OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6) · Case No. CV 15-05766-GW (SSx) PLAINTIFFS’ MEMORANDUM...

Case No. CV 15-05766-GW (SSx)

PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS

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Jordan L. Lurie (SBN 130013) [email protected] Robert K. Friedl (SBN 134947) [email protected] Tarek H. Zohdy (SBN 247775) [email protected] Cody R. Padgett (SBN 275553) [email protected] Capstone Law APC 1840 Century Park East, Suite 450 Los Angeles, California 90067 Telephone: (310) 556-4811 Facsimile: (310) 943-0396 Attorneys for Plaintiffs Roy Jones and Alyce Rubinfeld

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA ROY JONES and ALYCE RUBINFELD, individually, and on behalf of a class of similarly situated individuals, Plaintiffs, v. PORSCHE CARS NORTH AMERICA, INC., a Delaware corporation, and DOES 1-10, inclusive, Defendants.

Case No. 2:15-CV-05766-GW (SSx) CLASS ACTION Assigned to Hon. George H. Wu PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS FIRST AMENDED COMPLAINT PURSUANT TO FEDERAL RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6) Date: October 15, 2015 Time: 8:30 a.m. Ctrm: 10 Notice of Removal: July 30, 2015 Trial Date: None set

Case 2:15-cv-05766-GW-SS Document 28 Filed 09/24/15 of 31 Page ID #:443

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TABLE OF CONTENTS

I. INTRODUCTION ....................................................................................... 1

II. ARGUMENT .............................................................................................. 4

Plaintiffs Adequately Allege CLRA Violations ................................ 4 A.

1. A Direct Transaction Is Not Required Under the

CLRA ...................................................................................... 4

2. Plaintiffs Adequately Alleged that Defendant

Had Knowledge of the Dashboard Glare Defect ..................... 7

3. Plaintiffs Adequately Provided Notice Under the

CLRA .................................................................................... 12

Plaintiffs Adequately Allege UCL Violations ................................. 14 B.

Plaintiffs Adequately Allege Breach of Implied C.

Warranty Pursuant to the Song-Beverly Consumer

Warranty Act ................................................................................... 15

Plaintiffs Adequately Allege Breach of Implied D.

Warranty Pursuant to the Magnuson-Moss Warranty

Act ................................................................................................... 18

Plaintiffs Adequately Allege a Claim for Unjust E.

Enrichment ...................................................................................... 20

Plaintiffs Are Entitled to Injunctive Relief ...................................... 20 F.

Porsche’s “Standing” Argument Is Inappropriate at the G.

Pleading Stage ................................................................................. 21

Plaintiffs’ Prayer for a Recall is not Improper ................................ 23 H.

III. CONCLUSION ......................................................................................... 25


Page ii Case No. CV 15-05766-GW (SSx)


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TABLE OF AUTHORITIES

FEDERAL CASES

Anderson v. Jamba Juice Co., 888 F. Supp. 2d 1000 (N.D. Cal.

2012) ............................................................................................................... 22

Arteaga v. Carmax Auto Superstores West Coast, Inc., No. 4-1888,

2014 U.S. Dist. LEXIS 95593 (C.D. Cal. 2014) ............................................. 18

Astiana v. Dreyer's Grand Ice Cream, Inc., Nos. C-11- 22 2910

EMC and C-11-3164 EMC, 2012 U.S. Dist. LEXIS 101371 (N.D.

Cal. July 20, 2012) .......................................................................................... 22

Avedisian v. Mercedes-Benz USA, LLC, 43 F. Supp. 3d 1071 (C.D.

Cal. Sept. 8, 2014) .......................................................................................... 17

Bruno v. Quten Research Inst., LLC 280 F.R.D. 524 (C.D. Cal. Nov.

14, 2011) ......................................................................................................... 21

Cal. Pro-Life Council, Inc. v. Getman, 328 F.3d 1088 (9th Cir. 2003) ................ 5

Chamberlan v. Ford Motor Co., 369 F. Supp. 2d 1138 (N.D. Cal.

2005) ................................................................................................................. 5

Clancy v. Bromley Tea Co., No. 12-cv-03003-JST, 2013 U.S. Dist.

LEXIS 112722 (N.D. Cal. Aug. 9, 2013) ........................................................ 22

Clark v. Time Warner Cable, 523 F.3d 1110 (9th Cir. 2008) ............................. 24

Ehrlich v. BMW of North America, LLC, 801 F. Supp. 2d 908 (C.D.

Cal. 2010) ......................................................................................................... 5

Falco v. Nissan, No. 13-00686, 2013 U.S. Dist. LEXIS 147060

(C.D. Cal. Oct. 10, 2013) ................................................................................ 15

Falk v. General Motors Corp., 496 F. Supp. 2d 1088 (N.D. Cal.

2007) ..................................................................................................... 6, 7, 8, 9

Gray v. BMW of North America, LLC, No. 13-cv-3417, 2014 U.S.

Dist. LEXIS 133337 (D.N.J. Sept. 23, 2014) .................................................... 4


Page iii Case No. CV 15-05766-GW (SSx)


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Grodzitsky v. Am. Honda Motor Co., No. 2:12-cv-1142, 2013 U.S.

Dist. LEXIS 82746 (C.D. Cal. Jun. 12, 2013) ............................................... 7, 9

In re 5-hour Energy Mktg. & Sales Practices Litig., MDL No. 13-

2438, 2014 U.S. Dist. LEXIS 149732, 2014 WL 5311272 (C.D.

Cal. Sept. 4, 2014) .......................................................................................... 20

In re MyFord Touch Consumer Litig., 46 F. Supp. 3d 936 (N.D. Cal.

2014) ................................................................................................................. 9

In re Porsche Cars N. Am., Inc. Plastic Coolant Tubes Litig, 880 F.

Supp. 2d 801 (S.D. Ohio 2012) ......................................................................... 8

In Re Sony Grand Wega KDF-E A10/A20 Series Projection HDTV

Television Litig., 750 F. Supp. 3d 1077 (S.D. Cal. 2010) ............................... 18

In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales

Practices, & Prods. Liab. Litig., 754 F. Supp. 1145 (C.D. Cal.

2010) ................................................................................................ 7, 11, 12, 19

In re Yahoo Mail Litigation, No. 13-CV-04980-LHK, 2015 U.S.

Dist. LEXIS 68585 (N.D. Cal. May 26, 2015) ................................................ 21

Iruzil v. Dole Food Co., 26 No. 12-cv-01831-LHK, 2013 U.S. Dist.

LEXIS 136921 (Sept. 23, 2013) ...................................................................... 22

Keegan v. Am. Honda Motor Co., Inc., 838 F. Supp. 2d 929 (C.D.

Cal. 2012) ..............................................................................................7, 15, 16

Keilholtz v. Superior Fireplace Co., No. 08-00836, 2009 U.S. Dist.

LEXIS 30732 (N.D. Cal. Mar. 30, 2009) .................................................... 5, 20

Koh v. S.C. Johnson &Son, Inc., No. C-09-00927 11 RMW, 2010

U.S. Dist. LEXIS 654 (N.D. Cal. Jan. 5, 2010) .............................................. 21

Kondracke v. Hanover Direct, Inc., No. CV 12- g 5630-CAS (SSx),

2012 U.S. Dist. LEXIS 161290 (C.D. Cal. Nov. 5, 2012) .............................. 21

Kowalsky v. Hewlett-Packard Co., No. 10-CV-02176, 2011 U.S.

Dist. LEXIS 89379 (N.D. Cal. Aug. 10, 2011) ................................................. 7


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MacDonald v. Ford Motor Co., No. 13-cv-02988-JST, 2014 U.S.

Dist. LEXIS 44858 (N.D. Cal. Mar. 31, 2014) ................................................. 9

Milicevic v. Mercedes-Benz USA, LLC, 256 F. Supp. 2d 1168 (D.

Nev. 2003) ...................................................................................................... 19

Mlejnecky v. Olympus Imaging Am., Inc., 2011 U.S. Dist. LEXIS

42333 (E.D. Cal. Apr. 18, 2011) ....................................................................... 7

Mui Ho v. Toyota Motor Corp., 931 F. Supp. 2d 987 (N.D. Cal.

2013) ........................................................................................................... 8, 15

Rahman v. Mott's LLP, 2014 U.S. Dist. LEXIS 147102 (N.D. Cal.

Oct. 14, 2014) ................................................................................................. 21

Rossi v. Whirlpool Corp., No. 2:12-cv-00125, 2013 U.S. Dist.

LEXIS 153682 (E.D. Cal. Oct. 25, 2013) ......................................................... 5

Tietsworth v. Sears, No. 5:09-CV-00288, 2010 U.S. Dist. LEXIS

44053 (N.D. Cal., Mar. 31, 2010) ................................................................... 12

Troup v. Toyota, 545 F. App’x 668 (9th Cir. 2013) ........................................... 17

Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012) ........................... 9

Winzler v. Toyota Motor Sales U.S.A., Inc., 681 F.3d 1208 (10th Cir.

June 18, 2012) ........................................................................................... 23, 24

STATE CASES

Bank of the West v. Superior Court, 2 Cal. 4th 1254 (1992) .............................. 20

Brand v. Hyundai Motor America, 226 Cal. App. 4th 1538 (2014) ................... 16

Daugherty v. American Honda Motor Co., Inc., 144 Cal. App. 4th

824 (2006) ......................................................................................................... 7

Hirsch v. Bank of Am., 107 Cal. App. 4th 708 (2003) ........................................ 19

Isip v. Mercedes–Benz USA, LLC, 155 Cal. App. 4th 19 (Cal. Ct.

App. 2007) ...................................................................................................... 16

McAdams v. Monier, Inc., 182 Cal. App. 4th 174 (2010) ..................................... 5

Morgan v. AT&T Wireless Services, Inc., 177 Cal. App. 4th 1235


Page v Case No. CV 15-05766-GW (SSx)


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(2009) .............................................................................................................. 14

Shapiro v. Sutherland, 64 Cal. App. 4th 1534 (1998) .......................................... 8

State Farm Fire & Casualty v. Sup. Ct., 45 Cal. App. 4th 1093

(1996) .............................................................................................................. 14

FEDERAL STATUTES

15 U.S.C. §§ 2301 et seq. (Magnuson-Moss Warranty Act

(MMWA)) ............................................................................................ 14, 18, 19

49 U.S.C. § 30118(a) .................................................................................... 23, 24

49 U.S.C. § 30118(c) .................................................................................... 23, 24

49 U.S.C. § 30118(c)(1) ..................................................................................... 24

49 U.S.C. § 30118(c)(2) ..................................................................................... 24

49 U.S.C. § 30119 .............................................................................................. 24

49 U.S.C. § 30119(a) .......................................................................................... 24

Fed. R. Civ. P. 9(b) .......................................................................................... 7, 8

STATE STATUTES

Cal. Bus. & Prof. Code § 17203 ......................................................................... 23

Cal. Bus. & Prof. Code §§ 17200 et seq. (Unfair Comp. Law (UCL)) ........ passim

Cal. Civ. Code § 1780(2) .................................................................................... 23

Cal. Civ. Code § 1780(5) .................................................................................... 23

Cal. Civ. Code § 1782 .................................................................................... 4, 13

Cal. Civ. Code § 1782(c) ............................................................................. passim

Cal. Civ. Code § 1793.22 ................................................................................... 19

Cal. Civ. Code §§ 1750 et seq. (Cons. Legal Remedies Act (CRLA)) ........ passim

Cal. Civ. Code §§ 1790-1795.7 (Song-Beverly Consumer Warranty

Act) ................................................................................................ 14, 15, 16, 18

Cal. Veh. Code § 26708(a)(2) .............................................................................. 1




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MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

Plaintiffs Roy Jones and Alyce Rubinfeld (“Plaintiffs”) purchased Porsche

vehicles that suffered from a serious safety defect—bright light reflecting from

the unusual, beige-colored dashboards can momentarily blind drivers, almost

opaque the windshield, and thereby severely impair the driver’s ability to see the

road (the “Windshield Glare”). First Amended Complaint (“FAC”) ¶ 2. For

example, in 2011, one class member complained to the National Highway

Traffic Safety Administration (“NHTSA”) that the defect causes the windshield

to become “almost opaque” and that “a near miss happened because of the

temporary blind spot.” FAC ¶ 7. This Windshield Glare actually renders the

Class Vehicles unsafe pursuant to the California Vehicle Code, which prohibits

driving vehicles “with any object or material placed, displayed, installed, affixed

or applied in or upon the vehicle that obstructs or reduces the drivers’ clear view

through the windshield or side windows.” California Vehicle Code

section 26708(a)(2).

Plaintiffs allege that Defendant Porsche Cars North America (“Defendant”

or “Porsche”) knew of and failed to disclose the Windshield Glare and thereby

violated the California Consumer Legal Remedies Act (“CLRA”) and

California’s Unfair Competition Law (“UCL”) and breached state and federal

warranty requirements.

In the opening paragraph of its Motion to Dismiss Plaintiffs’ First

Amended Complaint (“Motion”), Porsche attempts to minimize the Windshield

Glare, arguing it constitutes nothing more than reflections or “transparent

images” and arguing that Plaintiffs seek to hold Porsche “somehow responsible

for the quality and intensity of sunlight that reflects from the dashboards that

they chose...” This is not Plaintiffs’ case. Of course Porsche cannot control

sunlight, any more than it can control other variables on the road such as other




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drivers, obstacles, or rain. But when Porsche discovers that its vehicles are

unsafe as designed, even if a natural phenomenon plays a role in that danger,

Porsche's duty to disclose a safety risk remains.

Porsche further argues that the defect is “open and obvious to consumers

from their first encounter with a car.” Not so. Plaintiffs allege that they were

not aware of the defect prior to purchase because it “only manifests under certain

conditions, for example, when the sun is at a certain angle relative to the

dashboard and windshield.” FAC ¶ 6. At the pleading stage, averments of the

pleading must be considered as true, all inferences drawn in favor of the

Plaintiffs, and thus Porsche’s factual assertion to the contrary should be

disregarded.

Porsche attempts to sidestep Plaintiffs’ allegations that Porsche knew of

the Windshield Glare as early as 2011, a year that several customers complained

about the problem to the National Highway Traffic Safety Administration

(“NHTSA”). FAC ¶ 48. Plaintiffs attached to their complaint a 2011 letter sent

by one such consumer to Porsche’s CEO (made available through NHTSA1)

complaining that the Windshield Glare made it “very difficult to drive” and that

other class members were spending $5,000 to replace their Beige Dashboards

with black-colored dashes in order to remedy the problem. Porsche does not

argue that it did not receive such consumer complaints, nor that they were not

made as early as 2011. Instead, it argues that Plaintiffs “never allege that

[customer complaints to the NHTSA and on the internet] were communicated to

PCNA.” Notwithstanding the fact that every NHTSA complaint cited in the

1 Plaintiffs referenced and attached this letter to the FAC. However, to

review the letter on NHTSA’s website, and NHTSA’s response to the class member, See http://www.safercar.gov/Vehicle+Owners, click “search by Vehicles,” enter 2012 Porsche Panamera, click on “complaints,” and click on “Associated Documents” under NHTSA ID Number 10435732.




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FAC states, in one form or another, that Porsche was made aware of the failure2,

Plaintiffs further alleged that “Porsche has been aware of the Windshield Glare

since 2011, based on consumer complaints made to Porsche, including directly to

its CEO” (FAC ¶ 4), through “consumer complaints to NHTSA and resulting

notice from NHTSA” (FAC ¶ 8), and through “early consumer complaints on

websites and internet forums.” FAC ¶ 51. Porsche’s cited authority, finding

“undated” and “random” consumer complaints unconvincing, is inapposite here,

given that Plaintiffs cite several dated complaints made to NHTSA years before

the Plaintiffs’ purchases. Plaintiffs further demonstrate knowledge by alleging

that Porsche’s dealers told class members they could avoid the defect by wearing

polarized sunglasses, by buying aftermarket dashboard covers (FAC ¶ 57) or

even, as one dealer told a class member in 2011, by “plac[ing] a blanket over the

dashboard.” FAC ¶ 48(a).

Porsche also seeks to avoid its CLRA obligations by arguing that it is

insulated from liability because it sold its vehicles through its authorized

dealerships, rather than directly. Porsche has to rely primarily on legislative

history, sometimes taken out of context, because the weight of authority holds

that where an entity possesses exclusive knowledge of a defect and the defect is

material or safety related, the CLRA’s protections extend to that entity as well.

Porsche also asks this Court to dismiss Plaintiffs’ CLRA damages for inadequate

notice, while simultaneously admitting that Plaintiffs timely sent notice via

certified mail directly to Porsche’s Atlanta, Georgia, headquarters, to Porsche’s

agent for service in California, and further admitting that Porsche received and

responded to the notice, before the suit was filed. Porsche then attempts to use

its pre-litigation demand to inspect Plaintiffs’ vehicles as a “get out of jail free

2 See, e.g., FAC ¶ 48(c) (2012 complaint to NTHSA stating “the

manufacturer was made aware of the failure and advised the contact that the lighter colored dashboard could be replaced with a black dashboard.”)




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card,” to avoid complying with Civil Code § 1782(c), which provides that a class

action for damages may be maintained under § 1782 unless the defendant has:

(1) identified or made a reasonable effort to identify all similarly situated

consumers; (2) notified such consumers that upon their request it will provide

them with an appropriate remedy; (3) provided, or within a reasonable time will

provide, such relief; and (4) demonstrated that it has ceased, or within a

reasonable time will cease, from engaging in the challenged conduct. Porsche

has made no showing that it complied with Civil Code § 1782(c).

Further, Plaintiffs’ breach of implied warranty claim is well pled because

Plaintiffs here allege that the Windshield Glare causes dangerous conditions,

including momentarily blinding the driver and creating an almost opaque

windshield, thus rending the vehicles unmerchantable and unfit for use. Finally,

Plaintiffs were not required to pursue Porsche’s informal dispute resolution

process because California law does not require it, and even if it did, any pursuit

would have been futile by Porsche’s own admission.

Accordingly, Defendant’s Motion to Dismiss should be denied.

II. ARGUMENT

Plaintiffs Adequately Allege CLRA Violations A.

1. A Direct Transaction Is Not Required Under the CLRA

California Civil Code §1780 states:

“(a) Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by section 1770 may bring an action against that person to recover or obtain any of the following...

Defendant argues that Plaintiffs’ consumer protection claims should be

dismissed because they have not alleged that there was a direct transaction with

Porsche Cars North America, Inc.

California and federal courts, however, have repeatedly rejected this




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argument. Gray v. BMW of North America, LLC, No. 13-cv-3417, 2014 U.S.

Dist. LEXIS 133337, at *8 (D.N.J. Sept. 23, 2014) is instructive. There,

defendant argued that the CLRA cause of action should be dismissed because

plaintiffs did not allege any agreement or alleged representations between

plaintiffs and the parent company. Gray, 2014 U.S. Dist. LEXIS 133337 at *8.

The court rejected that argument, finding that, according to the weight of

authority, a “transaction” or direct sale or relationship is not necessary to allege a

CLRA claim. Id. Rather, where an entity possesses exclusive knowledge of a

defect and the defect is material or safety related, the CLRA’s protections extend

to that entity as well, regardless of whether the consumer dealt directly with the

entity. Id. See also McAdams v. Monier, Inc., 182 Cal. App. 4th 174, 186

(2010) (“We also pause here to note that a cause of action under the CLRA may

be established independent of any contractual relationship between the parties,”

citing Chamberlan v. Ford Motor Co., 369 F. Supp. 2d 1138, 1144 (N.D. Cal.

2005) (stating that “[p]laintiffs who purchased used cars have standing to bring

CLRA claims, despite the fact that they never entered into a transaction directly

withǁ the defendant auto manufacturer who manufactured, sold, and distributed

automobiles containing an allegedly defective engine part))3; Keilholtz v.

Superior Fireplace Co., No. 08-00836, 2009 U.S. Dist. LEXIS 30732, *6 (N.D.

Cal. Mar. 30, 2009) (rejecting defendants assertion that a CLRA claim could be

asserted only against defendants that sell goods or services directly to

consumers); Rossi v. Whirlpool Corp., No. 2:12-cv-00125, 2013 U.S. Dist.

LEXIS 153682, at *9 (E.D. Cal. Oct. 25, 2013) (…[W]here a manufacturer had

exclusive knowledge of a defect and the consumer relied upon that defect, the

3 Ehrlich v. BMW of North America, LLC, 801 F. Supp. 2d 908, 924 (C.D. Cal. 2010) (“The Court must defer to the California Court of Appeal’s interpretation of [a state statute] unless there is convincing evidence that the California Supreme Court would decide the matter differently”) (quoting Cal. Pro-Life Council, Inc. v. Getman, 328 F.3d 1088, 1099 (9th Cir. 2003)).




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CLRA’s protection extends to the manufacturer as well, regardless of whether

the consumer dealt directly with the manufacturer.)

Porsche proposes that “a transaction between plaintiff and defendant is an

essential component of any CLRA claim.” Motion at 5. In support, Porsche

quotes a letter from Assemblyman Hayes. The quotation reads: “the CLRA

“affects only those transactions between sellers and consumers of goods or

services. It is not intended to affect transactions between businessmen.”

Motion at 5 [Porsche’s added emphasis moved from sentence 1 to sentence 2].

The true meaning—that the CLRA does not cover business-to-business

transactions—is irrelevant to this action, as both Plaintiffs allege that they

purchased their vehicles “primarily for personal, family, or household use.”

FAC ¶¶ 19, 26.

Porsche’s case law is similarly inapposite. For example, Porsche cites

Schauer v. Mandarin Gems of Cal., Inc.,125 Cal. App. 4th 949 (2005), for the

proposition that “a transaction with the defendant forms the crux of a CLRA

claim.” Motion at 6-7. But Schauer involved a spouse suing a retailer over an

engagement ring that her ex-husband had bought for her. The Court held:

“Unfortunately for plaintiff, by statutory definition Erstad was the consumer

because it was he who purchased the ring.” Id. at 960. Schauer did not deal at

all with the issue of whether a consumer is precluded from suing a distributor or

manufacturer. It merely held, like Assemblyman Hayes’ letter, that one has to be

a consumer in order to sue under the CLRA.

In sum, the weight of authority holds that where an entity possesses

exclusive knowledge of a defect and the defect is material or safety related, the

CLRA’s protections extend to that entity as well. Porsche, which Plaintiffs

adequately allege had exclusive knowledge and actively concealed the defect,

should not be able to shield itself from CLRA liability here.




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2. Plaintiffs Adequately Alleged that Defendant Had

Knowledge of the Dashboard Glare Defect

There are four circumstances in which a duty to disclose arises: “(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.” See, e.g., Falk v. General Motors Corp., 496 F. Supp. 2d 1088,

1095 (N.D. Cal. 2007) (citation omitted). Here, Plaintiff has adequately alleged

that Defendant had a duty to disclose based on Defendant’s exclusive knowledge

and active concealment of a material fact. FAC, ¶¶ 50-55 (Exclusive

Knowledge); ¶¶ 56-59 (Active Concealment).

A safety related defect is per-se material. Therefore, a defendant has a

duty to disclose a safety risk. See, e.g., Keegan v. Am. Honda Motor Co., Inc.,

838 F. Supp. 2d 929, 944 (C.D. Cal. 2012); Falk, 496 F. Supp. 2d at 1096 (N.D.

Cal. 2007); Daugherty v. American Honda Motor Co., Inc., 144 Cal. App. 4th

824 (2006). Here, there is no dispute that the Windshield Glare is a safety risk.

As a threshold matter and in assessing Plaintiff’s knowledge allegations, it

is important to note that, by its very terms, Rule 9(b) does not apply to Plaintiffs’

allegations regarding Defendant’s knowledge. Fed. R. Civ. P. 9(b) (“knowledge,

and other conditions of a person's mind may be alleged generally”). This is

particularly so where, as here, the matter is “peculiarly within the opposing

party’s knowledge… prior to discovery.” Mlejnecky v. Olympus Imaging Am.,

Inc., No. 2:10-CV-02630, 2011 U.S. Dist. LEXIS 42333, *17 (E.D. Cal. Apr. 18,

2011). Thus, Plaintiff need only raise a plausible inference that Defendant knew,

or by the exercise of reasonable care should have known, of the Windshield

Glare at the time of sale. Kowalsky v. Hewlett-Packard Co., No. 10-CV-02176,

2011 U.S. Dist. LEXIS 89379, *11, 13-14 (N.D. Cal. Aug. 10, 2011); Grodzitsky




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v. Am. Honda Motor Co., No. 2:12-cv-1142, 2013 U.S. Dist. LEXIS 82746, at

*20 (C.D. Cal. Jun. 12, 2013). Before discovery, defendants necessarily have

superior (if not exclusive) knowledge about these sources of their own

knowledge. Accordingly, Plaintiffs’ allegations about these sources also may be

made on information and belief, accompanied, as they are, by allegations of the

facts upon which Plaintiffs’ belief is founded. See In re Toyota Motor Corp.

Unintended Acceleration Mktg., Sales Practices, & Prods. Liab. Litig., 754 F. Supp.

1145, 1189 (C.D. Cal. 2010).

Porsche was obligated to disclose the Windshield Glare because it was a

material fact within its exclusive knowledge. See Shapiro v. Sutherland, 64 Cal.

App. 4th 1534, 1544 (1998). Porsche asserts that Plaintiffs do not adequately

allege that Porsche knew about the Windshield Glare at the time of purchase

(Plaintiff Jones purchased his vehicle in 2014, and Plaintiff Rubinfeld purchased

hers in 2013). FAC ¶¶ 18, 25. Porsche also contends that Plaintiffs’ allegations

are insufficiently particular because they, for example, “have not described

PCNA’s ‘testing,’” nor “the volume and nature of its ‘dealership repair orders’. .

.” However, at the pleading stage, and when supported by complaints to NHTSA

dated back to 2011, a 2011 letter sent by a consumer Porsche’s CEO, (FAC ¶ 4),

and another Porsche entity’s decision to disclose the defect in overseas sales

brochures (FAC ¶ 10), Plaintiffs’ FAC sufficiently alleges Porsche’s knowledge

of the defect since 2011, if not before:

…Porsche knew about the Windshield Glare through sources not available to consumers, including: early consumer complaints about the Windshield Glare to Defendant’s dealers who are their agents for vehicle repairs; consumer complaints to NHTSA and resulting notice from NHTSA; early consumer complaints on websites and internet forums; dealership repair orders; testing conducted in response to owner or lessee complaints; and/or other internal sources of aggregate information about the problem

FAC ¶ 51. Courts routinely find similar allegations of exclusive knowledge




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sufficient under Rule 9(b). See Mui Ho v. Toyota Motor Corp., 931 F. Supp. 2d

987, 998 (N.D. Cal. 2013) (allegations that Defendants had “pre-release testing

data, early consumer complaints about the defect to Defendants’ dealers who are

their agents for vehicle repairs, dealership repair orders, testing conducted in

response to those complaints, and other internal sources” sufficiently alleged

Defendant’s exclusive knowledge of the defect); In re Porsche Cars N. Am., Inc.

Plastic Coolant Tubes Litig, 880 F. Supp. 2d 801, 816 (S.D. Ohio 2012) (same);

Falk, 496 F. Supp. 2d at 1096-97 (defendant’s access to similar data sufficient to

plead exclusive knowledge).

Consumer complaints to NHTSA are sufficient to impute knowledge. In

re MyFord Touch Consumer Litig., 46 F. Supp. 3d 936, 958 (N.D. Cal. 2014)

(“That there were such complaints is substantiated by the NHTSA complaints

identified by Plaintiffs. . . . Accordingly, for 12(b) (6) purposes, given all

reasonable inferences must be drawn in Plaintiffs’ favor, the Court finds that

Plaintiffs have adequately pled knowledge on the part of Ford.”]); MacDonald v.

Ford Motor Co., No. 13-cv-02988-JST, 2014 U.S. Dist. LEXIS 44858, at *9-10

(N.D. Cal. Mar. 31, 2014) (citing to consumer complaints and complaints

reported to NHTSA, among other things); Grodzitsky v. American Honda Motor

Co. Inc., 2013 U.S. Dist. LEXIS 82746, at *20 (C.D. Cal., June 12, 2013)

(plaintiffs provided a “‘sampling’ of complaints made to NHTSA, including

several complaints…made to NHTSA well before the sales of the Class Vehicles

[citations to complaint] . . . . Taken together, these allegations support a plausible

inference that Defendant saw and reviewed the specific complaints that were

made about the [defect].”).

Porsche’s reliance on Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th

Cir. 2012) is misplaced. The Plaintiffs in Wilson alleged “access to the

aggregate information and data regarding the risk of overheating,” as well as 14

customer complaints which were “undated or were made after the named




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plaintiffs had already purchased their laptops.” Wilson correctly recognized the

contrast between its Plaintiffs’ allegations of “access to aggregate information”

and those in Falk, where Plaintiffs alleged that General Motors had superior

knowledge and should have known the speedometers were defective due to

access to aggregate data from its dealers, pre-release testing data, and complaints

from its customers. These allegations adequately provide the basis for a claim of

exclusive knowledge. Wilson, 668 F. 3d at 1147 (Citing Falk, 496 F. Supp. 2d at

1096).

Further, while Wilson held that “undated” consumer complaints without

more are insufficient to support a knowledge inference, Plaintiffs here cite to

complaints to NTHSA in 2011, years before the Plaintiffs’ purchases in 2013 and

2014. One such complaint to NHTSA, cited in its entirety in the complaint,

states:

(2011 PORSCHE CAYENNE S 07/21/2011) TL* THE CONTACT OWNS A 2011 PORSCHE CAYENNE S. THE CONTACT STATED THAT AN EXTREME GLARE WAS REFLECTING FROM THE DASHBOARD ONTO THE WINDSHIELD, OBSTRUCTING HIS VISION. THE DEALER OFFERED TO PLACE A BLANKET OVER THE DASHBOARD AND ADVISED THE CONTACT TO NOTIFY THE MANUFACTURER. THE MANUFACTURER WAS MADE AWARE OF THE FAILURE. THE VEHICLE WAS NOT REPAIRED. THE APPROXIMATE FAILURE MILEAGE WAS400 AND THE CURRENT MILEAGE WAS 1,000.

FAC ¶ 48 (emphasis added).

Porsche acknowledges that its customers were publicly complaining about

the problem to NHTSA and online from 2011 onward. Porsche carefully argues,

however, that Plaintiffs have “not alleged Porsche’s knowledge of such

complaints.” Not so. First, all of the FAC’s NHTSA complaints, like the 2011

complaint quoted above, state, in one form or another, that Porsche was made

aware of the failure. See, e.g., FAC ¶¶ 48(c) (2012 complaint to NTHSA stating

“the manufacturer was made aware of the failure and advised the contact that the




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lighter colored dashboard could be replaced with a black dashboard.” See also

¶¶ 48(b),(d),(e),(f),(g). Second, Plaintiffs expressly allege that Porsche “knew

about the Windshield Glare through sources not available to consumers,

including: early consumer complaints to NHTSA and resulting notice from

NHTSA” as well as “early consumer complaints on websites and internet forms.”

FAC ¶ 51. Plaintiffs further allege that one such consumer complaint was

directed “directly to its CEO.” FAC ¶ 4.4

Plaintiffs further demonstrate Porsche’s knowledge of the Windshield

Glare, alleging that “[w]hen consumers present the Class Vehicles to an

authorized Porsche dealer for repair of the Windshield Glare… Porsche dealers

may… suggest that consumers purchase aftermarket dashboard covers or

purchase polarized sunglasses…” FAC ¶ 57. See also FAC ¶ 48(a) (Consumer

4 In a footnote, Porsche cites Klees v. Liberty Life Assur. Co. of Boston, ---

F. Supp. 3d. ---, No. 15-00992, 2015 U.S. Dist. LEXIS 81439, 2015 WL 3867659 at*2 (C.D. Cal. June 23, 2015), for the proposition that “because the authenticity of [the letter to Porsche’s CEO] is not disputed, it should not be considered now.” Motion at fn. 3, p. 9. But in Klees, Defendant asked the Court to consider certain documents referred to in Defendant’s Motion to Dismiss, and Plaintiffs disputed, not their authenticity, but instead whether the court should consider documents outside the pleadings. The court noted that “Plaintiff does not dispute the authenticity of these documents but argues that the Court should not consider most of them, as they are not attached to the complaint…” Id. [Emphasis added]. Indeed, the portion of the opinion immediately preceding Porsche’s quote states “Generally, on a motion to dismiss, if “matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment.” In contrast, Plaintiffs here referred to and attached the letter to the CEO in their First Amended Complaint, and it is therefore properly before the Court as a part of the pleadings. Porsche takes issue with the fact that the author’s contact information is redacted from the letter. As the letter, and NHTSA’s response to its author, appear on NHTSA’s website alongside the other consumer complaints cited in Plaintiffs’ complaint, it is apparent that NHTSA redacted the class member’s contact information before hosting his or her letter. To review the letter on NHTSA’s website, See http://www.safercar.gov/Vehicle+Owners, click “search by Vehicles,” enter 2012 Porsche Panamera, click on “complaints,” and click on “Associated Documents” under NHTSA ID Number 10435732.




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complaint made to NHTSA in July 2011 stating that “… THE DEALER

OFFERED TO PLACE A BLANKET OVER THE DASHBOARD AND

ADVISED THE CONTACT TO NOTIFY THE MANUFACTURER. THE

MANUFACTURER WAS MADE AWARE OF THE FAILURE.”

Plaintiffs also allege that Porsche dealerships will oftentimes simply deny

that there is anything wrong with their vehicles. FAC ¶¶ 57, 48(f). These

allegations are sufficient to establish Porsche’s active concealment of the

Windshield Glare. See In re Toyota, 754 F. Supp. 2d at 1192 (“Plaintiffs'

allegations that Toyota repeatedly denied the existence of the alleged SUA defect

(e.g., ¶¶ 236-41) are sufficient to demonstrate active concealment.) [citation

omitted]; Tietsworth v. Sears, No. 5:09-CV-00288, 2010 U.S. Dist. LEXIS

44053, at *23 (N.D. Cal., Mar. 31, 2010) (active concealment sufficiently

alleged where plaintiffs contacted defendant for service of defective machines

and were told there was no defect and/or denied free service or replacement

parts).

3. Plaintiffs Adequately Provided Notice Under the CLRA

Porsche does not dispute that Plaintiffs provided it with a CLRA notice

letter on behalf of similarly situated consumers5, nor that Porsche timely

received Plaintiffs’ CLRA notice letters. Rather, Porsche argues that Plaintiffs

did not provide sufficient notice under the CLRA because they did not send their

CLRA notice letter to the location where the transaction occurred, nor to

Porsche’s principle place of business in California, nor “through ‘the office of

the Secretary of State of California.’” (Motion at 12). Not so. Plaintiffs fully

complied with the CLRA notice requirements, sending their CLRA letters by

certified mail, return receipt requested, directly to Porsche’s headquarters in

5 See In Re Toyota, 754 F. Supp. 2d 1145, 1175 (explaining that a group of

plaintiffs can satisfy the CLRA notice requirements on behalf other named plaintiffs).




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Atlanta, Georgia (where the conduct and omissions at issue in this case emanated

from), and also to Porsche’s agent for service of process within California.

Motion at 11. Plaintiffs derived both of these addresses through the California

Secretary of State, which provides two addresses for Porsche Cars North

America, Inc.—one in Atlanta, Georgia, and the second at CT Corporation

System6. Most importantly, Plaintiffs’ CLRA notice did put Porsche on notice,

as Porsche admits. Id. at 12. Plaintiffs sent their CLRA notice to Porsche on

May 15, 2015, and Porsche sent a response letter thirteen days later on May 28,

2015, stating “[PCNA] received your letter dated May 15, 2015, that purports to

serve as a notice and demand under the [CLRA].” See Declaration of Stephen T.

Waimey, paragraph H and Exhibit H. Porsche has thus waived its argument

Plaintiffs’ efforts to notify them were insufficient. See Outboard Marine Corp.

v. Superior Court, 52 Cal. App. 3d 30, 41 (1975) (“OMC effectively waived the

notice provisions of the [CLRA] by its letter [which] provided in part “We have

received your letter… which we are treating as preliminary notice and demand

under [the CLRA notice provision].”

Porsche also cannot use its response letter as a “get-out-of-jail-free card,”

as Porsche’s letter did not comply with Civil Code § 1782(c). Civil Code §

1782(c) provides that a class action for damages may be maintained under

§ 1782 unless the defendant has: (1) identified or made a reasonable effort to

identify all similarly situated consumers; (2) notified such consumers that upon

their request it will provide them with an appropriate remedy; (3) provided, or

within a reasonable time will provide, such relief; and (4) demonstrated that it

has ceased, or within a reasonable time will cease, from engaging in the

challenged conduct. Id. These provisions exist, in part, to prevent prospective

6 See the California Secretary of State website, http://kepler.sos.ca.gov/,

and under “Entity Name,” type “Porsche Cars North America, Inc.”




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defendants from “picking off” plaintiffs one by one upon receiving a CLRA

notice letter, without correcting the violation as to all similarly situated

consumers.

Bruce v. Harley-Davidson, Inc., No. 09-6588, 2010 U.S. Dist. LEXIS

98180, at *22 (C.D. Cal. 2010) is instructive. In Bruce, Plaintiffs sent pre-suit

CLRA notice to Harley-Davidson on behalf of a class, notifying Harley-

Davidson of a class wide defect. As in the instant case, Harley-Davidson

responded to Plaintiffs with an “offer to inspect plaintiffs’ motorcycles,

investigate whether there are any defects, and … to ‘discuss remedies that may

satisfy [plaintiffs] and fully compensate them for their troubles.’” Id. at *17.

The Court held unequivocally that “because Plaintiffs’ demand letters were made

on behalf of a class of similarly situated consumers, section 1782(c) controls the

analysis. Section 1782(c) requires that in order to defeat a class action lawsuit…

the party alleged to have committed the unlawful practice must adequately notify

the members of the class and provide an opportunity for an appropriate remedy

for the defective goods.” Id. at 23. See also Kagan v. Gibraltar Sav. & Loan

Ass’n, 35 Cal.3d 582, 592-93 (1984) (finding “Harley’s [] attempt to remedy the

demands of individual named plaintiff are inadequate to preclude a class action”

because demand was made on behalf of similarly situated customers).

However, if Plaintiff did not comply with the CLRA notice requirement,

Plaintiffs respectfully request that the Court grant leave to amend so Plaintiffs

may correct any deficiencies. See Morgan v. AT&T Wireless Services, Inc., 177

Cal. App. 4th 1235, 1261 (2009) (holding that even where notice is not provided

or is otherwise inadequate before CLRA damages are sought, dismissal with

prejudice is not required and leave to amend should be granted.)

Plaintiffs Adequately Allege UCL Violations B.

The UCL prohibits unlawful, or unfair, or fraudulent business practices.

State Farm Fire & Casualty v. Sup. Ct., 45 Cal. App. 4th 1093, 1102 (1996).




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Here, Porsche has violated the UCL’s fraudulent prong by failing to disclose

material facts to consumers under the two independent bases for a disclosure

duty in California: exclusive knowledge and active concealment of material

facts. See, supra, § II (A)(2).

Porsche has violated the unlawful prong of the UCL by committing fraud

and otherwise violating the CLRA, implied warranty law under the Song-

Beverly Act, and the MMWA. See, supra, § II(A), and infra, §§ II(C)-(D).

“To determine if a business practice is unfair, the court must review the

evidence from both parties and weigh any legitimate utility of the practice

against the harm to consumers; this decision “cannot usually be made on

demurrer.” Id.; see also Keegan, 838 F. Supp. 2d at 938-39 (noting “broad”

scope and “sweeping” coverage of UCL and finding Honda violated unfair prong

of UCL by selling vehicles with alignment defect). Porsche has violated the

unfair prong of the UCL by, among other things, actively concealing the safety

defect. (See, supra, § II(A)(2); See also Falco v. Nissan, No. 13-00686, 2013

U.S. Dist. LEXIS 147060 *29 (C.D. Cal. Oct. 10, 2013) (finding well-pled

CLRA and Song-Beverly claims violate UCL’s unlawful prong); Ho, 931 F.

Supp. 2d at 1000 (finding unfair prong violated by failure to disclose safety

defects); Keegan, 838 F. Supp. 2d at 944 fn.50 (finding UCL’s “unlawful” and

“unfair” prongs violated based on well-pled CLRA claim.)).

Plaintiffs Adequately Allege Breach of Implied Warranty C.

Pursuant to the Song-Beverly Consumer Warranty Act

Porsche breached the implied warranty of merchantability under the Song-

Beverly Act by selling class vehicles that are not fit for their ordinary purpose of

providing reasonably reliable and safe transportation because the class vehicles

exhibited the Windshield Glare which existed at the time of sale. (FAC, ¶¶ 108-

114.) Porsche makes two arguments in its attempt to dismiss Plaintiffs’ Song-

Beverly Act implied warranty cause of action: (1) that the alleged does not




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prevent them from driving their vehicles and (2) that the defect is not actionable

because it is a “natural phenomenon.” Porsche’s arguments fail.

The Song-Beverly Act was enacted “to regulate warranties and strengthen

consumer remedies for breaches of warranty.” Keegan, 838 F. Supp. 2d at 944.

Under the Act, an implied warranty of merchantability guarantees that

“consumer goods meet each of the following: (1) Pass without objection in the

trade under the contract description; (2) Are fit for the ordinary purposes for

which such goods are used; (3) Are adequately contained, packaged, and labeled;

(4) Conform to the promises or affirmations of fact made on the container or

label.” Cal. Civ. Code § 1791.1(a). “[T]he implied warranty of merchantability

set forth in § 1791.1(a) requires… that a vehicle be reasonably suited for

ordinary use. It need not be perfect in every detail so long as it provides for a

minimum level of quality.” Keegan, 838 F. Supp. 2d at 945 (internal citation

omitted).

Defendant incorrectly argues that if Plaintiffs’ vehicles provide

transportation, then they are merchantable under Song Beverly. “California

courts ‘reject the notion that merely because a vehicle provides transportation

from point A to point B, it necessarily does not violate the implied warranty of

merchantability. A vehicle that smells, lurches, clanks, and emits smoke over an

extended period of time is not fit for its intended purpose.’” Keegan, 838 F.

Supp. 2d at 946 (quoting Isip v. Mercedes–Benz USA, LLC, 155 Cal. App. 4th

19, 27 (Cal. Ct. App. 2007)). See also Brand v. Hyundai Motor America, 226

Cal. App. 4th 1538, at 1546 (2014) (“a merchantable vehicle under the statute

requires more than the mere capability of ‘just getting from point ‘A’ to

point ‘B’.”)

Here, Plaintiffs allege that their vehicles’ dashes are designed in a manner

that can momentarily blind the driver, opaque the windshield, and thus severely

impair his or her ability to see the roadway. (FAC ¶ 2.) Such a condition would




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clearly render a vehicle unfit for driving. Indeed, as Plaintiffs alleged in the

FAC, “the existence of the Windshield Glare problem actually renders the Class

Vehicles unsafe and unfit to be driven on public roads pursuant to… California

Vehicle Code section 26708(a)(2) [which] provides: “A person shall not drive

any motor vehicle with any object or material placed, displayed, installed,

affixed or applied in or upon the vehicle that obstructs or reduces the drivers’

clear view through the windshield or side windows.”

Even if Porsche’s standard is used, putative class members have been

complaining that the Windshield Glare makes the Class Vehicles “very difficult

to drive”. (FAC ¶ 4.) One putative Class member even described the effects of

the Windshield Glare as “opaque”. (FAC ¶ 7.) A vehicle with an opaque

windshield—even a temporary one—is not safe to drive and therefore, not

merchantable or fit for use on public roadways.

Case law cited by Porsche actually supports Plaintiffs’ claims. A vehicle

with an almost opaque windshield that can momentarily blind a driver from the

roadway is not “in safe condition and substantially free of defects” and

definitively “implicates the vehicle’s operability.” Avedisian v. Mercedes-Benz

USA, LLC, 43 F. Supp. 3d 1071, 1079 (C.D. Cal. Sept. 8, 2014). Such a

condition also clearly and unequivocally “drastically undermine[s] the ordinary

operation of the vehicle.” Troup v. Toyota, 545 F. App’x 668, 669 (9th Cir.

2013).

Further, Porsche’s argument that Windshield Glare is a “natural

phenomenon” is a red-herring. Rain is a natural phenomenon, and manufacturers

must careful design their windshields to take rain into account. Porsche hints

that the issue here is a simple reflection of sunlight, (“a phenomenon that occurs

in every vehicle on the road”) but that is not the case. In the Class Vehicles, the

windshields can become almost opaque, hiding vehicles and pedestrians and

creating a very unsafe environment for the owner and other members of the




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public. It is difficult, if not impossible, to drive a vehicle when one cannot see

the road. Further, some consumers have had to go so far as to pay $5,000 to

remedy what Porsche would have the Court believe is merely a “natural

phenomenon.” In fact, another Porsche entity found it prudent to provide owners

in Germany with a disclosure of the Windshield Glare, but has thus far refused to

provide U.S. purchasers with the same courtesy. Porsche also states that the

Windshield Glare that can temporarily blind drivers and cause an almost opaque

windshield impacts all vehicles, but provides no iota of evidence. Such

unsupported declarations are worthy of no consideration or weight.

Plaintiffs Adequately Allege Breach of Implied Warranty D.

Pursuant to the Magnuson-Moss Warranty Act

Porsche argues that Plaintiffs’ Magnuson-Moss Warranty Act (“MMWA”)

claim should be dismissed for two reasons: (1) the MMWA is derivative of state

warranty law and if Plaintiffs’ Song-Beverly Claims are dismissed then so

should Plaintiffs’ MMWA claims; and (2) Plaintiffs failed to exhaust Porsche’s

informal dispute resolution process. Porsche’s arguments again fail.

Contrary to Porsche’s arguments, the MMWA creates an independent,

federal cause of action for breach of state law express and implied warranty

claims. See Arteaga v. Carmax Auto Superstores, No. 4-1888, 2014 U.S. Dist.

LEXIS 95593 at *16 (C.D. Cal. Jul. 11, 2014) (citing In Re Sony Grand Wega

KDF-E A10/A20 Series Projection HDTV Television Litig., 750 F. Supp. 3d

1077, 1102 (S.D. Cal. 2010)). Nevertheless, Plaintiffs have adequately pleaded a

cause of action under the Song-Beverly Act and therefore, even under Porsche’s

proposed standard, Plaintiffs’ cause of action should be sustained.

Porsche then argues that the claim is barred due to the failure to resort to

the pre-dispute procedure referred to in its warranty. But Porsche’s warranty

bars aggregate or class claims from being resolved through the pre-dispute

resolution process, and thus is inapplicable by its own terms. See, Exhibit J,




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pp. 7, 36:

CAP-Motors decisions will not include…Multiple Damages;

CAP-Motors decisions will not include: Attorney Fees; Punitive Damages;

Multiple Damages.

The warranty also concedes that if state law does not require the parties to

resort to the pre-dispute remedy, then a consumer is not required to access this

procedure. “However, if your state law permits, you are not required to use

CAP-MOTORS although that option is still available to you.” Exhibit J, p. 36.

Here, California law does not require a consumer to resort to Porsche’s

arbitration mechanism, and thus Porsche erroneously challenges the lawsuit on

this ground. Porsche’s warranty booklet confirms: “You are required to use

CA/CAP-Motors before asserting in court any rights or remedies conferred by

California Civil Code Section 1793.22. You are not required to use CA/CAP-

Motors before pursuing rights and remedies under any other state or federal

law.” Exhibit J., p. 39 [emphasis added]. Plaintiffs here are not pursuing

remedies under Civil Code Section 1793.22.

Additionally, the MMWA makes clear that the only informal dispute

resolution processes applicable are those that meet certain the minimum

requirements. 15 U.S. Code § 2310(a)(2) and (a)(3)(B). Porsche has made

absolutely no showing whatsoever that its CA/CAP-Motors informal dispute

resolution process meets the requirements set by the Commission.

Finally, and regardless of Porsche’s meritless arguments, the requirement

that a consumer pursue an informal dispute resolution process prior to pursuing

an MMWA claim has one important exception. If pursuing an informal dispute

resolution process would be futile, that requirement is excused. In re Toyota,

754 F. Supp. at 1189 (C.D. Cal. 2010) (citing Milicevic v. Mercedes-Benz USA,

LLC, 256 F. Supp. 2d 1168, 1179 (D. Nev. 2003).) Porsche has made it clear

that it considers the Windshield Glare, which can temporarily blind drivers and




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almost opaque the windshield, to be a mere “natural phenomenon” present in

every vehicle on the road. Thus, any pursuit of an informal dispute resolution

process would have been futile, and failure to do so what therefore excused. Id.

Accordingly, Plaintiffs’ Magnuson-Moss Warranty Act claims should not

be dismissed.

Plaintiffs Adequately Allege a Claim for Unjust Enrichment E.

Under California law, unjust enrichment claims can exist as a separate

cause of action when “the claim is grounded in equitable principles of

restitution.” Hirsch v. Bank of Am., 107 Cal. App. 4th 708, 721-22 (2003).

There is no dispute that restitution is permitted under the UCL. Bank of the West

v. Superior Court, 2 Cal. 4th 1254 (1992). Given that Plaintiffs state a valid

cause of action under their UCL claim, Defendant’s request for dismissal of

Plaintiffs’ unjust enrichment claim must be denied. Keilholtz, 2009 U.S. Dist.

LEXIS 30732, *10 (N.D. Cal. Mar. 30, 2009) (same). See also FAC, ¶¶ 127-131

(pleading facts showing that Defendant was unjustly enriched).

Plaintiffs Are Entitled to Injunctive Relief F.

Porsche cites In re 5-hour Energy Mktg. & Sales Practices Litig. for the

proposition that Plaintiffs are not entitled to injunctive relief because they cannot

claim a realistic threat of future injury. MDL No. 13-2438, 2014 U.S. Dist.

LEXIS 149732, 2014 WL 5311272, at *10 (C.D. Cal. Sept. 4, 2014) (“5-hour

Energy”). But the product at issue in 5-hour Energy is a beverage, not a vehicle.

The rationale in 5-hour Energy—that Plaintiffs, having already enjoyed and

finished their energy drink, are not at risk of future harm, given they have

learned of the misrepresentations and can prevent harm by simply not buying the

product anymore (Id at *26)—does not apply in the instant case.

Plaintiffs and the class here have alleged that they are literally at a risk of

future injury, as they own vehicles with a defect that puts them in danger on a

continual basis, and which will continue to affect them unless Porsche acts to




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correct the defect. See FAC ¶ 16. In their prayer for injunctive relief, for

example, Plaintiffs ask the Court to “remove, repair, and/or replace the Class

Vehicles’ components causing the Windshield Glare… with suitable alternative

product(s) that do not contain the defects alleged herein…” FAC ¶ 132(c).

Plaintiffs further allege that the defect has caused a diminution in value of their

vehicles. FAC ¶ 125. If Porsche does not repair the Windshield Glare, the class

vehicles’ resale value will diminish.

The issue of Article III standing is complex, and in food labeling cases is

apparently the subject of a 3-way split in the Ninth Circuit district courts. See

Rahman v. Mott's LLP, 2014 U.S. Dist. LEXIS 147102, *13-17 (N.D. Cal.

Oct. 14, 2014). Even assuming the instant facts are congruent to a food labeling

case (which they are not), other Courts have rejected the denial of injunctive

relief based on knowledge of the misrepresentation alone. See In re Yahoo Mail

Litigation, No. 13-CV-04980-LHK, 2015 U.S. Dist. LEXIS 68585, *22 (N.D.

Cal. May 26, 2015) (“Courts have repeatedly rejected this argument as

artificially precluding injunctive relief altogether.”)

In sum, on these allegations and at the pleading stage, the Court should not

dismiss Plaintiffs’ claims for injunctive relief.

Porsche’s “Standing” Argument Is Inappropriate at the G.

Pleading Stage

Porsche argues that Plaintiffs lack standing to raise claims related to

vehicles that they do not own, but disregards Plaintiffs’ allegations that the

defect itself is a “uniform” problem owing primarily to, among other factors, the

unusual beige coloring of the Class Vehicles’ dashboards. FAC ¶ 2. In essence,

Porsche seeks to brief Plaintiff’s typicality as a class representative at the

pleading stage. This is an inquiry suited for class certification, not a motion to

dismiss. See, e.g., Kondracke v. Hanover Direct, Inc., No. CV 12- g 5630-CAS

(SSx), 2012 U.S. Dist. LEXIS 161290, **7-8 (C.D. Cal. Nov. 5, 2012) (“neither




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a standing issue nor an Article III case or controversy issue, but is instead an

issue of whether the requirements of Rule 23 are met.”); see also Koh v. S.C.

Johnson &Son, Inc., No. C-09-00927 11 RMW, 2010 U.S. Dist. LEXIS 654, *7

(N.D. Cal. Jan. 5, 2010) (denying motion to dismiss and deferring ruling on

standing until class certification).

Bruno v. Quten Research Inst., LLC 280 F.R.D. 524, 530 (C.D. Cal. Nov.

14, 2011), states in this regard as follows:

District courts in California routinely hold that the issue of whether a class representative “may be allowed to present claims on behalf of others who have similar, but not identical, interests depends not on standing, but on an assessment of typicality and adequacy of representation.” Greenwood v. CompuCredit Corp., No. 08–04878 CW, 2010 WL 4807095, at *3 (N.D.Cal. Nov. 19, 2010); Arevalo v. Bank of Am. Corp., ––– F.Supp.2d ––––, 2011 WL 1195973, at *4 (N.D.Cal. Mar. 29, 2011). Treatises and other circuits reach the same conclusion. See Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 423 (6th Cir.1998) (holding that, because plaintiff had standing to sue for injury arising from his own benefit plan, his ability to represent class members with different benefit plans should be analyzed under Rule 23, not standing); 7AA Wright et al., Federal Practice and Procedure (3d 2005) § 1785.1. (quotations in original.)

Article III standing “does not seem to be the proper framework” for

deciding whether a plaintiff can assert claims based on products he or she did not

buy, as “transmogrifying typicality or commonality into an issue of standing

would undermine the well-established principles that ‘in a class action, standing

is satisfied if at least one named plaintiff meets the requirements.” Clancy v.

Bromley Tea Co., No. 12-cv-03003-JST, 2013 U.S. Dist. LEXIS 112722, *17

(N.D. Cal. Aug. 9, 2013) [citation omitted].

Even were the Court to consider this issue at this stage of the litigation,

“the critical inquiry seems to be whether there is sufficient similarity between the

products purchased and not purchased.” Astiana v. Dreyer's Grand Ice Cream,

Inc., Nos. C-11- 22 2910 EMC and C-11-3164 EMC, 2012 U.S. Dist. LEXIS




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101371, *33 (N.D. Cal. July 20, 2012); see also Anderson v. Jamba Juice Co.,

888 F. Supp. 2d 1000, 1005-06 (N.D. Cal. 2012) (analyzing “sufficient

similarity” between products purchased and not purchased by plaintiff and

denying defendant's motion to dismiss for lack of standing); see also Iruzil v.

Dole Food Co., 26 No. 12-cv-01831-LHK, 2013 U.S. Dist. LEXIS 136921,

**23-27 (Sept. 23, 2013) (denying motion to dismiss on Article III standing:

“Allowing [the plaintiff) to proceed with substantially similar claims based on

both products he purchased and substantially similar products he did not

purchase is a realistic approach that avoids parsing the question of injury too

finely.”])

Here, Plaintiffs’ and putative class members' claims are based on the same

core factual allegations and causes of action involving a uniform defect that is

common across all Class Vehicles. The defect, nondisclosures and Porsche’s

failures to provide adequate relief or remedies are the same as to all Class

Vehicles. Put simply, the defect itself is a “uniform” problem caused by the

beige coloring of the Class Vehicles’ dashboards. FAC ¶ 2. As a result, to the

extent this issue is even appropriate to consider at the pleading stage, Plaintiffs

have standing to pursue claims on behalf of the putative Class.

Thus, Porsche erroneously challenges Plaintiff’s standing since his Class

Vehicle’s beige-colored dashboard containing the same uniform (FAC ¶ 2)

Windshield Glare as all other Class Vehicles.

Plaintiffs’ Prayer for a Recall is not Improper H.

As part of their prayer for relief, Plaintiffs demand that the Court enjoin

Porsche into conducting a voluntary recall. FAC ¶ 132(c). Plaintiffs are well

within their rights to demand such relief. The Consumer Legal Remedies Act

allows for injunctive relief and any other relief the Court deems proper. Cal.

Civ. Code § 1780(2) & (5). So does the UCL. California Business &

Professions Code § 17203.




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There are two types of recalls performed under the auspices of NHTSA:

(1) voluntary recalls; and (2) involuntary recalls. See, e.g. Winzler v. Toyota

Motor Sales U.S.A., Inc., 681 F.3d 1208, 1213 (10th Cir. June 18, 2012) (“Some

recalls are initiated ‘voluntarily’ when a manufacturer alerts NHTSA to the

defect. 49 U.S.C. § 30118(c). Others are initiated ‘involuntarily’ when the

government discovers a defect after its own investigation. 49 U.S.C.

§ 30118(a).”) Voluntary recalls are initiated by the manufacturer by informing

NHTSA of its intent to do so, while involuntary recalls are initiated after

NHTSA has completed its own investigation into a defect. Id. The terms

“voluntary” and “involuntary,” when applied to recalls, are terms of art and

simply descriptive. In essence they mean that the manufacturer is either ordered

to conduct a recall by NHTSA when NHTSA, through its own investigation,

discovers a safety defect (49 U.S.C. § 30118(a)), or the manufacturer itself

decides to initiate a recall when the manufacturer discovers a defect (49 U.S.C.

§ 30118(c)). Both voluntary and involuntary recalls are limited to safety related

defects. 49 U.S.C. § 30118(c)(1) &(2).

Porsche does not, and cannot, argue that Plaintiffs’ fail to adequately

allege that the Windshield Glare is a safety defect. See FAC ¶¶ 45-49. 49

U.S.C. § 30118(c) provides a method by which a manufacturer who discovers a

safety related defect may conduct a recall on its own accord. The section

provides a specific procedure by which a manufacture may perform a

“voluntary” recall not initiated by NHTSA. 49 U.S.C. § 30118(c). Next, 49

U.S.C. § 30119 provides specific guidelines for the recall notifications that a

manufacture is required to send pursuant to either a voluntary or involuntary

recall. These notifications come directly from a manufacturer, not from

NHTSA. 49 U.S.C. § 30119(a).

The primary jurisdiction doctrine “is to be used only if a claim involves

an issue of first impression or a particularly complicated issue Congress has




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committed to a regulatory agency.” Clark v. Time Warner Cable, 523 F.3d 1110,

1114 (9th Cir. 2008). Here, only involuntary recalls are initiated by NHTSA.

Winzler, 681 F.3d 1208 at 1213 (10th Cir. June 18, 2012). A “voluntary” recall

may be, and in the instant case, would be, initiated through actions of a vehicle

manufacturer. Plaintiffs’ complaint simply contains a prayer for relief asking

that the Court enjoin Porsche into performing an action—a “voluntary” safety

recall. Porsche may conduct a voluntary recall on its own accord. Thus the

doctrine of primary jurisdiction does not apply, and Plaintiffs’ prayer for a recall

is not improper.

III. CONCLUSION

For the foregoing reasons, the motion to dismiss should be denied. Should

the Court determine that Plaintiffs’ allegations are insufficient in any manner,

Plaintiffs respectfully request leave to amend.7

Dated: September 24, 2015 Respectfully submitted, Capstone Law APC

By: /s/ Cody R. Padgett Jordan L. Lurie Robert K. Friedl Tarek H. Zohdy Cody R. Padgett Attorneys for Plaintiffs Roy Jones and Alyce Rubinfeld

7 Plaintiffs made their prior amendment following a meet and confer under

the Local Rules to narrow the issues for a potential motion to dismiss. If amendment is necessary, Plaintiffs should be provided the opportunity to do so following the Court’s ruling on the actual motion to dismiss.


OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6) · Case No. CV 15-05766-GW (SSx) PLAINTIFFS’ MEMORANDUM...

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