Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_11-cv-02890/USCOURTS-caed-2_11-cv-02890-11/pdf.json

Parties Involved:
Margie Daniel
Plaintiff
Andrea Duarte
Plaintiff
Ford Motor Company
Defendant
Donna Glass
Plaintiff
Mary Hauser
Plaintiff
Robert McCabe
Plaintiff

Document Text:

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

MARGIE DANIEL, ROBERT MCCABE, 

MARY HAUSER, DONNA GLASS, and 

ANDREA DUARTE, individually 

and on behalf of a class of 

similarly situated 

individuals,

Plaintiffs,

v.

FORD MOTOR COMPANY, a 

Delaware corporation,

 Defendant.

CIV. NO. 2:11-02890 WBS EFB

MEMORANDUM AND ORDER RE: RENEWED

MOTION FOR SUMMARY JUDGMENT

----oo0oo----

Plaintiffs Margie Daniel, Robert McCabe, Mary Hauser, 

Donna Glass, and Andrea Duarte brought this action against 

defendant Ford Motor Company (“Ford”) on behalf of themselves and 

a class of similarly situated individuals in connection with an 

alleged rear suspension defect in the 2005-2011 Ford Focus. 

Defendant now moves for summary judgment pursuant to Federal Rule 

of Civil Procedure 56.

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I. Factual and Procedural Background

Plaintiffs are individuals who purchased new Ford Focus 

vehicles in California between 2005 and 2011. Plaintiffs allege 

that those vehicles have a rear suspension “alignment/geometry 

defect” that leads to premature tire wear, which in turn leads to 

safety hazards such as decreased control in handling, steering, 

and stability, as well as the threat of catastrophic tire 

failure. Plaintiffs bring claims for: (1) violation of the 

California Legal Remedies Act (“CLRA”), Cal. Civ. Code §§ 1750-

1784; (2) violation of California’s Unfair Competition Law 

(“UCL”), Cal. Bus. & Prof. Code §§ 17200-17210; (3) breach of 

implied warranty under the Song-Beverly Consumer Warranty Act, 

Cal. Civ. Code §§ 1790-1795.8; (4) breach of warranty under the 

Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-2312; and (5) 

breach of express warranty under California Commercial Code 

section 2313.

In an Order dated June 7, 2013, this court granted 

Ford’s motion for summary judgment on all claims and entered 

final judgment in its favor. (Docket No. 84.) Plaintiffs 

successfully appealed that Order and the Ninth Circuit reversed 

this court’s decision on all claims. Daniel v. Ford Motor Co., 

806 F.3d 1217 (9th Cir. 2015). Because this court’s prior order 

and the Ninth Circuit’s decision discuss the facts in this case 

in detail, the court will refrain from reciting them here. 

Having unsuccessfully defended judgment in its favor on 

appeal, Ford now moves for summary judgment on the grounds the 

Ninth Circuit declined to address on appeal. Specifically, the 

Ninth Circuit did not examine the “duty to disclose, actual 

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damages, statutorily-required notice, statute of limitations, 

equitable restitution, and sufficiency of the evidence of tire 

wear.” Id. at 1227. Plaintiffs Hauser, Glass, and Duarte do not 

oppose entry of judgment in favor of Ford on all of their claims, 

(Pls.’ Opp’n at 1:4-5), and the court will thus grant Ford’s 

motion for summary judgment on all claims by those plaintiffs. 

Plaintiff Daniel opposes Ford’s motion for summary judgment and 

this Order is thus limited to the grounds upon which Ford moves 

for summary judgment against Daniel. (Id. at 1:5-6.) 

II. Analysis

Summary judgment is proper “if the movant shows that 

there is no genuine dispute as to any material fact and the 

movant is entitled to judgment as a matter of law.” Fed. R. Civ. 

P. 56(a). A material fact is one that could affect the outcome 

of the suit, and a genuine issue is one that could permit a 

reasonable jury to enter a verdict in the non-moving party’s 

favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 

(1986). The party moving for summary judgment bears the initial 

burden of establishing the absence of a genuine issue of material 

fact and can satisfy this burden by presenting evidence that 

negates an essential element of the non-moving party’s case. 

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). 

Alternatively, the moving party can demonstrate that the nonmoving party cannot produce evidence to support an essential 

element upon which it will bear the burden of proof at trial. 

Id.

Once the moving party meets its initial burden, the 

burden shifts to the non-moving party to “designate ‘specific 

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facts showing that there is a genuine issue for trial.’” Id. at 

324 (quoting then-Fed. R. Civ. P. 56(e)). To carry this burden, 

the non-moving party must “do more than simply show that there is 

some metaphysical doubt as to the material facts.” Matsushita 

Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). 

“The mere existence of a scintilla of evidence . . . will be 

insufficient; there must be evidence on which the jury could 

reasonably find for the [non-moving party].” Anderson, 477 U.S. 

at 252.

In deciding a summary judgment motion, the court must 

view the evidence in the light most favorable to the non-moving 

party and draw all justifiable inferences in its favor. Id. at 

255. “Credibility determinations, the weighing of the evidence, 

and the drawing of legitimate inferences from the facts are jury 

functions, not those of a judge . . . ruling on a motion for 

summary judgment . . . .” Id. 

A. CLRA and UCL Claims

The CLRA prohibits certain “unfair methods of 

competition and unfair or deceptive acts or practices undertaken 

by any person in a transaction intended to result or which 

results in the sale or lease of goods or services.” Cal. Civ. 

Code § 1770(a). The CLRA’s list of proscribed practices include 

“[r]epresenting that goods or services have . . . characteristics 

. . . uses, benefits, or qualities which they do not have,” id. § 

1770(a)(5), and “[r]epresenting that goods or services are of a 

particular standard, quality, or grade,” id. § 1770(a)(7). The 

UCL proscribes as unfair competition “any unlawful, unfair or 

fraudulent business act or practice and unfair, deceptive, untrue 

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or misleading advertising.” Cal. Bus. & Prof. Code § 17200.

1. Duty to Disclose 

“[A] manufacturer cannot be found liable under the 

CLRA for failure to disclose a defect that manifests itself after 

expiration of the warranty period unless such omission (1) is 

‘contrary to a representation actually made by the defendant’ or 

(2) pertains to a ‘fact the defendant was obligated to 

disclose.’” Smith v. Ford Motor Co., 749 F. Supp. 2d 980, 987 

(N.D. Cal. 2010), aff’d, 462 F. App’x 660 (9th Cir. 2011) 

(quoting Daugherty v. Am. Honda Motor Co., 144 Cal. App. 4th 824, 

835-36 (2006)). Here, plaintiffs do not allege Ford made 

misrepresentations and contend only that Ford had a duty to 

disclose the alleged rear suspension defect and failed to do so. 

There is a duty to disclose under the CLRA and UCL in

four different circumstances: 

(1) when the defendant is the plaintiff’s fiduciary; 

(2) when the defendant has exclusive knowledge of 

material facts not known or reasonably accessible to 

the plaintiff; 

(3) when the defendant actively conceals a material 

fact from the plaintiff; and 

(4) when the defendant makes partial representations 

that are misleading because some other material fact 

has not been disclosed.

Collins v. eMachines, Inc., 202 Cal. App. 4th 249, 255 (3d Dist. 

2011). “[F]or the omission to be material, the failure must pose 

‘safety concerns.’” Smith, 749 F. Supp. 2d at 987 (quoting 

Oestreicher v. Alienware Corp., 322 F. App’x 489, 493 (9th Cir. 

2009)); accord Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1141 

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(9th Cir. 2012) (“California federal courts have generally 

interpreted Daugherty as holding that [a] manufacturer’s duty to 

consumers is limited to its warranty obligations absent either an 

affirmative misrepresentation or a safety issue.” (internal 

citations and quotations omitted)).1 

a. Materiality

Although the Ninth Circuit did not address whether Ford 

had a duty to disclose, when concluding plaintiffs had 

established a triable issue of fact as to reliance on their CLRA 

and UCL claims, it found that “[a] reasonable fact finder could 

infer that a vehicle that experiences premature and more frequent 

tire wear would pose an unreasonable safety risk.” Daniel, 806 

F.3d at 1226. The Ninth Circuit specifically found that 

plaintiffs had established a genuine issue of material fact on 

the two “sub-element[s]” of reliance: (1) that plaintiffs “would 

have been aware of a disclosure by Ford”; and (2) that plaintiffs 

“would have behaved differently if Ford had disclosed the alleged 

defect.” Id. Whether the alleged defect posed an unreasonable 

safety risk was relevant to the Ninth Circuit’s analysis because, 

as the court explained, “[t]hat one would have behaved 

differently can be presumed, or at least inferred, when the 

omission is material” and “[a]lleged defects that create 

‘unreasonable safety risks’ are considered material.” Id. at 

 

1 Citing Rutledge v. Hewlett-Packard Co., 238 Cal. App. 

4th 1164 (6th Dist. 2015), Daniel contends in a footnote that a

fraudulent omission claim may no longer require that the defect 

be related to a safety concern. Because the court finds that 

Daniel has established a triable issue of material fact with 

respect to whether the defect in this case involved a safety 

concern, it need not address this argument. 

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1225 (citations omitted). 

Although the Ninth Circuit made this finding in the 

context of reliance, Ford has not cited a single case 

articulating a distinction between materiality under the CLRA and 

UCL for purposes of a duty to disclose versus reliance. In fact, 

when defining “materiality” for purposes of reliance, the Ninth 

Circuit expressly relied on the definition of “materiality” from 

a case discussing the duty to disclose. See id. at 1126 (citing 

Wilson, 668 F.3d at 1141–43 as “holding in the duty-to-disclose 

context that an omission must pose safety concerns to be 

material”). The court would be at a loss to articulate how the 

Ninth Circuit’s finding that a reasonable jury could infer that 

the alleged defect posed an unreasonable safety risk and was thus 

material for purposes of reliance does not apply equally to the 

safety risk necessary to establish materiality in the context of 

a duty to disclose. 

Ford nonetheless argues that this finding was merely 

dicta and therefore not the law of the case. (See Def.’s Reply 

at 4:12-5:2 (citing cases).) While Ford argues that the parties 

did not dispute this “sub-element” of reliance and the Ninth 

Circuit “had no need to address this issue,” the Ninth Circuit 

obviously considered the issue necessary and did not believe it

was “undisputed” as Ford now claims.2

 

2 Ford points out that it never raised this aspect of 

reliance in its motion for summary judgment and plaintiff 

informed the Ninth Circuit that there was “‘no dispute that each 

Plaintiff satisfied the second [sub-element of reliance] by 

declaring that she would not have purchased a Ford Focus had she 

been informed of the suspension defect.’” (Def.’s Reply at 4:6-8 

(quoting Appellant’s Opening Br. at 10).) It is not surprising 

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Nonetheless, even assuming that this conclusion is not 

the law of the case, this court denies Ford’s invitation to 

reexamine the evidence that the Ninth Circuit considered. 

Although Ford argues the Ninth Circuit “had no reason to (and did 

not) consider in detail the evidence relevant to whether the 

alleged defect poses an unreasonable safety risk,” (id. at 5:3-

4), Ford does not deny that the very evidence it now relies on 

was before the Ninth Circuit. While the Ninth Circuit may not 

have cited the record or discussed the intricacies of the expert 

evidence in its decision, there is little question that it 

considered the evidence in reaching its decision: 

A reasonable fact finder could infer that a vehicle 

that experiences premature and more frequent tire wear 

would pose an unreasonable safety risk, such that it 

can be presumed that the nondisclosure of the safety 

risk impacted Plaintiffs’ purchasing decision. 

Plaintiffs have put forth sufficient evidence, when 

viewed in a light most favorable to them, that the 

Focus experienced premature and more frequent tire 

wear, and that Ford circulated special service 

messages to its authorized dealerships informing them 

that “some 2005–2011 Focus vehicles may exhibit 

premature front/rear tire wear and/or a vehicle drift 

condition when driving on wet or snow packed roads.” 

Plaintiffs’ experts opined that worn tires can pose a 

safety hazard in terms of road and weather conditions 

and potential blowouts. Even Ford acknowledges that 

“it can be dangerous to let the tires on any vehicle 

become excessively worn before replacing them.”

Daniel, 806 F.3d at 1226. 

Accordingly, because “[a] reasonable fact finder could 

 

that plaintiffs would argue that an issue on which they have the 

burden is “undisputed.” Ford does not indicate that it stated in 

its appellate brief that it did not dispute this sub-element. 

Without such an express admission on a necessary sub-element, the 

court can see why the Ninth Circuit felt it necessary to address 

it. 

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infer that a vehicle that experiences premature and more frequent 

tire wear would pose an unreasonable safety risk,” id. at 1226, 

Daniel has established a triable issue of fact with respect to 

whether the alleged defect was material for purposes of 

establishing Ford’s duty to disclose. 

b. Exclusive Knowledge 

A plaintiff can prevail on a CLRA or UCL claim based on 

a material omission if the defendant had exclusive knowledge of 

the defect. Ford does not dispute that it “was aware of a tire 

wear problem” at the time Daniel purchased her vehicle in January 

2011. It argues that it nonetheless did not have exclusive or 

superior knowledge of the “tire wear issues.” 

Generally, courts have not defined “exclusive” 

literally, but have found such claims cognizable if the defendant 

had “superior” knowledge of a defect that was not readily 

apparent and there is no or only a limited publicly available 

information about the defect. See, e.g., Falk v. Gen. Motors 

Corp., 496 F. Supp. 2d 1088, 1096-97 (N.D. Cal. 2007) (“[Because] 

GM ‘was in a superior position to know’ that its speedometers 

might fail, plaintiffs successfully state a CLRA claim for 

omission of a material fact which lay within GM's exclusive 

knowledge.”) (emphasis added); In re Toyota Motor Corp. 

Unintended Acceleration Mktg., Sales Practices, & Prods. Liab. 

Litig., 754 F. Supp. 2d 1145, 1174, 1192 (C.D. Cal. 2010) 

(“Plaintiffs establish a duty to disclose because they allege 

that Toyota has superior knowledge of the SUA defects. . . . 

Plaintiffs have sufficiently alleged that Toyota knew 

significantly more about the alleged SUA defect than the limited 

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information that was eventually shared with the public.”) 

(emphasis added). 

In Falk, plaintiffs brought CLRA and UCL claims against 

General Motors based on an alleged defect in its speedometers 

that caused the speedometers to stop working properly after 

45,000 miles or more. 496 F. Supp. 2d at 1092. The plaintiffs 

had alleged that consumers had raised “many complaints” about the 

speedometers on the Internet and that the plaintiffs could and 

even may have read those complaints. The court nonetheless found 

that General Motors had “exclusive” knowledge for purposes of the 

duty to disclose because plaintiffs alleged that General Motors

had “known a lot more about the defective speedometers, including 

information unavailable to the public.” Id. at 1097. The court 

further reasoned that “[m]any customers would not have performed 

an Internet search before beginning a car search” and they were 

not required to do so under the CLRA. Id. The court ultimately 

found that plaintiffs had sufficiently alleged exclusivity based 

on General Motors’ “superior position” to know that its 

speedometers might fail. Id. at 1096-97. 

Here, Ford argues it lacked exclusive knowledge because 

former plaintiff Robert McCabe testified that in September 2009, 

technicians at Les Schwab Tires told him that “Focuses were known 

for wearing out tires early.” (McCabe Dep. at 147:21-148:15

(Docket No. 47-8).) Ford also relies on allegations in 

plaintiffs’ motion for class certification that, by 2010, some 

Ford technicians were informing consumers that “rapid rear tire 

wear is a normal characteristic” of the Focus and there was 

“widespread acknowledgement among Ford dealers that the C170 

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Focus was indeed a tire eater.” (Pls.’ Mot. for Class Cert. at

5:8, 6:1-2 (Docket No. 33).)3

Compared to Falk, in which complaints were made 

publicly about the defect, comments by technicians about the 

rapid tire wear on the Focus does not even suggest that the 

technicians were aware that a rear suspension defect was 

allegedly causing the tire wear. Moreover, the court in Falk

found that complaints on the Internet about the defective 

component did not defeat plaintiffs’ claim that the manufacturer

had exclusive knowledge. Those complaints were readily 

accessible to any prospective purchaser who performed an online 

search. Here, a prospective purchaser might have learned about 

the tire problem only if he happened to talk to a technician or 

Ford dealer who happened to mention it. If the CLRA and UCL do 

not require prospective customers to search the internet for 

complaints, they surely do not require them to contact numerous 

technicians to find out if any of them happen to know of any tire 

issues or, more importantly, an undisclosed rear suspension 

defect. 

Similarly, Ford claims it did not have exclusive 

knowledge of the rear suspension defect because, according to the 

allegations in plaintiffs’ Complaint, consumers had filed 

complaints about the “defective condition” of the Focus with the 

National Highway Traffic Safety Association (“NHTSA”) and those 

 

3 Allegations in the opposing party’s motion for class 

certification is hardly the type of “evidence” the court would 

expect to see in support of a motion for summary judgment. 

Nonetheless, plaintiffs cite excerpts from various reports in 

support of these statements and the court could consider that 

evidence at summary judgment. 

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consumer complaints were available on the internet. (See Compl.

¶ 37 (Docket No. 1).) Even assuming the court could consider 

such allegations from plaintiffs’ Complaint at summary judgment, 

the ability of a prospective purchaser to find complaints made to 

the NHTSA on the Internet does not preclude a finding of 

exclusivity. See In re Toyota Motor Corp. Unintended 

Acceleration Mktg., Sales Practices, & Prods. Liab. Litig., 754 

F. Supp. 2d at 1192 (“While prospective customers could have been 

tipped off to the possibility of SUA by researching past 

complaints filed with NHTSA, many customers would not have 

performed such a search, nor would they be expected to.”). 

Ford also relies heavily on Gray v. Toyota Motor Sales, 

U.S.A., Civ. No. 08-1690 PSG JCX, 2012 WL 313703 (C.D. Cal. Jan. 

23, 2012), aff’d, 554 F. App’x 608 (9th Cir. 2014). In Gray, the 

plaintiffs brought CLRA, UCL, and fraudulent concealment claims 

based on the failure of the Toyota Prius Hybrid to meet the EPA’s 

estimated 55 miles per gallon (“MPG”) under real world driving 

conditions. The court dismissed plaintiffs’ claims premised on a 

fraudulent omission theory because the claims did not involve a 

warranty or safety-related defect. Id. at *3-5. On plaintiffs’ 

fraudulent concealment claim, which requires the same duty to 

disclose as the CLRA and UCL, the court assumed that a claim for 

fraudulent concealment was cognizable in the absence of a safety 

defect and, on that assumption, assessed whether the plaintiffs 

had sufficiently alleged that Toyota had exclusive knowledge. 

Id. at *8. 

The Gray court ultimately found that the plaintiffs 

could not show Toyota possessed exclusive knowledge of the 

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underperformance of the Prius Hybrid. Id. at *8-9. It did so, 

however, only after finding that the “newsworthiness” about the 

Prius Hybrid’s underperformance had received “mainstream-media 

attention” and was “public information.” Id. at *8. Two years 

prior to the plaintiffs having purchased their vehicles, Consumer 

Reports had “publically revealed” that the discrepancy between 

the EPA estimates and real-world figures was “much, much bigger” 

than for other vehicles and USA Today had reported that a realworld driving test revealed an MPG of only 38. Id. Unlike in 

Gray, Ford contends only that some technicians and dealers were 

aware of the Focus’s poor tire wear. Ford does not suggest or 

provide any evidence suggesting that the Focus’s rear suspension 

defect was reported in mainstream media and had become public 

information prior to Daniel having purchased her vehicle. 

Ignoring the Gray court’s finding that the 

underperformance of the Prius Hybrid was “public information” two 

years prior to the plaintiffs’ purchases of their vehicles, Ford 

attributes undue weight to the Gray court’s statement that “[t]he 

Prius’s real-world MPG can be readily and immediately observed by 

a layman.” Id. at *9. The Gray court emphasized the obviousness 

of the Prius Hybrid’s real-world fuel performance not as the sole 

ground upon which it found that the plaintiffs could not allege 

exclusivity, but as a means to distinguish the case from Falk. 

The Gray court explained that the speedometers at issue in Falk

“function[ed] as anticipated for 45,000–plus miles, before 

breaking unexpectedly after a consumer has exceeded their 

warranty coverage,” whereas the Prius Hybrid’s underperformance 

was immediately apparent upon first driving the Prius. Id.

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Here, any rear suspension defect and consequent tire 

wear would not have been immediately apparent upon driving a 

Focus, but would have required thousands of miles of use before a 

problem might be suspected. Even then, when tire wear might have 

been noticeable, a reasonable consumer would be unlikely to 

realize that the premature tire wear was the result of a rear 

suspension defect. Moreover, even if Gray was not so readily 

distinguishable, the language Ford relies on was not necessary to

the decision and, while the Ninth Circuit affirmed the decision, 

it neither discussed nor approved of the district court’s 

analysis of exclusivity. See Gray v. Toyota Motor Sales, U.S.A., 

Inc., 554 F. App’x 608, 609 (9th Cir. 2014) (affirming the 

district court because, “under the statutes pled, California law 

does not recognize a cause of action for publicizing EPA fuel 

economy estimates and omitting further explanation”).

Similar to Gray, the district court in Herron v. Best 

Buy Co. also found that the plaintiff could not allege exclusive 

knowledge of the test conditions under which a laptop battery was 

tested. 924 F. Supp. 2d 1161, 1175 (E.D. Cal. 2013). In his 

complaint, however, the plaintiff had alleged that the defendant 

had disclosed the testing that was used and, nine months before

the plaintiff purchased his laptop, “Newsweek [had] published an 

article publicly criticizing the [] test [defendant used] for the 

same reasons raised [] by Plaintiff.” Id. The Herron court also 

found that because the defect was underperformance of the 

estimated battery life under real-world use, the “Plaintiff could 

have readily recognized any deficiencies in his Laptop’s battery 

life.” Id. Not only was the testing method used in Herron

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disclosed on the defendant’s website, Herron was similar to Gray

in that it involved a readily apparent defect that had been 

reported in mainstream media prior to the plaintiff’s purchase. 

Daniel has therefore established a triable issue of 

fact with respect to Ford’s duty to disclose a material defect of 

which it had exclusive knowledge for purposes of her CLRA and UCL 

claims.4 

2. Damages 

a. CLRA Damages 

Relying on the measure of damages provided for in 

California Civil Code section 3343 when a person is “defrauded in 

the purchase, sale or exchange of property,” Ford argues that 

Daniel’s CLRA claim fails because she cannot prove loss as 

calculated under section 3343. The CLRA provides, however, that 

“[a]ny 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” to recover 

“(1) Actual damages, . . . [;] (2) An order enjoining the 

methods, acts, or practices[;] (3) Restitution of property[;] (4) 

Punitive damages[; or] (5) [a]ny other relief that the court 

deems proper.” Cal. Civ. Code § 1780(a) (emphasis added). 

As California courts have repeatedly explained, “[t]he 

damage that a plaintiff in a CLRA action must show under Civil 

Code section 1780, subdivision (a) is any damage, which is not 

 

4 Because the court concludes that Daniel’s CLRA and UCL 

claims withstand summary judgment on the theory that Ford failed 

to disclose a material fact of which it had exclusive knowledge, 

the court need not address Daniel’s alternative theory that Ford 

actively concealed a material fact. 

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synonymous with actual damages and may encompass harms other than 

pecuniary damages.” Id. (internal quotation marks omitted); 

accord Meyer v. Sprint Spectrum L.P., 45 Cal. 4th 634, 640 

(2009). The showing of damage or actual injury under the CLRA is

therefore not “governed by Civil Code section 3343, i.e., the 

measure of actual damages for persons defrauded in the purchase 

of property.” In re Steroid Hormone Prod. Cases, 181 Cal. App. 

4th 145, 155 (2d Dist. 2010).5 Thus, even assuming Daniel could 

not prove damages under section 3343--which Daniel strongly 

disputes--she has submitted sufficient evidence to create a 

triable issue of fact as to whether she incurred “any damage”

necessary to sustain a CLRA claim. (See, e.g., Webb Expert 

Report at 3 (Docket No. 33-6) (estimating that the alternative 

design replacement retrofit costs to address the alleged defect 

 

5 In Paz v. Playtex Products, Inc., the court rejected 

the plaintiffs’ use of gross sales revenue to calculate potential 

damages for purposes of the statutory minimum under the Class 

Action Fairness Act of 2005. Civ. No. 07-2133 JM BLM, 2008 WL 

111046, at *3 (S.D. Cal. Jan. 10, 2008). Although the Paz court 

relied on section 3343(a) as the means to calculate potential 

damages, it did not hold that damages under the CLRA are limited 

to those provided in section 3343(a) or analyze that issue in any 

detail. See id.

Moreover, while section 3343 provides the “exclusive 

measure of damages for fraud cases,” Cent. Mut. Ins. Co. v. 

Schmidt, 152 Cal. App. 2d 671, 676 (1st Dist. 1957) (quoting 

Bagdasarian v. Gragnon, 31 Cal. 2d 744, 762 (1948)), Ford has not 

cited a single decision from the California Supreme Court or 

California appellate courts holding that section 3343 also 

provides the exclusive measure of damages for CLRA claims. The 

Ninth Circuit has also noted that even though CLRA and UCL claims 

may “said to be ‘grounded in fraud’ or to ‘sound in fraud, . . . 

[f]raud is not an essential element of a claim under these 

statutes.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103, 

1105 (9th Cir. 2003). The court will therefore not interpret 

“any damage” in the CLRA as measurable only under the calculation 

provided for fraud claims in section 3343. 

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range from $845 to $1167).) 

b. Restitution Under the UCL

Under the UCL, “restitution is the only monetary remedy 

expressly authorized” and “[a] court cannot, under the equitable 

powers of section 17203, award whatever form of monetary relief 

it believes might deter unfair practices.” Korea Supply Co. v. 

Lockheed Martin Corp., 29 Cal. 4th 1134, 1146, 1148 (2003) 

(internal quotation marks and citation omitted). “[A]n order for 

restitution is one ‘compelling a UCL defendant to return money 

obtained through an unfair business practice to those persons in 

interest from whom the property was taken, that is, to persons 

who had an ownership interest in the property or those claiming 

through that person.’” Id. at 1149 (quoting Kraus v. Trinity 

Mgmt. Servs., Inc., 23 Cal. 4th 116, 126-27 (2000)). “The object 

of restitution is to restore the status quo by returning to the 

plaintiff funds in which he or she has an ownership interest.” 

Id. 

An award of restitution under the UCL “must be of a 

measurable amount to restore to the plaintiff what has been 

acquired by violations of the statutes, and that measurable 

amount must be supported by evidence.” Colgan v. Leatherman Tool 

Grp., Inc., 135 Cal. App. 4th 663, 698 (2d Dist. 2006). In 

calculating restitution, “California law requires only that some 

reasonable basis of computation of damages be used, and the 

damages may be computed even if the result reached is an 

approximation.” Pulaski & Middleman, LLC v. Google, Inc., 802 

F.3d 979, 989 (9th Cir. 2015) (internal quotation marks and 

citation omitted). “[T]he fact that the amount of damage may not 

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be susceptible of exact proof or may be uncertain, contingent or 

difficult of ascertainment does not bar recovery.” Id. (internal 

quotation marks and citation omitted). 

With a UCL claim based on a fraudulent omission, the 

Ninth Circuit has recently explained that “restitution is based 

on what a purchaser would have paid at the time of purchase had 

the purchaser received all the information.” Id.; see also

Chowning v. Kohl’s Dep’t Stores, Inc., Civ. No. 15-08673 RGK SPX, 

2016 WL 1072129, at *10 (C.D. Cal. Mar. 15, 2016) (“To determine 

Plaintiff’s loss for purposes of restitution, the focus should be 

on what Plaintiff actually received given the price she paid, not 

on the bargain Plaintiff thought she was receiving.”). 

Here, Daniel estimates that the alternative design 

replacement retrofit cost to address the alleged defect ranges

from $845 to $1167. (Webb Expert Report at 3.) While this might 

not be the most probative evidence of what a consumer would have 

paid for a Focus if Ford had disclosed the alleged defect, a 

reasonable jury could conclude that a consumer would demand that 

the purchase price of a vehicle with a defect be reduced by the 

cost of remedying that defect. Moreover, while Ford’s expert 

opines that the defect did not affect the depreciation of the 

Focus, (Strombom Expert Report at 16-17 (Docket No. 48-3)), 

Daniel’s expert criticizes this opinion, (Leamer Rebuttal Expert 

Report at 30 (Docket No. 58-2)), and depreciation value is not 

determinative of the purchase value. The court cannot weigh this 

conflicting and circumstantial evidence at summary judgment and 

thus the jury must ultimately determine the value of the Focus at 

the time of purchase. 

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Ford also contends restitution is not possible because 

Daniel paid the authorized Ford dealership for her Focus, not 

Ford. It is undisputed, however, that Ford sells and leases its 

vehicles to authorized dealerships and that Daniel purchased her 

Focus from an authorized Ford dealership. Taking all inferences 

in favor of Daniel, she has made the minimum showing necessary to 

establish a triable issue that funds she paid to the Ford 

dealership are traceable to Ford. Cf. Colgan, 135 Cal. App. 4th 

at 699 (“[W]hen in equity, the plaintiff can seek [restitution] 

‘in the form of a constructive trust or an equitable lien, where 

money or property identified as belonging in good conscience to 

the plaintiff could clearly be traced to particular funds or 

property in the defendant’s possession.’” (quoting Great–W. Life 

& Annuity Ins. v. Knudson, 534 U.S. 204, 213 (2002))). 

While Daniel’s theory of restitution may ultimately 

reveal itself to be a square peg unable to fit in the round hole, 

the court will not foreclose the claim at this stage and will 

deny Ford’s motion for summary judgment with respect to 

plaintiff’s request for restitution under the UCL. 

3. Statutory Notice under the CLRA

The CLRA requires that a consumer notify the defendant 

in writing of the consumer’s alleged CLRA claims thirty days 

prior to bringing a claim. Cal. Civ. Code § 1782. The notice 

“requirement exists in order to allow a defendant to avoid 

liability for damages if the defendant corrects the alleged 

wrongs within 30 days after notice, or indicates within that 30–

day period that it will correct those wrongs within a reasonable 

time.” Morgan v. AT&T Wireless Servs., Inc., 177 Cal. App. 4th 

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1235, 1261 (2d Dist. 2009). When a plaintiff fails to comply 

with CLRA’s notice requirement, courts generally dismiss the 

plaintiff’s complaint without prejudice to plaintiff refiling 

thirty days after giving notice. See, e.g., Reed v. Dynamic Pet 

Prods., Civ. No. 15-0987 WQH DHB, 2015 WL 4742202, at *8 (S.D. 

Cal. July 30, 2015); Morgan, 177 Cal. App. 4th at 1261; Doe 1 v. 

AOL LLC, 719 F. Supp. 2d 1102, 1110-11 (N.D. Cal. 2010).

Although Daniel alleged that she had provided the 

requisite notice under section 1782 in her Complaint, (see Compl. 

¶ 98), the parties do not dispute that this allegation was false 

when the Complaint was filed on November 2, 2011. It is also 

undisputed that Daniel provided the requisite notice on December 

10, 2012. Although Ford does not contend it suffered any 

prejudice as a result of Daniel’s late notice, it nonetheless 

argues that her Complaint is subject to dismissal for failure to 

have satisfied the notice requirement prior to filing. While 

Ford recognizes the dismissal would ordinarily be without 

prejudice, it nonetheless suggests that Daniel cannot show the 

requisite good cause to justify amending her Complaint four-anda-half years after filing it. 

Ford’s suggestion that Daniel’s CLRA claims are 

defeated because of such a technicality hardly passes the 

straight face test. While Daniel failed to provide the requisite 

notice prior to filing the action, it is undisputed that Ford was 

aware of this failure by no later than January 19, 2012. (See

Answer ¶ 98 (denying the allegation that Daniel provided 

notice).) Despite this knowledge, Ford did not raise the lack of 

pre-commencement notice until March 15, 2013 when it filed its 

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first motion for summary judgment. Because the court granted 

Ford’s motion for summary judgment on other grounds, it did not 

address the notice issue at that time. Ford should not be 

rewarded for sitting on its right to seek dismissal for over a 

year and then utilizing its own delay to claim that Daniel cannot 

show good cause to amend her Complaint. A defendant can waive 

notice under the CLRA, Outboard Marine Corp. v. Superior Court,

52 Cal. App. 3d 30, 41 (3d Dist. 1975), and, under the 

circumstances of this case, the court finds that Ford waived its 

right to pre-commencement notice. 

Even if Ford did not waive its right to precommencement notice, dismissal of this Complaint would achieve 

nothing. Any dismissal would be without prejudice and the court 

would find good cause for plaintiff to file an amended complaint 

in light of Ford’s delay in seeking dismissal and the even 

lengthier delay resulting from the appeal. Because Daniel has 

already provided notice and the Complaint alleges notice was

provided, an amended complaint that is identical to the operative 

Complaint would be legally sufficient and Daniel could thus 

refile the operative Complaint as her First Amended Complaint. 

The court will not require such a meaningless and empty gesture. 

Accordingly, the court will deny Ford’s motion for summary 

judgment with respect to the requisite CLRA notice. 

B. Express Warranty Claim 

Lastly, and with a rather cursory analysis, Ford seeks 

summary judgment on Daniel’s express warranty claim because the 

warranty excludes coverage for “worn out tires.” Ford made this 

same argument to the Ninth Circuit, which the Ninth Circuit 

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apparently determined did not even merit discussion. (See Grant 

Decl. Ex. HH (Appellee’s Br. on Appeal) (“On appeal, as below, 

Plaintiffs simply ignore that portion of the warranty that 

expressly provides that it ‘does not cover . . . worn out 

tires.’”). Although Ford suggests the Ninth Circuit left this 

issue for resolution on remand like the numerous other issues it 

did not address on appeal, the Ninth Circuit held that the 

express warranty covered the design defect at issue in this case, 

Daniel, 806 F.3d at 1225, and did not include Ford’s “worn out 

tire” argument in the express list of issues it declined to 

address, see id. at 1227 (“Because the district court did not 

address duty to disclose, actual damages, statutorily-required 

notice, statute of limitations, equitable restitution, and 

sufficiency of the evidence of tire wear, we decline to do so on 

appeal.”). Accordingly, because the Ninth Circuit has held that 

the express warranty extends to the rear suspension design defect 

alleged in this case, the court will deny Ford’s motion for 

summary judgment on Daniel’s breach of express warranty claim.

IT IS THEREFORE ORDERED that defendant’s motion for 

summary judgment be, and the same hereby is, DENIED as to 

plaintiff Margie Daniel and GRANTED as to all remaining 

plaintiffs. Plaintiff shall file a renewed motion for class 

certification within thirty days of the date this Order is 

signed. 

Dated: May 17, 2016

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