Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-00497/USCOURTS-cand-3_06-cv-00497-4/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CASEY SNYDER et al.,

Plaintiffs,

 v.

FORD MOTOR COMPANY,

Defendant.

 /

No. C-06-0497 MMC

ORDER GRANTING MOTION TO

DISMISS; VACATING HEARING

(Docket No. 23)

Before the Court is defendant Ford Motor Company’s (“Ford”) motion, filed June 29,

2006, to dismiss the instant action, pursuant to Rule 9(b) of the Federal Rules of Civil

Procedure, or, in the alternative, for a more definite statement, pursuant to Rule 12(e). 

Plaintiffs Casey Snyder, Richard Smith, and Jesse Scott (collectively, “plaintiffs”) have filed

opposition to the motion; Ford has filed a reply. Having considered the papers filed in

support of and in opposition to the motion, the Court finds the matter appropriate for

resolution without oral argument, see Civil L.R. 7-1(b), VACATES the August 25, 2006

hearing, and rules as follows.

BACKGROUND

The instant action is a purported class action for damages and injunctive relief

against Ford on behalf of a class consisting of all persons who “(a) reside in California and

who currently own or lease Ford Focus vehicles that were manufactured for sale within the

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2000 through 2006 model years (‘Class Vehicle’) and/or (b) who paid to repair or replace

an ignition lock in a Class Vehicle,” regardless of whether they still own or lease that

vehicle and regardless of whether they continue to reside in California. (See Second

Amended Complaint (“SAC”) ¶¶ 9, 21.) 

Plaintiffs allege Ford has manufactured, marketed, distributed and sold “Ford Focus

vehicles whose ignition locks have an inordinate propensity to fail prematurely, making it

inordinately difficult or impossible to insert the key into the ignition switch or to start Class

Vehicles’ engines, despite the fact that they are designed to last for the life of the vehicle

without the need for service or maintenance.” (See id. ¶ 10.) Plaintiffs further allege said

“Ignition Lock Defect” puts consumers at risk of being stranded in circumstances that can

imperil their safety. (See id. ¶ 11.) 

Plaintiffs further allege Ford officers and employees were aware, before Ford began

to offer the Focus for sale in the 2000 model year, that the Ignition Lock Defect would

cause Ford Focus ignition locks to fail prematurely. (See id. ¶ 12.) Plaintiffs allege that

Ford “intentionally failed to disclose and/or actively concealed” the Ignition Lock Defect

from them. (See id. ¶ 12.). Additionally, plaintiffs allege, “Ford knew that the Ignition Lock

Defect would cause substantial numbers of Focus ignition locks to fail outside the 36-

month/36,000-mile limited warranty” and “has wrongfully refused to bear the cost of repair

and replacement beyond the warranty period . . . despite its knowledge of the Ignition Lock

Defect when it placed Class Vehicles into commerce, and despite the fact that the Ignition

Lock Defect affects replacement ignition locks as well, thereby requiring Class Members to

bear the substantial costs associated with repairing the problem multiple times.” (See id. ¶

17.) Lastly, plaintiffs allege that Ford, “[h]aving concealed the information it possessed

about the Ignition Lock Defect,” deprived class members “of the ability to make an informed

decision about purchasing or leasing Class Vehicles, and also deprived them of the ability

to bargain for compensation . . . for the existence of the Ignition Lock Defect.” (See id. ¶

17.)

Plaintiffs assert claims against Ford for (1) declaratory relief; (2) fraudulent

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concealment/nondisclosure; (3) unjust enrichment; (4) deceptive practices in violation of the

Consumers Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750 et seq.; and (5) unfair,

fraudulent, and unlawful conduct in violation of § 17200 of the California Business and

Professions Code. 

LEGAL STANDARDS

A. Rule 9(b)

Rule 9(b) of the Federal Rules of Civil Procedure provides that “[i]n all averments of

fraud or mistake, the circumstances constituting fraud or mistake shall be stated with

particularity.” See Fed. R. Civ. P. 9(b). Rule 9(b) serves to give defendants adequate

notice to allow them to defend against a charge of fraud and to deter the filing of complaints

as a pretext for the discovery of unknown wrongs, to protect defendants from the harm that

comes from being subject to fraud charges, and to prohibit plaintiffs from “unilaterally

imposing upon the court, the parties, and society enormous social and economic costs

absent some factual basis.” See In re Stac Electronics Sec. Litig., 89 F.3d 1399, 1405 (9th

Cir. 1996) (quoting Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985)).

To comply with Rule 9(b), a plaintiff must plead “with particularity” the time and place

of the fraud, the statements made and by whom made, an explanation of why or how such

statements were false or misleading when made, and the role of each defendant in the

alleged fraud. See In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1547-49 and n.7 (9th Cir.

1994) (en banc); Lancaster Community Hospital v. Antelope Valley Hospital District, 940

F.2d 397, 405 (9th Cir. 1991); see also Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066

(9th Cir. 2004) (holding Rule 9(b) requires a plaintiff to “state the time, place, and specific

content of the false representations as well as the identities of the parties to the

misrepresentation”). 

Where the allegations in support of a claim fail to satisfy the heightened pleading

requirements of Rule 9(b), the claim is subject to dismissal. See Vess v. Ciba-Geigy Corp.

USA, 317 F.3d 1097, 1107 (9th Cir. 2003). Dismissal for failure to comply with Rule 9(b)

“should ordinarily be without prejudice . . . if it appears at all possible that the plaintiff can

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correct the defect.” See id. at 1108 (internal quotation and citation omitted).

B. Rule 12(e)

Pursuant to Rule 12(e), a party may move for a more definite statement where the

complaint “is so vague or ambiguous that a party cannot reasonably be required to frame a

responsive pleading[.]” See Fed. R. Civ. P. 12(e).

DISCUSSION

Ford argues that the instant complaint is subject to dismissal because all of plaintiffs’

claims are “grounded in fraud” and plaintiffs have not pleaded the asserted fraud with the

particularity required by Rule 9(b).

Where a plaintiff “allege[s] a unified course of fraudulent conduct and rel[ies] entirely

on that course of conduct as the basis of a claim . . . , the claim is said to be ‘grounded in

fraud’ or to ‘sound in fraud,’ and the pleading of that claim as a whole must satisfy the

particularity requirement of Rule 9(b).” See Vess, 317 F.3d at 1103-04. 

The elements of a cause of action for fraud “based on concealment are: (1) the

defendant must have concealed or suppressed a material fact, (2) the defendant must have

been under a duty to disclose the fact to the plaintiff, (3) the defendant must have

intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the

plaintiff must have been unaware of the fact and would not have acted as he did if he had

known of the concealed or suppressed fact, and (5) as a result of the concealment or

suppression of the fact, the plaintiff must have sustained damage.” See Lovejoy v, AT&T

Corp., 119 Cal. App. 4th 151, 157-58 (2004). Here, plaintiffs allege that (1) Ford was

aware of the Ignition Lock Defect before it offered the Focus for sale to the public; (2) Ford

intentionally concealed that information from plaintiffs; (3) Ford was under a duty to

disclose to plaintiffs “the true character, quality, and nature of the Class Vehicles and to

disclose the existence of the Ignition Lock Defect”; (4) because of Ford’s concealment,

plaintiffs did not discover and could not have discovered the Ignition Lock Defect through

the exercise of reasonable diligence; and (5) Ford thereby deprived plaintiffs of the ability to

make an informed decision about purchasing or leasing a Focus vehicle and deprived them

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 In light of this ruling, the Court does not reach Ford’s alternative motion for a more

definite statement.

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of the ability to bargain for compensation for the Ignition Lock Defect. (See SAC ¶¶ 12, 17,

19.) Each cause of action asserted in the Second Amended Complaint incorporates by

reference each of the above allegations. (See SAC ¶¶ 31, 36, 43, 47, 52.) Accordingly,

the Court finds that each cause of action is “grounded in fraud” and that each cause of

action must be pleaded with the particularity required by Rule 9(b).

Ford contends the complaint fails to comply with Rule 9(b) because plaintiffs fail to

allege with particularity what facts Ford should have disclosed, as well as to whom, when

and how those facts should have been disclosed. Pursuant to Rule 9(b), Ford is entitled to

notice of “the specific fraudulent conduct against which [it] must defend.” See Bly-McGee

v. California, 236 F.3d 1014, 1018 (9th Cir. 2001). Put another way, “[a]verments of fraud

must be accompanied by the who, what, when, where, and how of the misconduct

charged.” See, e.g., Vess, 317 F.3d at 1106 (internal quotation and citation omitted). 

Turning first to the “what” requirement, plaintiffs’ allegations are deficient in part. 

Plaintiffs have sufficiently pleaded the nature of the claimed defect; in essence, plaintiffs

allege the subject ignition locks are designed to never fail and that plaintiffs’ locks have

failed. Plaintiffs’ allegations as to the incidence of such failures are stated only in

conclusory terms, however, and thus fail to plead with sufficient particularity what plaintiffs

assert should have been disclosed.

As to the “who,” “where,” “when,” and “how” requirements, plaintiffs’ allegations are

wholly deficient. Plaintiffs fail to plead any facts indicating the circumstances surrounding

the acquisition of their respective vehicles. Plaintiffs do not allege, for example, from

whom, where, and when they acquired such vehicles, nor do they allege how and when

Ford should have conveyed to them the claimed concealed information.

Accordingly, the Court will grant Ford’s motion to dismiss the action, pursuant to

Rule 9(b).1

CONCLUSION

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For the reasons set forth above, Ford’s motion to dismiss is hereby GRANTED, and

the Second Amended Complaint is DISMISSED with leave to amend. Plaintiff may file an

amended complaint no later than September 22, 2006.

This order terminates Docket No. 23.

IT IS SO ORDERED.

Dated: August 24, 2006 MAXINE M. CHESNEY

United States District Judge

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