1 FILED JUL 22 on | 5 CLERK US. DISTRIGTCOURT □ SOUTHERN DISTRICT OF CALIFORNIA | 6 BY ff> DEPUTY 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 || RACHEL POTTS, an individual; Case No.: 3:21-cv-00256-BEN-BGS JAMIKO REI BELL, an individual ORDER GRANTING-IN-PART 13 Plaintiffs, MOTION TO DISMISS Vv. 14 [ECF No. 24] 15 || FORD MOTOR COMPANY, a Delaware corporation; CARMAX 16 || AUTO SUPERSTORES 17 CALIFORNIA, LLC, a Virginia limited liability company; and DOES 1 through 18 || 10, 19 Defendants. 20 Plaintiffs Rachel Potts and Jamiko Rei Bell (collectively, “Plaintiffs”) are suing 21 Defendants Ford Motor Company (“Ford”), CarMax Auto Superstores California, LLC 22 (“CarMax”, and when referred to collectively with Ford, “Defendants”), and ten unnamed 23 defendants for state law violations. The Court previously granted Defendants’ Motions 24 to Dismiss without prejudice, allowing Plaintiffs leave to amend their complaint. Order, 25 ECF No. 22. On June 3, 2021, Plaintiffs filed a First Amended Complaint (“FAC”) 26 alleging (1) breach of an express warranty,

(d)(1) (“Section 27 1793.2(d)(1)”), (2) failure to complete repairs within thirty days,

1 || 1793.2(b) “Section 1793.2(by”), (3) breach of the implied warranty of merchantability, 2 ||

(“Section 1791.1’), and (4) violation of California’s Unfair 3 || Competition Law,

, et seg. (“UCL”). See generally FAC, 4 ||ECF No. 23, Defendant CarMax filed an Answer to the FAC, ECF No. 25. Defendant 5 || Ford filed the Motion to Dismiss now before the Court. ECF No. 24. For the reasons set 6 || forth below, the motion is GRANTED-IN-PART. 7 BACKGROUND! 8 This is a Lemon Law case. On August 14, 2020, Plaintiffs jointly purchased a 9 Ford Mustang (the “Vehicle”) from a CarMax Auto Superstore in California. FAC, 10 || ECF No. 23, 9 7. Plaintiffs allege CarMax provided them an express warranty for the 11 |} Vehicle, agreeing to fix any defects that developed during the warranty period. □□□ at □ 9. 12 || They also allege that when Ford sold the Vehicle as new, it provided a five year sixty- 13 || thousand-mile warranty that still covered the Vehicle. /d. At { 8. 14 Only three weeks after Plaintiffs purchased the Vehicle, during a period covered by 15 || both warranties, the Vehicle developed nonconformities. FAC, ECF No. 23, Jf 7-10. 16 || Plaintiffs allege that, among other infirmities, the Vehicle would jerk into gear and had a 17 || transmission malfunction causing the Vehicle not to move “while on public roadways 18 || despite attempting to accelerate.” /d. at € 10. Plaintiffs allege these defects 19 || “substantially impair the use, value, or safety of the Vehicle.” /d. 20 Plaintiffs immediately reported the defects to CarMax but were told the Vehicle 21 || could not be serviced for three weeks. FAC, ECF No. 23, 9 11. On September 25, 2020, 22 || Plaintiffs took the Vehicle into a CarMax authorized repair facility. Jd. The Vehicle 23 ||remained there over the weekend and was released to Plaintiffs the following Monday. 24 || /d. Unfortunately, the repairs did not take. Jd. Plaintiffs returned to the repair facility 25

27 The following overview of the facts is drawn from Plaintiffs’ FAC, ECF No. 23, 5g which the Court assumes true in analyzing the motions to dismiss. Erickson v. Pardus,

(2007). The Court is not making factual findings.

1 ||that same day to allow the repair facility to try again. Jd. 2 Several days passed without resolution when the repair facility finally realized the 3 || Vehicle was still under Ford’s initial warranty. FAC, ECF No. 23, 9 12. Upon learning 4 ||Ford’s warranty still covered the Vehicle, the repair facility refused additional service 5 |}and delivered the Vehicle to Ford’s representative, Fritts Ford, on October 12, 2020.

6 ] 12. Fritts Ford then attempted to repair the Vehicle. /d. Plaintiff alleges that 7 \\CarMax and Ford kept the Vehicle for twenty to twenty-five days, though Ford only had 8 Vehicle for approximately eight days. /d. 9 In December 2020, Plaintiffs again brought the Vehicle to CarMax for repairs. 10 FAC, ECF No, 23, § 13. Once again, CarMax’s repair facility delivered the Vehicle to a 11 ||Ford dealership for repair pursuant to Ford’s initial warranty. fd. This repair period 12 ||lasted approximately fourteen days. Jd. 13 Plaintiffs claim they suffered damages because of the failure to repair. FAC, ECF 14 23, Jf 16. While not claiming a specific amount, Plaintiffs argue their actual 15 ||damages exceed $25,000.00. /d. Plaintiffs also seek injunctive relief, disgorgement, 16 |/restitution, and attorney’s fees. fd. at 47. However, despite the Court’s admonishment 17 its previous Order, the FAC is devoid of any details stating why money damages 18 || would be inadequate in this case. 19 LEGAL STANDARD 20 A dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure may be 21 based on the lack of a cognizable legal theory or absence of sufficient facts to support a 22 cognizable or plausible legal theory. Johnson v. Riverside Healthcare Sys.,

j/1116, 1121 (9th Cir. 2008); Navarro v. Block,

(9th Cir. 2001). When 24 || considering a Rule 12(b)(6) motion, the Court “accept[s] as true facts alleged and draw[s] 25 ||inferences from them in the light most favorable to the plaintiff.” Stacy v. Rederite Otto 26 || Danielsen,

(9th Cir. 2010). A plaintiff must not merely allege 27 ||conceivably unlawful conduct but must allege “enough facts to state a claim to relief that 28 |/is plausible on its face.” Bell Atl. Corp. v. Twombly,

(2007). “A claim

1 facially plausible ‘when the plaintiff pleads factual content that allows the court to 2 || draw the reasonable inference that the defendant is liable for the misconduct alleged.’” 3 || Zixiang Li v. Kerry,

(9th Cir. 2013) (quoting Ashcroft v. Igbal, 556 4 662, 678 (2009)). “Threadbare recitals of the elements of a cause of action, 5 |j}supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. 6 If a court dismisses a complaint, it may grant leave to amend unless “the pleading 7 |{could not possibly be cured by the allegation of other facts.” Cook, Perkiss & Liehe, Inc. 8 N. Cal. Collection Serv. Inc.,

, 247 (9th Cir. 1990). 9 ANALYSIS 10 Ford argues each claim asserted against it in the FAC should be dismissed. The 11 || Court addresses each of Plaintiffs’ four claims against Ford in turn. 12 A. Violation of California Civil Code Section 1793.2(d)(1) 13 Plaintiffs first allege Defendants gave them an express written warranty, and 14 |! during that warranty period, a defect developed that both Ford and CarMax failed to 15 timely repair. FAC, ECF No. 23, ff 7-19. Ford argues this claim fails because Plaintiffs 16 || failed to (1) present the vehicle directly to Ford for repair and (2) allege the Vehicle was 17 presented for warranty repairs pursuant to Ford’s warranty. Mot., ECF No. 24-1, 4-7. 18 || The Court disagrees. □

19 To prevail on a breach of express warranty claim, Plaintiffs must prove the 20 || following three elements: . 21 (1) the vehicle had a nonconformity covered by the express warranty 2 that substantially impaired the use, value or safety of the vehicle (the nonconformity element); (2) the vehicle was presented to an authorized 23 representative of the manufacturer of the vehicle for repair (the 4 presentation element); and (3) the manufacturer or his representative did not repair the nonconformity after a reasonable number of repair 25 attempts (the failure to repair element). 26 || Oregel v. Am. Isuzu Motors, Inc.,

(2001). 27 Plaintiffs first allege that during the warranty period, the Vehicle developed 28 ||nonconformities including a transmission malfunction that caused the Vehicle to become

1 || inoperable on public roadways. FAC, ECF No. 23, 910. These allegations plausibly 2 || state a substantial impairment of the use or safety of the Vehicle. See Iqbal, 556 USS. at 3 || 678. 4 Second, Plaintiffs allege they “immediately reported the defects to Defendant 5 |} CarMax” and brought the Vehicle to CarMax for repair in satisfaction of the second 6 ||element. FAC, ECF No. 23, § 11. However, in satisfaction of the third element, 7 || Plaintiffs also allege that CarMax was not able to repair the defect. See id. Plaintiffs 8 || then allege that once the CarMax repair facility learned the Vehicle was still under Ford’s 9 ||manufacturer warranty, they refused further repairs and delivered the Vehicle to a Ford 10 || dealership for repair. /d. at 12. Ford argues that because CarMax, and not Plaintiffs, 11 || delivered the Vehicle to a Ford dealership for service, they are immune from liability 12 || under Section 1793.2(d)(1). In support, Ford argues the statute requires “the buyer” to 13 deliver nonconforming goods to the manufacturer to impose liability when a repair is not 14 ||made. Mot., ECF No. 24, 4-5 (citing Robertson v. Fleetwood Travel Trailers of Cal, 15

(Cal. Ct. App. 2006)). Ford demands too much of 16 || Plaintiffs here and contorts the statute’s meaning. 17 Plaintiffs allege they brought the vehicle to CarMax, who in turn brought it to 18 || Ford, which attempted but failed to repair the Vehicle. FAC, ECF No. 23, J 11-13. 19 || That is enough to satisfy the presentation element of Section 1793.2(d)(1). Cf 20 || Robertson,

(explaining that “the purpose of the presentation 21 || element is to provide a reasonable opportunity to make the needed repairs”), Ford seems 22 |ito argue that Plaintiffs, after dropping off the broken Vehicle at CarMax, should have 23 || picked it up themselves and taken it to a Ford dealer. This minute, literal meaning would 24 || lead to “absurd consequences that the Legislature did not intend.” Robertson,

|| App. 4th at 807. Instead, the better reading of the FAC is that Plaintiffs gave Ford the 26 || opportunity to repair the Vehicle and Ford meaningfully undertook to repair it, thereby 27 ||satisfying the presentation element of Section 1793.2(d)(1). 28 Finally, despite Ford’s argument to the contrary, the FAC clearly alleges Plaintiffs

1 presented the Vehicle for warranty repairs pursuant to Ford’s warranty. See FAC, ECF 2 || No. 23, {9 8-10 (alleging that “Ford gave Plaintiffs an express written warranty” covering 3 ||the vehicle for up to 5 years or 60,000 miles, and that during this period the Vehicle 4 || developed nonconforming defects). While Ford quibbles that it has no records of 5 || servicing the Vehicle, Mot., ECF No. 24, 6n 2., at the pleadings stage, the Court 6 ||“accept[s] as true facts alleged and draw[s] inferences from them in the light most 7 || favorable to the plaintiff.” Stacy,

. 8 Applying that standard, the Court DENIES Ford’s Motion to Dismiss Plaintiffs’ 9 First Claim for Relief alleging a violation of Section 1793.2(d)(1). 10 B. Violation of California Civil Code Section 1793.2(b) 11 Plaintiffs’ Second Claim for Relief alleges Defendants violated Section 1793.2(b) 12 || by failing to repair defects covered by warranty within thirty days. FAC, ECF No. 23, {f 13 20-32. Ford argues that based on the FAC alone it did not have the required thirty days 14 repair the Vehicle. Reply, ECF No. 27, 4-5. Here, the Court agrees with Ford. 15 Section 1793.2(b) requires that when goods must be serviced or repaired “because 16 do not conform with the applicable express warranties[,] ... the goods shall be 17 serviced or repaired to conform to the applicable warranties within 30 days.” Cal. Civ. 18 || Code § 1793.2(b). Plaintiffs allege they brought the Vehicle to CarMax on September 19 |125, 2020, and on October 12, 2020, CarMax’s authorized repair facility took the Vehicle 20 ||to a Ford dealership. FAC, ECF No. 23, ff] 25-26. At that point, the thirty-day clock 21 || began ticking for Ford. However, Plaintiffs allege they received the Vehicle back from 22 Ford about eight days later. See id. (alleging they did not have possession of the Vehicle 23 |i for a total of 20-25 days during this period). Plaintiffs allege they later brought the 24 || Vehicle in again for another fourteen days. Jd. at § 27. 25 Even assuming the truth of these allegations, Plaintiffs only allege Ford had 26 twenty-two total days to repair the Vehicle. Accordingly, they cannot allege a Section 27 || 1793.2(b) claim against Ford because Ford did not have the statutorily required thirty 28 || days to repair. In this instance, any amendment would be futile, and therefore the Court

1 ||GRANTS Ford’s Motion to Dismiss the Second Claim for Relief against it with 2 || prejudice. 3 C. Violation of California Civil Code Sections 1791.1; 1794; 1795.5 4 Plaintiffs’ Third Claim for Relief alleges Defendants violated Section 1791.1, 5 || California’s implied warranty of merchantability. FAC, ECF No. 23, [J 33-43. Ford 6 || again argues that to the extent this claim is brought against Ford, it fails as a matter of 7 || law because the Vehicle was purchased used, and according to Ford, the manufacturer is ||not liable for defects in used products. Mot., ECF No. 24, 7-8 (citing Goldstein v. 9 || General Motors LLC,

, 1018 (S.D. Cal. 2020)). 10 Plaintiffs contend Section 1795.5(c) confers “an implied warranty of 11 |{merchantability and implied warranty of fitness” that runs “coextensively with [Ford’s] 12 j|express warranty.” Opp’n, ECF No. 26, 6. Not so. Section 1795.5 imposes an 13 |} obligation on “distributor[s] or retail seller[s]” of “used consumer goods.” Section 14 1795.5(a). It does not impose an obligation on manufacturers. See id.; see also 15 || Goldstein, 445 F. Supp. 3d at 1018 (finding that while Section 1791.1 extends to used 16 || goods, its obligations only cover the distributor or retailer seller making the express 17 |} warranties, not the original manufacturer, distributor, or a seller not expressly making 18 ||those warranties) (citing

(a)). Accordingly, “[c]ourts routinely 19 || dismiss implied warranty claims for used cars that are directed at the manufacturer.”

20 || (citations omitted). 21 The allegation that the Vehicle was covered by Ford’s original express warranty 22 not change the analysis. For purposes of express warranties, a “new motor vehicle” 23 ||includes a “motor vehicle sold with a manufacturer’s new car warranty,” see Cal. Civ. 24 ||Code € 1793.22(e)(2), but that definition does not extend to implied warranties. Thus, 25 || while Ford may be liable for breach of an express warranty pursuant to Section 26 || 1795.2(d), the same cannot be said about breach of an implied warranty pursuant to 27 Section 1795.5. 28 Plaintiffs have already been given guidance and an opportunity to amend this claim

1 |{against Ford but have failed to do so. Accordingly, the Court GRANTS Ford’s Motion 2 Dismiss the Third Claim for Relief against it with prejudice. 3 D. Violation of California Business & Professions Code Section 17200, e¢ 4 seq. 5 Finally, Plaintiffs’ Fourth Claim for Relief alleges Ford violated the UCL through 6 || the statutory breaches alleged in their first three claims. FAC, ECF No. 23, ff] 44-47. 7 In its previous Order, the Court noted that “remedies for violation of the UCL are 8 || limited to injunctive relief and restitution.” ECF No. 22, 13 (citing Chambers v. 9 || Whirlpool Corp.,

, 660 n.3 (9th Cir. 2020); Cortez v. Purolater Air 10 || Filtration Prod. Co.,

(2000). The Court also noted that, in light of 11 || the Ninth Circuit’s decision in Sonner v. Premier Nutrition Corp.,

(9th 12 || Cir. 2020), a party seeking equitable relief must plead the unavailability or inadequacy of 13 |}monetary damages to proceed in federal court. Order, ECF No. 22, 14n. 5. Despite this 14 || warning, Plaintiffs made no attempt to explain how money damages would be inadequate 15 || or unavailable here. 16 Plaintiffs’ argument that there is an “intra-circuit split on whether UCL claims at 17 |\ the pleading stage should be dismissed when the UCL claims are based on the same facts 18 || as other claims with adequate remedies” is unavailing. Opp’n, ECF No. 26, 9. First, 19 case on which Plaintiffs rely predates the Ninth Circuit’s decision in Sonner. See

20 (citing cases from 2017, 2018, and 2019). Second, to the extent any “intra-circuit split” 21 |lever existed, Sonner has clearly resolved such a split on similar facts. There, the Ninth 22 Circuit held that “federal courts must apply equitable principles derived from federal 23 |}common law to claims for equitable restitution under [the UCL].” Sonner,

||837. “Under these principles, [a plaintiff] must establish she lacks an adequate remedy at 25 before securing equitable restitution for past harm under the UCL.” Jd. at 844; see 26 || also Guzman v. Polaris Industries Inc., Case No. 8:19-cv-1543-FLA,

, 27 *11 (C.D. Cal. May 12, 2021) (relying on Sonner to grant summary judgment where 28 ||there were no allegations of inadequate damages) and Shay v. Apple Inc,., Case No, 20-cv-

1 || 1629-GPC,

, at *5 (S.D. Cal. May 3, 2021) (applying Sonner to 2 dismiss a UCL claim where the plaintiff did not allege she had an inadequate remedy at 3 Plaintiffs have made no such allegations that money damages would be an 4 || inadequate remedy in this case. 5 Accordingly, Court GRANTS Defendants’ motions to dismiss Plaintiffs’ Fourth 6 Claim for Relief for violations of California’s UCL with prejudice. CONCLUSION 8 For the foregoing reasons, Defendant Ford’s Motion to Dismiss is GRANTED-IN- 9 || PART as follows: 10 1. Ford will remain as a named defendant in the First Claim for Relief only. 11 2. Ford is dismissed with prejudice as anamed defendant from Plaintiff's 12 ||Second, Third, and Fourth Claims for Relief in the FAC. 13 IT IS SO ORDERED. JL, □

14 Dated: huly ff, 2021 devs LZ 15 HOMAROGER T. BENITEZ United St&tes District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28