Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-15-55924/USCOURTS-ca9-15-55924-0/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

GEORGE WILLIAMS; LORENDA 

OVERMAN; GERALD CHIARIELLO, II;

STEVE OETEGENN; CHARLES 

PENCINGER; BRIAN GILDERMAN;

JOSEPH RAMOS; ADAM DANIEL 

JACKS; PHILIP KIRSOPP; WILLIAM 

KRATZ; WILLIAM NEFF; JAMES R.

KRAPF, on behalf of themselves and 

all others similarly situated,

Plaintiffs-Appellants,

and

MARK D. COOPERMAN; GERALD L.

WASHINGTON; ERNEST PAUL 

CAMILLERI, JR.; SCOTT MARKOWITZ;

JOE DIORIO; THOMAS BLATT;

MATTHEW J. BONZELLA; JOE 

GARSETTI,

Plaintiffs,

v.

YAMAHA MOTOR CO. LTD.;

YAMAHA MOTOR CORPORATION,

U.S.A.,

Defendants-Appellees.

No. 15-55924

D.C. No.

2:13-cv-05066-

BRO-VBK

OPINION

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2 WILLIAMS V. YAMAHA MOTOR CORP.

Appeal from the United States District Court

For the Central District of California

Beverly Reid O’Connell, District Judge, Presiding

Argued and Submitted February 16, 2017

Pasadena, California

Filed March 24, 2017

Before: MILAN D. SMITH, JR. and JOHN B. OWENS, 

Circuit Judges, and ALVIN K. HELLERSTEIN, District 

Judge.*

Opinion by Judge Milan D. Smith, Jr.

 * The Honorable Alvin K. Hellerstein, United States Senior District 

Judge for the Southern District of New York, sitting by designation.

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WILLIAMS V. YAMAHA MOTOR CORP. 3

SUMMARY**

Personal Jurisdiction / Consumer Fraud Law

The panel affirmed the district court’s dismissal of 

Yamaha Motor Co. Ltd. (YMC) for lack of personal 

jurisdiction, and Fed. R. Civ. P. 12(b)(6) dismissal of 

plaintiffs-appellants’ claims against Yamaha Motor 

Corporation, U.S.A. (YMUS), in an action alleging 

violations of federal and state warranty law and other claims, 

brought by appellants who purchased allegedly defective 

outboard motors that YMC designed and manufactured in 

Japan and that YMUS imported and marketed in California.

The panel held that the district court lacked general 

jurisdiction over YMC. Specifically, the panel held that 

YMC itself did not have sufficient contacts with California 

for the exercise of general jurisdiction. The panel also held 

that appellants failed to plead sufficient facts to make out a 

prima facie case that YMC and YMUS were “alter egos.” 

The panel noted that even assuming that YMUS’s contacts 

could be imputed to YMC, that did not, on its own, suffice 

to establish general jurisdiction.

The panel held that the district court lacked specific 

jurisdiction over non-resident YMC. Specifically, the panel 

held that appellants did not allege any action that YMC 

“purposefully directed” at California. Assuming that some 

standard of agency continued to be relevant to specific 

jurisdiction after Daimler AG v. Bauman, 134 S. Ct. 746, 759 

 ** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.

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4 WILLIAMS V. YAMAHA MOTOR CORP.

n.13 (2014), the panel held that appellants failed to make out 

a prima facie case for any such agency relationship between 

YMC and YMUS and its in-state connections.

The panel held that appellants failed to plead a prima 

facie case of consumer fraud. The panel held that contrary 

to the district court, appellants adequately pleaded YMC and 

YMUS’s presale knowledge of the alleged defect. The panel 

also held, however, that appellants failed to plausibly plead 

that the alleged defect caused an unreasonable safety hazard.

COUNSEL

Van Bunch (argued), Bonnett Fairbourn Friedman & Balint 

P.C., Phoenix, Arizona; Charles Clinton Hunter and Debra 

Brewer Hayes, The Hayes Law Firm PC, Houston, Texas;

for Plaintiffs-Appellants.

Theane Evangelis Kapur (argued), Michael Holocek, and 

Timothy W. Loose, Gibson Dunn & Crutcher LLP, Los 

Angeles, California, for Defendant-Appellee.

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WILLIAMS V. YAMAHA MOTOR CORP. 5

OPINION

M. SMITH, Circuit Judge:

This appeal challenges two separate rulings by the 

district court: the dismissal of Defendant-Appellee Yamaha 

Motor Co. Ltd. (YMC) for lack of personal jurisdiction, and 

the dismissal of Plaintiffs-Appellants’ claims against 

Defendant-Appellee Yamaha Motor Corporation, U.S.A. 

(YMUS) pursuant to Federal Rule of Civil Procedure 

12(b)(6). For the reasons set forth in this opinion, we affirm

the district court on both accounts.

FACTUAL AND PROCEDURAL BACKGROUND

Appellants are a group of twenty named plaintiffs who 

purchased “first-generation . . . four stroke outboard motors” 

(the Class Motors) manufactured by YMC from 2000 to 

2004. Appellants brought suit against YMC, which designed 

and manufactured the Class Motors in Japan, and YMC’s 

wholly-owned subsidiary, YMUS, which imported and 

marketed them in California. Appellants allege that the 

Class Motors contained an inherent design defect that caused 

severe, premature corrosion in the motors’ dry exhaust 

system. Appellants assert that this defect caused the motors 

to fail after between 500 to 700 hours of use, even when 

properly serviced and maintained, when absent this defect an 

outboard motor would have an expected useful life of at least 

2000 hours. Although the alleged defect manifests early in 

an engine’s expected lifespan, the average recreational 

boater only uses her engine an average of 100 hours per year. 

Accordingly, the defect typically will not manifest until the 

three-year warranty period has expired. Appellants assert on 

appeal that Appellees knew of the dry exhaust defect prior 

to the sales of the Class Motors to Appellants, and that the 

defect poses an unreasonable safety hazard.

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6 WILLIAMS V. YAMAHA MOTOR CORP.

Appellant Williams filed the initial complaint on behalf 

of himself and all others similarly situated on July 15, 2013, 

naming YMC and YMUS as defendants. The complaint 

asserted claims for violations of federal and state warranty 

law; California’s Consumer Legal Remedies Act, California 

Civil Code § 1750; and California’s Unfair Competition 

Law, California Business and Professions Code § 17200.

Appellees filed a motion to dismiss, in response to which 

Appellants filed an amended complaint. YMUS then filed a 

second motion to dismiss for failure to state a claim, and 

YMC filed a motion to dismiss for lack of personal 

jurisdiction. While these motions were pending, the district 

court consolidated this matter with two similar cases and 

vacated all pending motions, after which Appellants filed a 

consolidated class action complaint. The consolidated 

complaint contained, in addition to the claims asserted in the 

initial complaint, ten new statutory claims from five 

different states, as well as claims for negligence and unjust 

enrichment.

YMUS subsequently filed a third motion to dismiss for 

failure to state a claim, and YMC filed a second motion to 

dismiss for lack of personal jurisdiction. On August 19, 

2014, the district court granted in part YMUS’s motion, 

dismissing Appellants’ warranty and consumer fraud claims, 

and granting YMC’s motion in its entirety. Appellants then 

filed their first amended complaint, to which YMUS 

responded with a fourth motion to dismiss. The district court 

granted YMUS’s motion entirely, but granted Appellants 

leave to replead their consumer fraud claims.

Finally, on February 2, 2015, Appellants filed their 

second amended complaint (SAC), to which YMUS 

responded with its fifth motion to dismiss for failure to state 

a claim. On April 29, 2015, the district court granted 

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WILLIAMS V. YAMAHA MOTOR CORP. 7

YMUS’s motion and dismissed Appellants’ only remaining 

claims with prejudice. Appellants now appeal the district 

court’s grant of YMC’s motion to dismiss for lack of 

personal jurisdiction, and its grant of YMUS’s fifth motion 

to dismiss Appellants’ consumer fraud claims. 

JURISDICTION AND STANDARD OF REVIEW

We exercise jurisdiction over appeals from final 

decisions of the district court pursuant to 28 U.S.C. § 1291. 

We review de novo a district court’s dismissal of a party for 

lack of personal jurisdiction pursuant to Federal Rule of 

Civil Procedure 12(b)(2). Mavrix Photo, Inc. v. Brand 

Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). We 

similarly conduct de novo review of “a district court’s 

dismissal for failure to state a claim pursuant to Federal Rule 

of Civil Procedure 12(b)(6).” Walker v. Beard, 789 F.3d 

1125, 1131 (9th Cir. 2015).

ANALYSIS

I. The District Court Lacked General Jurisdiction Over 

YMC

Federal courts apply state law to determine the bounds 

of their jurisdiction over a party. See Fed. R. Civ. P. 

4(k)(1)(A). California’s long-arm statute permits the 

exercise of jurisdiction to the full extent that such exercise 

comports with due process. Cal. Code Civ. P. § 410.10.

Under Goodyear Dunlop Tires Operations, S.A. v. 

Brown, 564 U.S. 915 (2011), courts have general jurisdiction 

over a foreign corporation only if the corporation’s 

connections to the forum state “are so ‘continuous and 

systematic’ as to render [it] essentially at home in the forum 

State.” Id. at 919. A corporation’s “continuous activity of 

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8 WILLIAMS V. YAMAHA MOTOR CORP.

some sorts within a state is [generally] not enough to support 

the demand that the corporation be amenable to suits 

unrelated to that activity.” Int’l Shoe Co. v. Washington, 

326 U.S. 310, 318 (1945). Rather, in the paradigmatic 

circumstance for exercising general jurisdiction, the 

corporate defendant is incorporated or has its principal place 

of business in the forum state. Goodyear, 564 U.S. at 924.

In Daimler AG v. Bauman, 134 S. Ct. 746 (2014), the 

Supreme Court considered for the first time “whether a 

foreign corporation may be subjected to a court’s general 

jurisdiction based on the contacts of its in-state subsidiary.” 

Id. at 759. The plaintiffs sought to sue Daimler, a German 

corporation, in California on the basis that Daimler’s 

subsidiary’s contacts could be attributed to Daimler under an 

agency theory, thereby establishing Daimler’s “continuous 

and systematic” presence within California. Id. at 752. 

Daimler’s subsidiary, MBUSA, served as Daimler’s 

exclusive U.S. importer and distributor and had multiple 

California facilities. Id. We found general jurisdiction over 

Daimler under an agency theory, applying a test that asked 

whether MBUSA’s services were “sufficiently important to 

the foreign corporation that if it did not have a representative 

to perform them, the corporation’s own officials would 

undertake to perform substantially similar services.” 

Bauman v. DaimlerChrysler Corp., 644 F.3d 909, 921 (9th 

Cir. 2011) (quoting Doe v. Unocal Corp., 248 F.3d 915, 928 

(9th Cir. 2001) (emphasis omitted)).

The Supreme Court reversed our finding of general 

jurisdiction, emphasizing that the test for general jurisdiction 

asks whether a corporation is essentially “at home” in the 

forum state. Daimler, 134 S. Ct. at 754, 757. The Supreme 

Court assumed that MBUSA could be considered “at home” 

in California, and that its in-state contacts could be attributed 

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WILLIAMS V. YAMAHA MOTOR CORP. 9

to Daimler, but it rejected a theory that would permit “the 

exercise of general jurisdiction in every State in which a 

corporation ‘engages in a substantial, continuous, and 

systematic course of business.’” Id. at 760–61. In so doing, 

the Court noted that while general jurisdiction is not strictly 

limited to a corporation’s place of incorporation or principal 

place of business, those exemplars illustrate the need for 

predictability in jurisdiction and “afford plaintiffs recourse 

to at least one clear and certain forum in which a corporate 

defendant may be sued on any and all claims.” Id. at 760.

Subsequently, in Ranza v. Nike, Inc., 793 F.3d 1059 (9th 

Cir. 2015), we considered whether an in-state corporation’s 

contacts could be attributed to its foreign subsidiary to 

establish general jurisdiction over the subsidiary. See id. at 

1065. We stated that while Daimler invalidated our previous 

“agency” test, it “left intact” the alternative “alter ego test 

for ‘imputed’ general jurisdiction.” Id. at 1071. We made 

clear, however, that the parent-subsidiary relationship does 

not on its own establish two entities as “alter egos,” and thus 

does not indicate that general jurisdiction over one gives rise 

to general jurisdiction over the other. Id. at 1070 (citing Dole 

Food Co. v. Patrickson, 538 U.S. 468, 474 (2003); United 

States v. Bestfoods, 524 U.S. 51, 61 (1998)). Rather, we held 

that “the alter ego test may be used to extend personal 

jurisdiction to a foreign parent or subsidiary when, in 

actuality, the foreign entity is not really separate from its 

domestic affiliate.” Id. at 1073 (emphasis omitted). To 

satisfy this test, “a plaintiff must make out a prima facie case 

(1) that there is such unity of interest and ownership that the 

separate personalities of the two entities no longer exist and 

(2) that failure to disregard their separate identities would 

result in fraud or injustice.” Id. (quotation marks and 

alterations omitted).

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10 WILLIAMS V. YAMAHA MOTOR CORP.

We first consider whether YMC itself has sufficient 

contacts with California for the exercise of general 

jurisdiction. We conclude that it does not.

YMC is incorporated and has its principal place of 

business in Japan, and has no offices or employees in 

California. Considering YMC’s California sales, “the 

general jurisdiction inquiry examines a corporation’s 

activities worldwide—not just the extent of its contacts in 

the forum state—to determine where it can be rightly 

considered at home.” Ranza, 793 F.3d at 1071 (citing 

Daimler, 134 S. Ct. at 762 n.20). Appellants’ own evidence 

indicates that YMC has 109 consolidated subsidiaries 

located in at least 26 different countries and spanning five 

continents. It further shows that in 2012, net sales in North 

America—a figure that includes sales in all 50 states and 

Canada, not merely in California—accounted for 

approximately 17% of YMC’s total net sales. While the 

California market may be important for YMC, Appellants 

failed to submit evidence to support a finding that YMC is 

“at home” in California.1

Nevertheless, Appellants argue that YMUS’s California 

contacts may be imputed to YMC for the purpose of 

establishing jurisdiction. Appellants fail, however, to plead 

facts sufficient to make out a prima facie case that YMC and 

YMUS are “alter egos.” Appellants’ complaint makes 

almost no factual allegations regarding the nature of the 

parent-subsidiary relationship, and the evidence Appellants 

 1 This is particularly so in light of the Supreme Court’s rejection of 

the “stream of commerce” theory for general jurisdiction. Goodyear, 

564 U.S. at 927–29.

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WILLIAMS V. YAMAHA MOTOR CORP. 11

submitted in opposition to YMC’s motion to dismiss did not 

provide any additional clarity.

Moreover, even assuming that YMUS’s contacts could 

be imputed to YMC, this does not, on its own, suffice to 

establish general jurisdiction. In Daimler, the Court 

assumed that the subsidiary’s in-state contacts could be 

imputed to the foreign parent, but nevertheless found the 

exercise of general jurisdiction inappropriate. 2 134 S. Ct. at 

760.

 2 Appellants cite out-of-circuit district court cases, Barriere v. 

Juluca, No. 12-23510-CIV, 2014 WL 652831 (S.D. Fla. Feb. 19, 2014), 

and Associated Energy Group, LLC v. Air Cargo Germany GMBH, 24 F. 

Supp. 3d 602, 607 (S.D. Tex. 2014), to argue that the district court had 

general jurisdiction over YMC due to (1) YMUS’s status as a codefendant in this case, (2) the allegation of in-state harm, and (3) YMC’s 

status as a foreign corporation. These arguments lack merit. Daimler’s 

holding did not rest on whether the in-state entity was a party, and the 

location of the alleged harm has no role in the general jurisdiction 

analysis. Regarding YMC’s status as a foreign corporation, Daimler and 

Ranza both also dealt with foreign corporations with no United States 

principal place of business.

Appellants further argue that YMUS’s contacts with California 

render this case distinguishable from Daimler, because the subsidiary in 

Daimler was not a California corporation. Again, this is a distinction 

without a difference: The Supreme Court expressly assumed that the 

subsidiary in that matter was properly subject to general jurisdiction in 

California. Daimler, 134 S. Ct. at 760. Finally, Appellants point to 

numerous other lawsuits YMC has litigated in the United States. See

Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199 (1996); Rissew 

v. Yamaha Motor Co., 129 A.D.2d 94 (N.Y. App. Div. 1987); Stephens 

v. Yamaha Motor Co., 627 P.2d 439 (Okla. 1981). But none of these 

cases found that California courts may exercise general jurisdiction over 

YMC. Accordingly, they have no relevance to the jurisdictional inquiry 

in this matter.

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12 WILLIAMS V. YAMAHA MOTOR CORP.

In short, the district court correctly found that it lacked 

general jurisdiction over YMC.

II. The District Court Lacked Specific Jurisdiction Over 

YMC

The exercise of jurisdiction over a non-resident 

defendant requires that the defendant “have certain 

minimum contacts . . . such that the maintenance of the suit 

does not offend traditional notions of fair play and 

substantial justice.” Int’l Shoe, 326 U.S. at 316 (internal 

quotation marks omitted). In order for a court to have 

specific jurisdiction over a defendant, “the defendant’s suitrelated conduct must create a substantial connection with the 

forum State.” Walden v. Fiore, 134 S. Ct. 1115, 1121 

(2014). The relationship between the defendant and the 

forum state “must arise out of contacts that the ‘defendant 

[itself]’ creates with the forum State.” Id. at 1122 (quoting 

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). 

Additionally, the requisite “minimum contacts” must be 

“with the forum State itself, not . . . with persons who reside 

there.” Id.

We will exercise specific jurisdiction over a non-resident 

defendant only when three requirements are satisfied: (1) the 

defendant either “purposefully direct[s]” its activities or 

“purposefully avails” itself of the benefits afforded by the 

forum’s laws; (2) the claim “arises out of or relates to the 

defendant’s forum-related activities; and (3) the exercise of 

jurisdiction [] comport[s] with fair play and substantial 

justice, i.e., it [is] reasonable.” Dole Food Co. v. Watts, 

303 F.3d 1104, 1111 (9th Cir. 2002).

Addressing the first prong of the specific jurisdiction 

analysis, Appellants do not allege any actions that YMC 

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WILLIAMS V. YAMAHA MOTOR CORP. 13

“purposefully directed” at California.3 Appellees submitted 

unrebutted evidence in support of their Rule 12(b)(2) motion 

that YMC does not conduct any activities within the state of 

California, nor does it target California via marketing or 

advertising. The only connection Appellants identify 

between YMC and California is via YMUS. Accordingly, 

we must ask whether YMUS’s in-state connections may be 

attributed to YMC under an agency theory for the purpose of 

establishing specific jurisdiction.4

While Daimler voided our agency approach for imputing 

contacts for the purpose of general jurisdiction, it left open 

the question of whether an agency relationship might justify 

the exercise of specific jurisdiction. Daimler, 134 S. Ct. at 

759 n.13 (“Agency relationships, we have recognized, may 

 3 Appellants’ citation to Sinatra v. National Enquirer, Inc., 854 F.2d 

1191, 1197 (9th Cir. 1988), for the proposition that “a nonresident 

defendant may purposefully direct its conduct toward a forum state by 

marketing the product through a distributor who has agreed to act as the 

sales agent in the forum State” is unavailing. The Sinatra court 

specifically found that the plaintiff actively directed the advertising and 

sales efforts of its in-state agent, thereby justifying the exercise of 

specific jurisdiction. Id. It contrasted this conduct with that found 

insufficient to support specific jurisdiction in Asahi Metal Industry Co.

v. Superior Court of Solano County, 107 S. Ct. 1026 (1987). The Asahi

defendant knew that its products would be sold and used in California, 

and benefited economically from those sales, but “[t]he Court relied on 

the absence of any business solicitation or promotional conduct to 

determine that . . . the exertion of personal jurisdiction was 

unreasonable.” Sinatra, 854 F.2d at 1197 (citing Asahi, 107 S. Ct. at 

1033). The facts of the present matter bear far more similarity to those 

of Asahi than to those of Sinatra.

4 As discussed supra, Appellants have failed to make a prima facie 

showing that YMC and YMUS are alter egos. YMUS’s contacts can 

thus only be attributed to YMC if we find that the agency theory of 

imputed contacts applies.

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14 WILLIAMS V. YAMAHA MOTOR CORP.

be relevant to the existence of specific jurisdiction”). 

Appellees point to Walden’s emphasis on the necessity of a 

relationship between the defendant itself and the forum state 

to suggest that YMUS’s relationship to California cannot 

support specific jurisdiction over YMC. But Walden did not 

address an agency theory of jurisdiction. Rather, that case 

dealt with the scenario in which the connection between the 

defendant and the forum was provided only by the plaintiff, 

and could aptly be described as “random, fortuitous, or 

attenuated.” 134 S. Ct. at 1123 (citation omitted). This 

contrasts sharply with the circumstance at hand, in which the 

relationship between the in-state entity and the defendant is 

that of a parent and a subsidiary purportedly acting as that 

parent’s agent. If an agency theory of imputable contacts 

survives Daimler in the context of specific jurisdiction, then 

Walden’s directive that contacts must be directly between 

the defendant and the forum is inapposite, because imputing 

an in-state entity’s contacts to the defendant would 

necessarily establish that direct connection.

Notwithstanding Daimler’s express reservation on the 

question of agency theory’s application to specific 

jurisdiction, more than one district court within our circuit 

has expressed some uncertainty on that point post-Daimler, 

as “the rationale set forth in Daimler . . . would seem to 

undermine application of [our agency test] even in specific 

jurisdiction cases.” Corcoran v. CVS Health Corp., 169 F. 

Supp. 3d 970, 982 (N.D. Cal. 2016) (quoting Los Gatos 

Mercantile, Inc. v. E.I. DuPont De Nemours & Co., No. 13-

cv-01180-BLF, 2015 WL 4755335, at *5 (N.D. Cal. Aug. 

11, 2015)).

As noted supra, our agency analysis asks whether the 

subsidiary “performs services that are sufficiently important 

to the foreign corporation that if it did not have a 

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WILLIAMS V. YAMAHA MOTOR CORP. 15

representative to perform them, the corporation’s own 

officials would undertake to perform substantially similar 

services.” Unocal, 248 F.3d at 928 (internal quotation marks 

omitted). The Supreme Court found in Daimler that, 

“[f]ormulated this way, the inquiry into importance stacks 

the deck, for it will always yield a pro-jurisdiction answer: 

Anything a corporation does through an independent 

contractor, subsidiary, or distributor is presumably 

something that the corporation would do ‘by other means’ if 

the independent contractor, subsidiary, or distributor did not 

exist.” 134 S. Ct. at 759 (internal quotation marks omitted). 

This criticism applies no less in the context of specific 

jurisdiction than in that of general jurisdiction. Accordingly, 

Daimler’s reasoning is clearly irreconcilable with the agency 

test set forth in Unocal. See Miller v. Gammie, 335 F.3d 889, 

892–93 (9th Cir. 2003) (holding that where a prior decision 

in our circuit “is clearly irreconcilable with the reasoning or 

theory of intervening higher authority, a three-judge panel 

should consider itself bound by the later and controlling 

authority, and should reject the prior circuit opinion as 

having been effectively overruled.”). The Daimler Court’s 

express recognition of the potential viability of agency 

relationships for establishing specific jurisdiction does not 

alter our holding. While the Court reserved judgment on the 

viability of agency theory as a general concept, it did not 

suggest that our particular formulation for finding an agency 

relationship should survive in the context of specific 

jurisdiction. To the contrary, the Daimler Court’s criticism 

of the Unocal standard found fault with the standard’s own 

internal logic, and therefore applies with equal force 

regardless of whether the standard is used to establish 

general or specific jurisdiction.

Assuming, however, that some standard of agency 

continues to be “relevant to the existence of specific

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16 WILLIAMS V. YAMAHA MOTOR CORP.

jurisdiction,” Daimler, 134 S. Ct. at 759 n.13, Appellants fail 

to make out a prima facie case for any such agency 

relationship. Fundamental tenets of agency theory require 

that an agent “act on the principal’s behalf and subject to the 

principal’s control.” Restatement (Third) Of Agency § 1.01 

(2006); see also Batzel v. Smith, 333 F.3d 1018, 1035 (9th 

Cir. 2003) (“Agency requires that the principal maintain 

control over the agent’s actions”). Accordingly, under any 

standard for finding an agency relationship, the parent 

company must have the right to substantially control its 

subsidiary’s activities. See, e.g., Unocal, 248 F.3d at 926; 

Murphy v. DirecTV, Inc., 724 F.3d 1218, 1232 (9th Cir. 

2013). Appellants neither allege nor otherwise show that 

YMC had the right to control YMUS’s activities in any 

manner at all.5 Consequently, even assuming the validity of 

some formulation of agency analysis such that a subsidiary’s 

contacts could be attributed to its parent, Appellants failed 

to establish specific jurisdiction over YMC.

III. Plaintiffs Failed to Plead a Prima Facie Case of 

Consumer Fraud

Federal Rule of Civil Procedure 8(a)(2) requires only 

that a plaintiff provide “a short and plain statement of the 

claim showing that the pleader is entitled to relief,” such that 

the defendant receives “fair notice” of the claims against it. 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) 

 5 Appellants do allege that “Defendants . . . were the agents or 

employees of each other and were acting at all times within the course 

and scope of such agency and employment . . . and are legally 

responsible because of their relationship with their co-Defendants.” This 

is, however, a conclusory legal statement unsupported by any factual 

assertion regarding YMC’s control over YMUS (or regarding any other 

aspect of the parent-subsidiary relationship), and we accordingly do not 

credit it. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

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WILLIAMS V. YAMAHA MOTOR CORP. 17

(citation omitted). A sufficiently pleaded cause of action 

“requires more than labels and conclusions, and a formulaic 

recitation of the elements of a cause of action will not do.” 

Id. Rather, “[f]actual allegations must be enough to raise a 

right to relief above the speculative level.” Id.; see also 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The 

requirement that a plaintiff provide “plausible grounds” for 

her claim does not, however, “impose a probability 

requirement at the pleading stage.” Twombly, 550 U.S. at 

556. On the contrary, “a well-pleaded complaint may 

proceed even if it strikes a savvy judge that actual proof of 

those facts is improbable, and that a recovery is very remote 

and unlikely.” Id. (internal quotation marks omitted).

Appellants’ SAC asserts claims under a number of state 

consumer fraud statutes, each of which requires either an 

affirmative misrepresentation or an omission of material 

fact.6 Appellants allege no affirmative misrepresentation. 

Rather, they rely entirely on YMUS’s failure to notify 

consumers of the alleged dry exhaust defect. To state a claim 

for failing to disclose a defect, a party must allege “(1) the 

 6 Appellants have asserted claims under the California Consumers 

Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq.; California Unfair 

Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq.; 

Massachusetts Consumer Protection Act, Mass. Gen. L., Ch. 93A, § 2; 

N.Y. Gen. Bus. L. § 349; North Carolina Unfair and Deceptive Trade 

Practices Act, N.C. Gen. Stat. §§ 75-1.1, et seq.; Washington Consumer 

Protection Act, Wash. Rev. Code §§ 19.86.010, et seq.; Florida 

Deceptive and Unfair Trade Practices Act, Fla. Stat. §§ 501.201, et seq.; 

Texas Deceptive Trade Practices Act, Tex. Bus. & Com. Code §§ 17.12, 

et seq.; Rhode Island Unfair Trade Practice and Consumer Protection 

Act, R.G.G.L. §§ 6-13.1.1, et seq.; Virginia Consumer Protection Act, 

Va. Code. Ann. §§ 59.1-200, et seq.; Maryland Consumer Protection 

Act, Md. Code, Com. L. §§ 13-301, et seq.; New Jersey Consumer Fraud 

Act, N.J. Stat. §§ 56:8-1, et seq.; and Connecticut Unfair Trade Practices 

Act, Conn. Gen. Stat. §§ 42-110a, et seq.

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18 WILLIAMS V. YAMAHA MOTOR CORP.

existence of a design defect; (2) the existence of an 

unreasonable safety hazard; (3) a causal connection between 

the alleged defect and the alleged safety hazard; and that the 

manufacturer knew of the defect at the time a sale was 

made.” Apodaca v. Whirlpool Corp., No. 13-00725 JVS 

(ANx), 2013 WL 6477821, at *9 (C.D. Cal. Nov. 8, 2013); 

see also Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 

1142–43 (9th Cir. 2012) (holding that where a defendant has 

not made an affirmative misrepresentation, a plaintiff must 

allege the existence of an unreasonable safety hazard and a 

causal connection between the defect and the hazard).

Contrary to the district court, we find that Appellants 

adequately pleaded Appellees’ presale knowledge of the 

alleged dry exhaust defect. However, we also find that 

Appellants failed to plausibly plead that the alleged defect 

constituted an unreasonable safety hazard. We therefore 

affirm the district court’s dismissal of Appellants’ consumer 

fraud claims pursuant to Rule 12(b)(6).

A. Appellants Adequately Pleaded Appellees’ 

Presale Knowledge of the Alleged Dry Exhaust 

Defect

The SAC alleges that YMUS began receiving consumer 

complaints regarding dry exhaust corrosion as early as 2001. 

It states that “the complaints from owners regarding the dry 

exhaust corrosion in the First Generation Outboards were so 

frequent that individual Customer Relations supervisors 

personally handled as many as 40 or 50 different consumer 

complaints, or more, regarding the issue,” which was an 

unusually high number of complaints for Yamaha to receive 

regarding corrosion “this soon in the life of the engines.” 

The SAC goes on to explain that the high volume of calls led 

to the creation of “a marine-only customer relations service 

department in Kennesaw, Georgia, with approximately two 

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WILLIAMS V. YAMAHA MOTOR CORP. 19

dozen customer service employees to assist in handling the 

complaints,” and identifies Lindsey Foster as the Manager 

of Customer Relations who reviewed the complaints handled 

by the Kennesaw facility. Finally, the SAC explains how 

consumer complaints were recorded and transmitted by the 

Kennesaw facility so as to make YMUS management aware 

of the number and substance of the complaints, and states 

that Ms. Foster specifically reviewed the submitted 

complaints through YMUS’s private Customer Relations 

Management (CRM) database.

The district court found that the alleged consumer 

complaints did not support a finding of YMUS’s presale 

knowledge, and agreed with YMUS’s characterization of 

Appellants’ allegations of 2001 customer complaints as 

“inherently inconsistent with [their] overarching theory of 

the defect” because Appellants had “consistently alleged that 

the defect does not manifest until 500–700 hours of use, 

‘which for a typical consumer using the boat 100 hours a 

year would take five to seven years to achieve.’” Williams 

v. Yamaha Motor Corp., U.S.A., 106 F. Supp. 3d 1101, 1114 

(C.D. Cal. 2015) (emphasis added by district court)). The 

district court ignored, however, Appellants’ allegation that 

“the corrosion problem (which typically took 500 to 700 

engine hours to manifest) had surfaced first primarily among 

heavy users who used their engines much more than typical 

recreational boat owners’ usage.” It was not “inherently 

inconsistent” to allege that a subset of “heavy users” 

encountered the defect much sooner than the typical user 

otherwise would.

The district court also cited multiple cases, from within 

this circuit and elsewhere, to illustrate the disfavored nature 

of customer complaints as a basis for establishing a party’s 

presale knowledge. These cases are, however, 

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20 WILLIAMS V. YAMAHA MOTOR CORP.

distinguishable. The district court particularly cited Wilson 

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

its observation that “[s]ome courts have expressed doubt that 

customer complaints in and of themselves adequately 

support an inference that a manufacturer was aware of a 

defect,” because “complaints posted on a manufacturer’s 

webpage ‘merely establish the fact that some consumers 

were complaining.’” Id. at 1147 (quoting Berenblat v. 

Apple, Inc., Nos. 08-4969 JF (PVT), 09-1649 JF (PVT), 

2010 WL 1460297, at *9 (N.D. Cal. Apr. 9, 2010)). The 

facts of Wilson, however, differ significantly from those 

alleged here: Wilson concerned fourteen complaints, and the 

plaintiffs did not identify “where or how the complaints were 

made” and did not provide dates for twelve of the 

complaints. Id. at 1148. We found that absent dates to 

indicate that the complaints were made pre-sale, and some 

evidence that defendant actually received the complaints, it 

would be speculative at best to find that the defendant knew 

of the alleged defect. See id. at 1147. Here, by contrast, 

Appellants gave at least approximate timing for the 

complaints, and explained in detail how those complaints 

were lodged, how YMUS responded, and the mechanism 

through which information travelled from consumers to 

YMUS management.7

 7 At oral argument, counsel for Appellees emphasized that while 

YMUS may have known of the dry exhaust corrosion, it did not know of 

an unreasonable safety hazard. This argument elides two separate 

prongs of the test for consumer fraud: presale knowledge of a defect, and 

the status of that defect as an unreasonable safety hazard. See Apodaca, 

2013 WL 6477821, at *9. In other words, counsel argued that the defect 

did not pose the safety risk necessary for a finding of consumer fraud. 

As discussed infra, we agree. That does not negate, however, YMUS’s 

alleged presale knowledge of the premature corrosion itself.

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WILLIAMS V. YAMAHA MOTOR CORP. 21

Wilson did not hold that consumer complaints may never 

support an allegation of presale knowledge. On the contrary, 

it cited to—and distinguished—Cirulli v. Hyundai Motor 

Co., No. SACV 08-0854 AG (MLGx), 2009 WL 5788762 

(C.D. Cal. June 12, 2009), in which the plaintiff successfully 

alleged presale knowledge of a defect largely through its 

allegation that, 

Since 1999, [Defendant] has . . . constantly 

tracked the National Highway Traffic Safety 

Administration . . . database to track reports 

of defective Sonata sub-frames. From this 

source, [Defendant] knew that its 1999–2004 

Sonatas were experiencing unusually high 

levels of sub-frame deterioration, steering 

control arm separation, steering loss, and 

highway accidents.

Wilson, 668 F.3d at 1146 (quoting Cirulli, 2009 WL 

5788762, at *4). The facts alleged by the SAC are 

remarkably similar to those alleged in Cirulli, and provide 

an even stronger basis for finding presale knowledge 

because rather than tracking an outside database, YMUS is 

alleged to have set up its own proprietary complaint-tracking 

system to account for a similarly “unusually high level[]” of 

corrosion complaints. Id.8

 8 The district court cases cited by the court in this matter are 

similarly distinguishable from the case at hand. Each of those cases dealt 

with an insufficiently small number of complaints, complaints posted in 

forums unrelated to the defendant, complaints made after the sale dates, 

or some combination of these circumstances. See, e.g., Fisher v. Honda 

North Am., Inc., No. LA CV13-09285 JAK (PLAx), 2014 WL 2808188, 

at *5 (C.D. Cal. June 12, 2014) (finding a single consumer complaint 

predating the sale date did not plausibly suggest that defendant was on 

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22 WILLIAMS V. YAMAHA MOTOR CORP.

Importantly, Appellees have filed a motion to dismiss, 

not a motion for summary judgment. Discovery has not yet 

occurred. The district court faulted Appellants for failing to 

provide specific names and dates for consumer complaints, 

but in doing so it ignored the context of the particular 

consumer complaint system alleged by Appellants. 

Appellants specifically allege a private internal complaint 

system, and describe the manner in which it functions and 

the individual supervisor responsible for its management. In 

other words, Appellants do not know names and dates 

precisely because these complaints are not the sort of public 

internet posts that courts have previously found insufficient 

for providing notice to a company. Pre-discovery, when the 

court must take Appellants’ factual allegations as true, 

Appellants’ description of a separate consumer response 

 

notice of a defect); Grodzitsky v. Am. Honda Motor Co., No. 2:12-cv1142-SVW-PLA, 2013 WL 690822, at *7 (C.D. Cal. Feb. 19, 2013) 

(finding insufficient ten complaints submitted after sale to plaintiffs or 

posted to websites unrelated to defendant); Baba v. Hewlett-Packard

Co., No. C 09-05946 RS, 2011 WL 317650, at *3 (N.D. Cal. Jan. 28, 

2011) (“Awareness of a few customer complaints . . . does not establish 

knowledge of an alleged defect.”); Oestriecher v. Alienware Corp., 

544 F. Supp. 2d 964, 974 n.9 (N.D. Cal. 2008) (“Random anecdotal 

examples of disgruntled customers posting their views on websites at an 

unknown time is not enough to impute knowledge upon defendants.”).

Here, by contrast, Appellants allege that individual supervisors dealt 

with “40 or 50” consumer complaints, an “unusual volume,” as early as 

2001. While the numbers “40 or 50” lack context from which the court 

could determine whether or not that is truly a sizable volume, YMUS’s 

alleged response to those complaints—the establishment of a dedicated 

customer care center—suggests that YMUS itself saw this number as 

significant and beyond the norm. Moreover, unlike cases in which 

complaints were posted to online forums, here Appellants allege not only 

that complaints were made directly with YMUS, but that YMUS 

affirmatively responded to this unusual volume of complaints by 

instituting a dedicated customer care center.

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WILLIAMS V. YAMAHA MOTOR CORP. 23

system dedicated to handling an unusually high volume of 

complaints specific to premature corrosion in F-Series 

motors supports a claim of presale knowledge.

B. Appellants Failed to Plead the Existence of an 

Unreasonable Safety Hazard

Appellants proffer two theories of unreasonable hazard 

resulting from the dry exhaust defect: (1) the potential for 

onboard fires, and (2) the risk of accident and associated 

injuries due to loss of steering power. However, Appellants’ 

claim that the dry exhaust defect poses an unreasonable 

safety hazard fails due to Appellants’ own characterization 

of the defect. According to Appellants’ allegations, the 

purported defect merely accelerates the normal and expected 

process of corrosion in outboard motors. In other words, 

Appellants do not assert that the corrosion would not or 

should not occur absent the defect, they merely contend that 

the defect causes corrosion to occur earlier in a motor’s 

lifetime than a consumer would otherwise expect. Were we 

to conclude that Appellants’ allegations of premature but 

otherwise normal wear and tear plausibly establish an 

unreasonable safety hazard, we would effectively open the 

door to claims that all of Yamaha’s outboard motors 

eventually pose an unreasonable safety hazard. The factual

allegations here do not support either conclusion.

Additionally, the alleged safety risk is speculative and 

unsupported by factual allegations. Where a plaintiff alleges 

a sufficiently close nexus between the claimed defect and the 

alleged safety issue, the injury risk need not have come to 

fruition. See Apodaca, 2013 WL 6477821, at *9; Ehrlich v. 

BMW of. N. Am., LLC, 801 F. Supp. 2d 908, 918 (C.D. Cal. 

2010). Nevertheless, a party’s allegations of an 

unreasonable safety hazard must describe more than merely 

“conjectural and hypothetical” injuries. Birdsong v. Apple, 

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24 WILLIAMS V. YAMAHA MOTOR CORP.

Inc., 590 F.3d 955, 961 (9th Cir. 2009). Here, the SAC lacks 

any allegations indicating that any customer, much less any 

plaintiff, experienced such a fire—a notable omission if the 

alleged unreasonable safety hazard arises in all Yamaha 

outboard motors sooner or later.

We further note that the standard is one of an 

“unreasonable” safety risk. The loss of steering power, 

while plausibly hazardous, is a potential boating condition 

of which Yamaha expressly warns consumers. Moreover, 

the nature of the alleged defect as being primarily one of 

accelerated timing rather than the manifestation of a wholly 

abnormal condition weighs against its characterization as 

“unreasonable.”

Finally, the fact that the alleged defect concerns 

premature, but usually post-warranty, onset of a natural 

condition raises concerns about the use of consumer fraud 

statutes to impermissibly extend a product’s warranty 

period. See Wilson, 668 F.3d at 1141–42 (acknowledging 

that unless liability for failure to disclose a defect is limited 

to unreasonable safety risks, “the failure of a product to last 

forever would become a ‘defect,’ a manufacturer would no 

longer be able to issue limited warranties, and product defect 

litigation would become as widespread as manufacturing 

itself” (internal quotation marks and alteration omitted)).

CONCLUSION

The district court correctly found that it lacked either 

general or specific jurisdiction over YMC. Additionally, 

Appellants failed to state a claim for state-law consumer 

fraud, as they failed to adequately plead that the alleged dry 

exhaust defect constituted an unreasonable safety hazard. 

We therefore AFFIRM the district court’s dismissal of YMC 

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WILLIAMS V. YAMAHA MOTOR CORP. 25

as a party, and AFFIRM its dismissal of Appellants’ claims 

against YMUS pursuant to Rule 12(b)(6).

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