties to install aftermarket police equipment. (Id. ¶ 52.) Another Campaign determined that any carbon monoxide leaks in certain Ford Explorer vehicles do not rise to unsafe levels, but that Ford would nevertheless inspect the rear of the vehicles and HVAC systems. (Id. ¶ 53.) Although the Campaigns suggest that Ford was aware of carbon monoxide leaks in some vehicles, they do not support Plaintiffs' deduction that Ford was aware that such leaks could be caused by an alleged defect in a different car part (i.e., the exhaust manifold) in a different vehicle model (i.e., F-150s).
Plaintiffs cite one SSM from 2017 that acknowledged certain Ford SuperDuty vehicles "may experience an exhaust leak due to broken exhaust manifold studs," but it concerned a different vehicle model equipped with a different engine (i.e., 6.7L Diesel) than Class Vehicles. (Id. ¶ 55.) Another SSM from 2021 announced that a new exhaust manifold with nine holes was available for Ford Transit vehicles, which are equipped with the same engine as Class Vehicles (i.e., 3.5L V6 EcoBoost). (Id. ¶ 56.) By designing a replacement manifold for a model with the same engine, Plaintiffs conclude, "Ford implicitly acknowledges the insufficiently robust design of the original version." (Id. ¶ 57.) Although the Court draws reasonable inferences in favor of the non-moving party, Plaintiffs' inference that Ford knew that the exhaust manifolds in Class Vehicles were defective because it designed a replacement manifold with an additional hole for a different vehicle model is too speculative. Crucially, Plaintiffs do not allege that Ford redesigned the manifold in Transit vehicles in 2021 because of the same issue—broken exhaust manifold studs—as in the SuperDuty vehicles in 2017.
The closest Plaintiffs come to pleading Ford's knowledge is the following: "Since 2013, Ford and [NHTSA] have received numerous complaints from owners of Class Vehicles that exhaust odor was entering the vehicle cabin, with at least 100 of those specifically citing the need for an exhaust manifold replacement." (Id. ¶ 47.) However, Plaintiffs do not explain when or how the complaints were made, nor why the manifolds were replaced (i.e., if they were defective). See Wilson, 668 F.3d at 1147. "Courts have rejected undated customer complaints offered as a factual basis for a manufacturer's knowledge of a defect because they provide no indication whether the manufacturer was aware of the defect at the time of sale." Id. (citing cases). Further, some courts have expressed doubt that customer complaints in and of themselves can adequately support an inference of the manufacturer's knowledge. (Id.) Thus, the Court finds that Plaintiffs' allegations of Ford's pre-sale knowledge of the defect are merely conclusory. Plaintiffs come close to the plausibility line, but do not cross it, especially under the heightened pleading standard for fraudulent omission claims. See Fed. R. Civ. P. 9(b).
Because the Court finds that Plaintiffs fail to adequately plead Ford's pre-sale knowledge, it does not address the parties' arguments regarding whether the alleged defect presented an unreasonable safety hazard or whether Ford had a duty to disclose the defect.
Additionally, Plaintiffs do not sufficiently allege that the statute of limitations for filing a CLRA claim was tolled by delayed discovery or fraudulent concealment. (Motion at 16-17.) Normally, the statute of limitations period for the CLRA is three years. Cal. Civ. Code § 1783. The delayed discovery rule "postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action." Arechiga v. Ford Motor Co., 2018 WL 5904283, at *2 (C.D. Cal. Apr. 23, 2018). In order to invoke the delayed discovery exception to the statute of limitations, Plaintiffs must "specifically plead facts which show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence." Yumul v. Smart Balance, Inc., 733 F. Supp. 2d 1134, 1141 (C.D. Cal. 2010). Here, Plaintiffs allege that they "had no knowledge of Ford's misconduct," but they do not plead any facts regarding the time and manner of their discovery of the alleged defect. (FAC ¶¶ 94-101.) Thus, the Court cannot hold as a matter of law that Plaintiffs' claims accrued later than when Plaintiffs purchased their vehicles in 2013 and 2016. (Id. ¶ 101.) For the same reasons that Plaintiffs fail to plead fraudulent omission above, Plaintiffs also fail to plead fraudulent concealment. See Yumul, 733 F. Supp. 2d at 1133 ("Plaintiff has not pled the who, what, when, where, and how of the alleged fraudulent concealment.").
Accordingly, the Court DISMISSES Plaintiffs' CLRA claim (Count 2) with leave to amend.
B. Breach of Implied Warranty (Counts 4 and 5)
Next, Ford moves to dismiss Plaintiffs' breach of implied warranty claims under the California Commercial Code and the Song-Beverly Act. To state a claim for breach of implied warranty under California law, a consumer must demonstrate that the good is not "fit for the ordinary purposes for which such goods are used." Cal. Com. Code § 2314(2)(c). Additionally, the Song-Beverly Act provides that "every sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer's and the retail seller's implied warranty that the goods are merchantable." Cal. Civ. Code § 1792. A plaintiff claiming breach of an implied warranty of merchantability must show that the product "did not possess even the most basic degree of fitness for ordinary use." Asghari v. Volkswagen Grp. of Am., Inc., 42 F. Supp. 3d 1306, 1338 (C.D. Cal. 2013) (citations omitted). "The basic inquiry, therefore, is whether the vehicle was fit for driving." Id.
The Court finds that Plaintiffs have failed to sufficiently allege that Class Vehicles are unmerchantable. Crucially, Plaintiffs do not allege that they have observed or experienced any issues with their exhaust manifolds, or that the alleged defect impaired the use of their vehicles in any way. See Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962, 980 (C.D. Cal. 2014) ("Plaintiffs have not alleged that they stopped using their vehicles."). Plaintiffs do allege generally that a defective exhaust manifold could compromise the safety and performance of a vehicle, they do not allege that the defect has manifested in their vehicles in any way. See Klein v. Ljubljana Inter Auto d.o.o., 2021 WL 6424917, at *4 (C.D. Cal. Sept. 13, 2021) ("Without the defect having actually manifested in [plaintiff's] car in any way, it cannot form the basis of a breach of the implied warranty of merchantability.") Thus, Plaintiffs have not pled unmerchantability. Because the Court finds that Plaintiffs fail to adequately plead unmerchantability, it does not address the parties' arguments regarding the statute of limitations and vertical privity.
Accordingly, the Court DISMISSES Plaintiffs' breach of implied warranty claims (Counts 4 and 5) with leave to amend.
C. Breach of Express Warranty (Count 6)
Finally, Ford moves to dismiss Plaintiffs' breach of express warranty claim. To state a claim for breach of express warranty under California law, a plaintiff must show that: "(1) the seller's statements constitute an affirmation of fact or promise or a description of the goods; (2) the statement was part of the basis of the bargain; and (3) the warranty was breached." Clark v. Am. Honda Motor Co., Inc., 528 F. Supp. 3d 1108, 1117 (C.D. Cal. 2021) (citing In re ConAgra Foods, Inc., 90 F. Supp. 3d 919, 984 (C.D. Cal. 2015)). The plaintiff must allege the exact terms of the warranty. Clark, 528 F. Supp. 3d at 1117 (citations omitted).
Here, Plaintiffs fail to invoke any written warranty. In fact, Plaintiffs oppose Ford's request for the Court to judicially notice the 2013 and 2016 NVLWs that may be applicable to Plaintiffs' vehicles. (Objections to First RJN.) Perplexingly, Plaintiffs argue that they do not reference the NVLWs in the FAC (id. at 3); only that "Ford issued an express written warranty for each defective Class Vehicle" without specifying any particular written warranty (FAC ¶ 209). Because Plaintiffs do not allege the exact terms of the warranty, they have failed to state a claim for breach of express warranty.
Accordingly, the Court DISMISSES Plaintiffs' breach of express warranty claim (Count 6) with leave to amend.
V. CONCLUSION
For the foregoing reasons, the Court GRANTS Defendant's Motion and DISMISSES Plaintiffs' remaining claims with leave to amend. The Court VACATES the December 5, 2022 hearing. Plaintiffs may file an amended complaint, if any, by Monday, December 19, 2022.