Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_14-cv-03612/USCOURTS-cand-4_14-cv-03612-4/pdf.json

Parties Involved:
Greg Battaglia
Plaintiff
Hyundai Motor America
Defendant
Hyundai Motor Company
Defendant
Oren Jaffe
Plaintiff
Ann Mancuso
Plaintiff
Julia Reniger
Plaintiff
Lucia Saitta
Plaintiff

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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 

JULIA RENIGER, GREG BATTAGLIA, 

OREN JAFFE, LUCIA SAITTA, and ANN 

MANCUSO, individually and on 

behalf of all others similarly 

situated, 

 Plaintiffs, 

 v. 

HYUNDAI MOTOR AMERICA, a 

California corporation, and 

HYUNDAI MOTOR COMPANY, a foreign 

corporation, 

 Defendants. 

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Case No. 14-3612 SC 

ORDER GRANTING IN PART AND 

DENYING IN PART DEFENDANTS' 

MOTIONS TO DISMISS AND 

DENYING MOTION TO STRIKE 

I. INTRODUCTION

 Now before the Court are two motions in this putative class 

action alleging consumer protection, fraud, and warranty claims 

related to alleged low-speed stalling of Hyundai Santa Fe vehicles. 

See ECF No. 21 ("SAC"). First, Defendants Hyundai Motor America 

and Hyundai Motor Company ("HMC") (collectively, "Hyundai") have 

moved to strike Plaintiffs' class action allegations and 

allegations relating to the Kia Motor Group on the grounds that 

these allegations are either contrary to California and Ninth 

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Circuit law or otherwise redundant, impertinent, and immaterial 

under Federal Rule of Civil Procedure 12(f). ECF No. 31 ("Mot. to 

Strike"). Second, Defendants move to dismiss several of the named 

Plaintiffs for lack of standing and to dismiss the balance of 

Plaintiffs' allegations for failure to state a claim. ECF No. 33 

("MTD"). 

These motions are fully briefed,1 and appropriate for 

resolution without oral argument under Civil Local Rule 7-1(b). 

For the reasons set forth below, the motion to dismiss is GRANTED 

IN PART and DENIED IN PART and the motion to strike is DENIED. 

II. BACKGROUND

 The Hyundai Santa Fe is a midsized sport utility vehicle 

manufactured by Hyundai since 2000. Plaintiffs allege that model 

year 2010-2012 Santa Fes have a safety defect that causes the 

vehicle to totally lose power (or "stall"). When an affected Santa 

Fe stalls, power steering and brakes are lost as well, creating a 

potentially dangerous situation in which it is difficult to control 

the vehicle. Plaintiffs contend that Defendants had knowledge of 

this alleged defect through a variety of sources, including 

consumer complaints and similar problems experienced by Kia Motors, 

another automobile manufacturer, with its Kia Sorento, a midsized 

sport utility vehicle much like the Santa Fe. 

 Plaintiffs' allegations of knowledge and concealment of this 

alleged defect stem from a series of Technical Service Bulletins 

("TSBs") issued by Hyundai since 2010 "describing procedures that 

 

1

 ECF Nos. 35 ("MTD Opp'n"), 36 ("Mot. to Strike Opp'n"), 39 ("MTD 

Reply"), 40 ("Mot. to Strike Reply"). 

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have been implemented by dealers to remedy the Stalling Defect 

without success." SAC ¶¶ 7. These TSBs describe procedures for 

cleaning the "Electronic Throttle Control . . . throttle body" to 

address idling, power, and throttle issues, and updates to the 

"Engine Control Module" to improve shifting at low throttle, 

coasting to a stop, and a "'limp home' condition caused by 

performance/power issues." Id. at ¶¶ 8-10. 

In 2014, Hyundai announced a "Voluntary Service Campaign," 

which provides a free software update to address the risk that 

"during a specific set of operating conditions," model year 2010-

2012 vehicles can lose power or stall "when coming to a stop during 

braking at low speed . . . ." Id. at ¶ 13. Hyundai notified 

regulators of the campaign, and states it sent a letter to all 

owners and lessees of Santa Fes in the affected model years 

notifying them of the issue and offering a free software update at 

dealerships to address the stalling problem. MTD at 3 (citing SAC 

Ex. H). However, Plaintiffs allege this is only the illusion of a 

fix and has, in certain cases, not been made available to the 

owners or lessees of all affected vehicles (including two of the 

named plaintiffs). See SAC at ¶¶ 12-14, 18. 

 The named Plaintiffs in this putative class action are five 

current or former owners of new or used Santa Fes from model years 

2010-2012. They seek to represent a nationwide class of owners and 

lessees of 2010-2012 Santa Fes and three subclasses made up of (1) 

New York owners and lessees, (2) California owners and lessees, and 

(3) California owners and lessees who are "consumers" within the 

meaning of California Civil Code Section 1761(d). Plaintiffs 

allege nine causes of action, including violations of California 

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and New York consumer, false advertising, and implied warranty 

laws; breach of the Magnuson-Moss Warranty Act ("Mag.-Moss"), 15 

U.S.C. § 2301; and common law fraud. SAC ¶¶ 107-195. 

While not all of the named plaintiffs allege out-of-pocket 

costs associated with the stalling defect, all allege that they 

owned Santa Fes from model years 2010-2012 and experienced 

unforeseen and sometimes dangerous stalling. One, Reniger, sold 

her Santa Fe prior to the service campaign after her vehicle 

stalled on several occasions and her Hyundai dealer was unable to 

remedy the stalling even after paying for service she understood 

would help with the stalling. Id. at ¶¶ 40-44. Two other named 

plaintiffs, Saitta and Mancuso, brought their vehicles in for 

Hyundai's service campaign, but continued to experience stalling 

issues thereafter. Id. at ¶ 19. Three, Mancuso, Battaglia, and 

Jaffe, did not receive notice of the service campaign, and own 

Santa Fes that are listed as ineligible for the service campaign on 

Hyundai's service campaign website, 

https://www.hyundaiusa.com/campaign929/. Id. at ¶¶ 51, 58. Of 

these, only Mancuso brought her vehicle in for the service 

campaign, and Battaglia and Jaffe's vehicles remain unfixed and are 

allegedly still afflicted. Id. 

Now, arguing these allegations are insufficient to confer 

Article III standing or state a claim upon which relief can be 

granted, Hyundai moves to dismiss. Hyundai also seeks to strike 

Plaintiffs' class action allegations, arguing that these (and 

Plaintiffs' allegations about the Kia Sorento and Hyundai's 

relationship with Kia) are "an insufficient defense or . . . 

redundant, immaterial, impertinent, or scandalous matter" within 

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the meaning of Federal Rule of Civil Procedure 12(f). Plaintiffs 

oppose. 

The Court ordered supplemental briefing on both (1) whether 

standing of a single plaintiff satisfies the minimum needs of 

Article III standing and (2) whether a transaction is required vice 

allegations of a safety concern. Order of the Court dated June 12, 

2015, ECF No. 45 ("Supp. Briefing Order"). Parties have provided 

all responsive briefs. ECF Nos. 48 ("Supp. Mot."), 49 ("Supp. 

Opp'n"), 50 ("Supp. Reply"). 

III. LEGAL STANDARDS 

 A. Federal Rule of Civil Procedure 12(b)(1) 

A motion to dismiss under Federal Rule of Civil Procedure 

12(b)(1) challenges the Court's subject-matter jurisdiction. 

Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 

(9th Cir. 2010). Because Article III standing relates to the 

Court's subject-matter jurisdiction, it is properly raised on a 

Rule 12(b)(1) motion, and the party asserting jurisdiction "bears 

the burden of proving its existence." Id. at 1121-22.

 To satisfy Article III's standing requirements, Plaintiffs 

must demonstrate that "(1)[they] ha[ve] suffered an 'injury in 

fact' that is (a) concrete and particularized and (b) actual or 

imminent, not conjectural or hypothetical; (2) the injury is fairly 

traceable to the challenged action of the defendant; and (3) it is 

likely, as opposed to merely speculative, that the injury will be 

redressed by a favorable decision." Friends of the Earth, Inc. v. 

Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180–81 (2000) (citing 

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–561 (1992)). 

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 B. Federal Rule of Civil Procedure 12(b)(6) 

A motion to dismiss under Federal Rule of Civil Procedure 

12(b)(6) "tests the legal sufficiency of a claim." Navarro v. 

Block, 250 F.3d 729, 732 (9th Cir. 2001). "Dismissal can be based 

on the lack of a cognizable legal theory or the absence of 

sufficient facts alleged under a cognizable legal theory." 

Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 

1988). "When there are well-pleaded factual allegations, a court 

should assume their veracity and then determine whether they 

plausibly give rise to an entitlement to relief." Ashcroft v. 

Iqbal, 556 U.S. 662, 664 (2009). However, "the tenet that a court 

must accept as true all of the allegations contained in a complaint 

is inapplicable to legal conclusions. Threadbare recitals of the 

elements of a cause of action, supported by mere conclusory 

statements, do not suffice." Id. at 678 (citing Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 555 (2007)). The allegations made in a 

complaint must be "sufficient allegations of underlying facts to 

give fair notice and to enable the opposing party to defend itself 

effectively" and "must plausibly suggest an entitlement to relief" 

such that "it is not unfair to require the opposing party to be 

subjected to the expense of discovery and continued litigation." 

Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). 

C. Federal Rule of Civil Procedure 9(b) 

Claims sounding in fraud are subject to the heightened 

pleading requirements of Federal Rule of Civil Procedure 9(b), 

which requires that a plaintiff alleging fraud "must state with 

particularity the circumstances constituting fraud." See Kearns v. 

Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009). "To satisfy 

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Rule 9(b), a pleading must identify the who, what, when, where, and 

how of the misconduct charged, as well as what is false or 

misleading about [the purportedly fraudulent] statement, and why it 

is false." Cafasso ex rel. United States v. Gen. Dynamics C4 Sys., 

Inc., 637 F.3d 1047, 1055 (9th Cir. 2011) (internal quotation marks 

and citations omitted) (alteration in original). 

D. Federal Rule of Civil Procedure 12(f) 

 Rule 12(f) of the Federal Rules of Civil Procedure states that 

a district court "may strike from a pleading an insufficient 

defense or any redundant, immaterial, impertinent, or scandalous 

matter." "The function of a 12(f) motion to strike is to avoid the 

expenditure of time and money that must arise from litigating 

spurious issues by dispensing with those issues prior to 

trial . . . ." Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th 

Cir. 1993) (quotation marks, citation, and alteration omitted), 

rev'd on other grounds sub nom., Fogerty v. Fantasy, Inc., 510 U.S. 

517 (1994). 

IV. DISCUSSION 

 Article III standing is a threshold issue. See Bates v. 

United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007). As a 

result, the Court addresses Defendants' Rule 12(b)(1) motion first, 

before turning to the balance of the motion to dismiss and, 

finally, the motion to strike. 

A. Rule 12(b)(1) Motion

 Hyundai contends that four of the five named plaintiffs -- 

Reniger, Battaglia, Saitta, and Mancuso -- all lack Article III 

/// 

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standing. Hyundai does not challenge the standing of the fifth 

named plaintiff, Jaffe. 

 Article III standing has three elements. First, Plaintiffs 

must have suffered an "injury in fact," which is an actual or 

imminent, concrete, and particularized "invasion of a legally 

protected interest . . . ." Lujan, 504 U.S. at 560. Second, that 

injury must be "fairly traceable" to the Defendants' conduct. Id. 

(ellipses and alterations omitted). Finally, Plaintiffs must show 

that a favorable decision will likely redress their injuries. Id. 

at 561. Although the burden of showing standing is on the 

Plaintiff, "general factual allegations of injury resulting from 

the defendant's conduct may suffice" at the pleading stage. Id. 

"[I]n an era of frequent litigation[ and] class actions, . . . 

courts must be more careful to insist on the formal rules of 

standing, not less so." Ariz. Christian Sch. Tuition Org. v Winn, 

131 S. Ct. 1436, 1449 (2011). 

 "In a class action, standing is satisfied if at least one 

named plaintiff meets the requirements." Lowden v. T-Mobile USA, 

Inc., 512 F.3d 1213, 1215 n.1 (9th Cir. 2008); see also Ellis v. 

Costco Wholesale Corp., 657 F.3d 970, 979 (9th Cir. 2011) (noting 

that "[b]ecause only one named Plaintiff must meet the standing 

requirements, the district court did not err in finding that 

Plaintiffs have standing.").2 Here, there can be no serious doubt 

that (at least) Jaffe has standing -- indeed, Defendants did not 

even challenge Jaffe's Article III standing in their original MTD. 

Plaintiffs allege that Jaffe owned a used 2011 Santa Fe, 

 

2

 For a more in depth set of citations, see Newberg on Class 

Actions § 2:3 (5th Ed.), 1, n. 10-11. 

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experienced multiple stalls, and paid $412.54 out-of-pocket in 

several attempts to remedy the stalling. SAC ¶¶ 33, 54-59. 

Furthermore, Plaintiffs allege that despite Jaffe's repeated 

stalling issues, Jaffe's vehicle is listed as ineligible for 

Hyundai's service campaign, and his vehicle continues to suffer 

from the alleged stalling defect. Id. at ¶ 58. 

Supplemental briefing as ordered by the Court does not alter 

this analysis. See Supp. Briefing Order. Hyundai cites numerous 

authorities that confirm the need for Article III standing, that 

there must be a named plaintiff with such standing, and that if 

none of the named plaintiffs have standing then the case should be 

dismissed for lack of standing. Supp. Mot. at 1-6. However, the 

cases Hyundai cites do not contemplate where there are both a named 

plaintiff with standing to proceed on each and every claim against 

each and every defendant and still other named plaintiffs who might 

lack standing as to some or all of the claims. 

While Hyundai stresses context for the Ninth Circuit cases 

underlying those cited by the Court's Supp. Briefing Order, Hyundai 

fails to appreciate the language and context of the cases to which 

Hyundai itself cites. For example, Defendants partially cite In re 

Carrier IQ, Inc., Consumer Privacy Litig., 2015 U.S. Dist. LEXIS 

7123, at *51 (N.D. Cal. Jan. 21, 2015). The full quote is: 

[Another case] stands for the unremarkable proposition 

that for a class action to proceed between the named 

parties, each named plaintiff must have standing to 

sue at least one named defendant; to hold each 

defendant in the case, there must be at least one 

named plaintiff with standing to sue said defendant. 

Id. (emphasis added, reflecting the limited portion quoted by 

Hyundai). While out of context the portion Hyundai quoted may 

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appear to support Hyundai's argument, the quote in context clearly 

indicates that Judge Chen is discussing what is necessary to hold a 

defendant in the case -- namely at least one named plaintiff who 

has a claim against the named defendant. Other citations by 

Hyundai similarly or even more glaringly misconstrue the context of 

the quoted source. See Supp. Mot. at 5 n.4. 

Here, Lowden, Ellis, and the cases collected by Plaintiffs 

persuade the Court that it is proper to summarily find that Article 

III standing exists where a single named plaintiff is found to have 

standing. The Court thus holds that where there are multiple 

defendants and multiple claims, there must exist at least one named 

plaintiff with Article III standing as to each defendant and each 

claim -- but a single named plaintiff who meets these criteria can 

suffice, even though it is not necessary that Article III standing 

be established via a single vice multiple named plaintiff(s).3

 

Because the Court need "consider only whether at least one 

named plaintiff satisfies the standing requirements" of Article III 

and Jaffe satisfies said standing requirements, Hyundai's Rule 

12(b)(1) motion is DENIED. See Bates, 511 F.3d at 985. 

B. Rule 12(b)(6) Motion 

 Defendants make eight arguments as to why Plaintiffs' claims 

fail as pleaded: (1) that HMC should be dismissed from the case for 

lack of any transaction; (2) that the Unfair Competition Law (Cal 

Bus. & Prof. C. § 17200 et seq.) ("UCL"), Consumer Legal Remedies 

Act ("CLRA") (Cal. Civ. Code § 1750 et seq.), and Fraud Claims fail 

for assorted reasons; (3) that False Advertising Law (Cal. Bus. & 

 

3

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this finding is largely distinct from such an inquiry, which the 

Court expressly does not reach or consider at this time. 

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Prof. C. § 17500 et seq.) ("FAL") claims fail to identify an 

advertisement; (4) that certain named plaintiffs fail to allege a 

breach of implied warranty within the warranty period; (5) that New 

York implied warranty claims fail for lack of privity; (6) that the 

Song–Beverly Consumer Warranty Act (Civ. Code § 1790 et seq.) 

("Song-Beverly") and Mag.-Moss require damages that were not 

pleaded; (7) that Mag.-Moss claims without a viable underlying 

state-law claim should be dismissed; and (8) that the Court should 

defer to the "primary jurisdiction" of the National Highway and 

Transportation Safety Administration ("NHTSA") rather than decide 

this case. The Court addresses each in turn. 

1. Transactions with Hyundai Motor Company

First, Defendants argue that HMC (as opposed to Hyundai Motor 

America) should be dismissed because Plaintiffs have failed to 

allege a "transaction" with HMC, and thus have not shown that HMC 

had a duty to disclose the alleged stalling defect to Plaintiffs. 

The Court requested and received supplemental briefing on this 

issue due to concern that a "transaction" may not be required where 

a party alleges a safety concern posed by the defect. See Supp. 

Briefing Order at 2; see also Supp. Mot. at 7-10; Supp. Opp'n at 6-

10; Supp. Reply at 3-5. 

While there are four distinct circumstances in California law 

in which "nondisclosure or concealment may constitute actionable 

fraud," LiMandri v. Judkins, 52 Cal. App. 4th 326, 336 (Cal. Ct. 

App. 1997), several cases have concluded that "no duty to disclose 

can arise in the absence of either a fiduciary duty or a 

transaction between the parties." See Fulford v. Logitech, Inc., 

No. C-08-2041 MMC, 2009 WL 837639, at *1 (N.D. Cal. Mar. 26, 2009) 

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(citing LiMandri, 52 Cal. App. 4th at 336-37); see also Cirulli v. 

Hyundai Motor Co., No. SACV 08-0854 AG (MLGx), 2009 WL 4288367, at 

*4 (C.D. Cal. Nov. 9, 2009) (dismissing CLRA claims against HMC -- 

as opposed to Hyundai Motor America -- for failing to plead a 

"transaction" with HMC). Thus, even if Plaintiffs argue that HMC 

had "exclusive knowledge of material facts not known to the 

plaintiff[s]," and "actively conceal[ed] some material fact[s]," 

MDT Opp'n at 15, Defendants contend Plaintiffs still must plead a 

transaction or other relationship between the Plaintiffs and HMC. 

See LiMandri, 52 Cal. App. 4th at 336; see also Los Angeles Mem'l 

Coliseum Comm'n v. Insomniac, Inc., 233 Cal. App. 4th 803, 831 

(January 27, 2015).4

However, "a duty to disclose may also arise when a defendant 

possesses or exerts control over material facts not readily 

available to the plaintiff[,]" at least when those material facts 

concern allegedly concealed safety risks known only to the 

manufacturer. See Jones v. ConocoPhillips, 198 Cal. App. 4th 1187, 

1198-99 (Cal. Ct. App. 2011) (stating that the general rule that 

"'manufacturers have a duty to warn consumers about the hazards 

inherent in their products'" is "equally pertinent to the scope of 

the defendants' duty to disclose") (quoting Johnson v. Am. 

Standard, Inc., 179 P.3d 905, 910 (Cal. 2008)); see also O'Shea v. 

Epson Am., Inc., No. CV 09-8063 PSG (CWx), 2011 WL 3299936, at *7-9 

(C.D. Cal. July 29, 2011) (noting that "[a]lthough California 

courts are split on this issue, the weight of authority suggests 

 

4

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found only a commercial relationship, not a fiduciary relationship. 

233 Cal. App. 4th at 831. It did not discuss -- as it was not 

relevant -- any safety exception, and thus is inapposite here. 

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that a manufacturer's duty to consumers is limited to its warranty 

obligations absent either an affirmative misrepresentation or a 

safety issue.") (citations omitted, emphasis added); Ehrlich v. BMW 

of N. Am., LLC, 801 F. Supp. 2d 908, 918 (C.D. Cal. 2010) ("[T]he 

Court concludes that a safety-based exception exists that might 

create a duty to disclose a defect even after the period for an 

express warranty expires and Plaintiff has sufficiently alleged . . 

. an unreasonable safety risk that would be material to a 

reasonable consumer."). Thus, in ConocoPhillips, the Court of 

Appeal concluded that the plaintiffs, family members of a deceased 

worker exposed to toxic chemicals, had sufficiently alleged a duty 

to disclose (and a claim for fraudulent concealment) against the 

manufacturers of those chemicals without requiring any prior 

"transaction" between the deceased worker and the manufacturers. 

ConocoPhillips, 198 Cal. App. 4th at 1199-1200; see also Daugherty 

v. Am. Honda Motor Co., Inc., 144 Cal. App. 4th 824, 836-37 (Cal. 

Ct. App. 2006) (noting the lack of allegations of a safety issue in 

concluding that Honda did not have a duty to disclose an alleged 

engine defect). 

Here, Plaintiffs allege that the stalling issue "poses an 

obvious and serious safety risk," that consumer reports "clearly 

document" that risk by detailing "many 'near misses,'" and that 

Defendants had "superior and exclusive knowledge of the Stalling 

Defect" since early 2009 by virtue of their exclusive access to 

pre-production testing and data, consumer complaints, internal 

testing, and other data. SAC at ¶ 7, 78, 89. Moreover, further 

illustrating the potential risks of stalling, Plaintiffs' complaint 

recounts several harrowing incidents, including two times when 

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named plaintiff Battaglia narrowly avoided collisions after his 

vehicle stalled and he lost power steering and brakes. Id. at ¶¶ 

48, 50. In this respect, this case is unlike the authorities on 

which Defendants rely requiring a transaction between the plaintiff 

and the defendant prior to finding a duty to disclose. See Wilson 

v. Hewlett-Packard, 668 F.3d 1136, 1142 (9th Cir. 2012) (concluding 

that plaintiffs did not sufficiently allege a nexus between the 

alleged design defect and the alleged safety hazard); Robinson v. 

HSBC Bank USA, 732 F. Supp. 2d 976, 980 (N.D. Cal. 2010) (analyzing 

whether a newspaper advertisement featuring a photograph of 

plaintiffs' house violated the CLRA); Cirulli, 2009 WL 4288367, at 

*1 (discussing an alleged frame corrosion defect without analyzing 

whether it was a safety risk); cf. Hoffman v. 162 N. Wolfe LLC, 228 

Cal. App. 4th 1178, 1192 (Cal. Ct. App. 2014) as modified on denial 

of reh'g (Aug. 13, 2014), review denied (Nov. 25, 2014) 

(distinguishing between the safety risk in ConocoPhillips and the 

case at bar, which involved allegations a landowner had a duty to 

disclose a prescriptive easement). 

Hyundai is therefore mistaken that it had no duty to disclose. 

Hyundai suggests that a duty to disclose presupposes a fiduciary 

relationship or some kind of transaction between the parties. See, 

e.g., Cirulli, 2009 WL 4288367, at *4 (dismissing claims against 

HMC under LiMandri, 52 Cal. App. 4th at 336-37, which Hyundai 

argues treats a transaction or fiduciary relationship as necessary 

for a duty to disclose). However, Cirulli and the other cases on 

which Hyundai relies are inapposite where, as here, Plaintiffs 

allege a safety defect that a reasonable consumer would find 

material. See Daugherty v. Am. Honda Motor Co., Inc., 144 Cal. 

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App. 4th 824, 836-37 (Cal. Ct. App. 2006) (noting the lack of 

allegations of a safety issue in concluding that Honda did not have 

a duty to disclose an alleged engine defect); Mui Ho v. Toyota 

Motor Corp., 931 F. Supp. 2d 987, 997 (N.D. Cal. 2013) ("[A] duty 

to disclose may arise if a plaintiff alleges 'physical injury 

or . . . safety concerns posed by the defect.'") (quoting 

Daugherty, 144 Cal. App. 4th at 836); see also Falk v. General 

Motors Corp., 496 F. Supp. 2d 1088, 1094 (N.D. Cal. 2007); Williams 

v. Yamaha Motor Corp., U.S.A., No. CV 13-05066 BRO, 2015 WL 

2375906, at *8 (C.D. Cal. Apr. 29, 2015).5 Here, Plaintiffs' 

complaint is replete with allegations that the alleged stalling 

defect is dangerous -- a reasonable conclusion given that when the 

vehicle stalls it apparently loses both power steering and power 

brakes, thus making the vehicle difficult to steer or stop. See 

SAC at ¶¶ 17, 48-50, 78, 87-89. 

As noted in its Supp. Briefing Order, in at least one case 

involving a concealed safety risk, the California Court of Appeal 

reversed the dismissal of a fraudulent concealment claim against 19 

chemical companies even though those companies only contracted with 

the plaintiffs' decedent's employer. See ConocoPhillips, 198 Cal. 

App. 4th at 1199-1200. While the Court of Appeal did not discuss 

 

5

 Williams, where there was no actual injury yet the court still 

found an adequate safety concern to require disclosure, is being 

appealed, No. 15-55924, filed June 12, 2015. The Court sua sponte

considered -- and rejected -- the need for a stay pending the 

results of this appeal. There are adequate legal grounds upon 

which to decide the matter at issue and there are sufficient 

allegations which the Court finds survive this motion to dismiss 

such that: (1) parties can complete another attempt at a proper 

amended complaint while the appeal is pending without any harm; and 

(2) should the parties begin discovery, discovery would be as 

applicable to those issues not reached by the matters pending on 

appeal as to those issues potentially reached by the Ninth Circuit. 

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the precise authorities on which Defendant here bases their 

argument for dismissing HMC, it notably fails to require a 

transaction (vice a relationship) between the decedent and the 

chemical companies to create a duty to disclose. This casts doubt 

on Defendants' arguments that a transaction is required in the 

first place and that HMC should be dismissed because Plaintiffs 

never transacted with it. See id.6 Likewise, Hyundai's complaints 

about group pleading are misplaced. See Cirulli, 2009 WL 4288367, 

at *4 (noting that group pleading is permissible so long as the 

complaint puts defendants on notice of claims against them). 

As referenced above, Plaintiffs sufficiently allege 

materiality. Plaintiffs state that they would have behaved 

differently had they been aware of the alleged stalling defect. 

SAC ¶¶ 43-44, 52, 59, 64, 71, 117; see also Falk, 496 F. Supp. 2d 

at 1095-96. Again, this is highly reasonable, as very few 

"reasonable consumer[s]" would buy a car (at full price) that they 

knew will unpredictably stall resulting in an inability to steer or 

brake. As a result, Plaintiffs have adequately pleaded a duty to 

disclose on the part of both HMC and Hyundai Motor America.7 

 

6

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ConocoPhillips has been limited to its facts by Hoffman, 228 Cal. 

App. 4th at 1192 ("A manufacturer's nondisclosure to the public of 

the toxic nature of its products where the toxicity is known to the 

manufacturer but not to others is a very different circumstance 

from a landowner's knowledge that it possesses prescriptive 

easement rights."). That ConocoPhillips cannot be used to extend 

liability for concealment under the purely business facts presented 

in Hoffman supports Plaintiffs' argument that safety concern cases 

are of a different ilk. See Supp. Opp'n at 8-9. The Court also 

rejects the collected citations offered by Defendants at Supp. Mot. 

at 8 n.7, as the cases therein that would be binding on the Court 

(vice persuasive) all fail to involve a safety concern pursuant to 

manufacturer liability or else fail (in dicta) to do more than cite 

to LiMandri without any analysis. 

7

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Federal Rule of Civil Procedure 9(b)'s heightened pleading standard 

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Defendants further argue Plaintiffs' CLRA claims against HMC 

must be dismissed because the CLRA only applies to "unfair methods 

of competition and unfair or deceptive acts or practices undertaken 

. . . in a transaction." Cal. Civ. Code § 1770 (emphasis added). 

However, as numerous cases have noted, the CLRA is to be 

interpreted broadly, and "a cause of action under the CLRA may be 

established independent of any contractual relationship between the 

parties." See McAdams v. Monier, Inc., 182 Cal. App. 4th 174, 186 

(Cal. Ct. App. 2010); Chamberlan v. Ford Motor Co., 369 F. Supp. 2d 

1138, 1144 (N.D. Cal. 2005) ("Plaintiffs who purchased used cars 

have standing to bring CLRA claims, despite the fact that they 

never entered into a transaction directly with" the manufacturer). 

While Hyundai's argument is not without support, see Cirulli, 2009 

WL 4288367, at *4, "the weight of persuasive authority falls 

heavily against the position [Hyundai] takes here . . . ." See 

Gray v. BMW of N. Am., LLC, No. 13-cv-3417-WJM-MF, 2014 WL 4723161, 

at *4 (D.N.J. Sept. 23, 2014) (collecting sources). 

 As a result, Defendants' motion to dismiss HMC is DENIED. 

Insofar as Defendants' motion to dismiss is based on a lack of a 

transaction or duty to disclose, it is DENIED. 

2. UCL, CLRA, and Fraud Claims 

 Defendants make three arguments relating to why the UCL, CLRA, 

and Fraud claims should fail. The primary challenge claims a 

failure by Plaintiffs to adequately plead that Defendants had the 

 

for claims grounded in fraud by grouping together both Hyundai 

Motor America and HMC. However, in "a case of an alleged 

fraudulent concealment perpetrated by sophisticated corporate 

entities that are related to each other, the Plaintiffs need not 

distinguish the specific roles that each entity played in the 

fraudulent concealment in order to meet the Rule 9(b) standard." 

Gray, No. 13-cv-3417-WJM-MF, 2014 WL 4723161, at *2. 

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requisite knowledge of the defect at the relevant time. Defendants 

then argue they had no duty to make disclosures related to used 

vehicles and that there was no properly alleged violation of the 

TREAD Act. The Court focuses on the first argument, and then 

briefly resolves the latter two. 

i. Knowledge

Hyundai argues that Plaintiffs' allegations that it knew of 

the alleged stalling defect are insufficient because: (1) they 

post-date the named plaintiffs' vehicle purchases; (2) are 

insufficient "summary claims of knowledge" rejected by the Ninth 

Circuit in Wilson, 668 F.3d 1136; or (3) the claims are otherwise 

insufficient to show Hyundai's knowledge. Mot. at 10-11. 

Plaintiffs allege Defendants knew or should have known of the 

alleged stalling defect before they purchased their Santa Fes 

because Defendants had exclusive access to pre-production, prerelease, and post-release testing data, early consumer complaints, 

high warranty reimbursement rates and repair orders, replacement 

part sales data, and data from dealerships. See SAC ¶ 89. 

Moreover, Plaintiffs also point to customer complaints made with 

the NHTSA and a string of Technical Service Bulletins ("TSBs") as 

further demonstrating Hyundai's knowledge. See, e.g., SAC ¶¶ 4-5, 

7-12, 17-19, 21, 80. 

While Plaintiffs point to cases such as Falk, 496 F. Supp. 2d 

at 1099, which found that similar allegations of exclusive 

knowledge were sufficient, the Ninth Circuit's subsequent decision 

in Wilson, 668 F.3d at 1145-48 calls that conclusion into question. 

Wilson involved allegations that HP failed to disclose an allegedly 

dangerous safety defect that could cause laptop computers to 

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overheat or catch fire. Id. at 1139. The Ninth Circuit concluded 

plaintiffs insufficiently alleged HP's knowledge by comparing their 

vague assertions of access to information and testing with the 

allegations in Cirulli, 2009 WL 4288367, at *4. In Cirulli, 

plaintiffs alleged in relevant part that Hyundai knew of an alleged 

defect in its Sonata vehicles because it began tracking the NHTSA 

database for reports of defects in 1999, when the first affected 

Sonata was released. Id.; Wilson, 668 F.3d at 1146-47; see also 

Wilson, 668 F.3d at 1147 (contrasting Falk due to reliance on 

"'amassed weight of [customer] complaints' together with other 

indications that GM had knowledge of the defect.'") (quoting Falk, 

496 F. Supp. 2d at 1096-97) (alteration in original). 

The Court nonetheless finds that Plaintiffs have adequately 

alleged Hyundai's knowledge of the alleged stalling defect. The 

Court agrees that some of Plaintiffs' knowledge allegations are the 

kinds of generic boilerplate rejected by Wilson and subsequent 

cases. See, e.g., Grodzitsky v. Am. Honda Motor Co. Inc., No. 

2:12-cv-1142-SVW-PLA, 2013 WL 690822, at *6 (C.D. Cal. Feb. 19, 

2013). Here, however, Plaintiffs provide more than merely 

conclusory allegations of knowledge. See Falco v. Nissan N. Am. 

Inc., No. CV 13-00686 DDP MANX, 2013 WL 5575065, at *6 (C.D. Cal. 

Oct. 10, 2013) ("in the present case, unlike in Wilson and 

Grodzitsky, Plaintiffs have alleged particular facts which make 

Plaintiffs' allegations more than merely speculative or 

conclusory."); MacDonald v. Ford Motor Co., 37 F. Supp. 3d 1087, 

1095-96 (N.D. Cal. 2014) ("Dispositive in each of Mui Ho and 

Grodzitsky was whether the plaintiffs provided additional 

information supporting their allegations."); Mui Ho, 931 F. Supp. 

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2d at 998. Specifically, in addition to alleging Defendants had 

exclusive access to information about the stalling defect sooner, 

Plaintiffs allege a connection between pre-2014 TSBs aimed at the 

Santa Fes' throttle and Engine Control Module, the use of both (as 

documented in NHTSA complaints and the named plaintiffs' own 

allegations) to address stalling, and Hyundai's resulting knowledge 

(through monitoring the NHTSA database). See SAC ¶¶ 8-11, 41, 68, 

80. Thus, even though Hyundai's most recent TSB post-dates 

Plaintiffs' Santa Fe purchases by at least 22 months, the knowledge 

Plaintiffs allege came significantly earlier.8

 Defendants' 

arguments to the contrary stressing that there is no connection 

between these early TSBs and the stalling defect may (or may not) 

prove superior at a later stage of litigation. See MTD Reply at 6-

7. But at this stage, where the Court is bound to accept the 

pleadings as true, the pleadings form a plausible basis for belief 

that Defendants knew or reasonably should have known of a defect 

(which per the earlier section they had a duty to disclose). 

 ii. Duty to Disclose on Used Vehicles 

Defendants' argument regarding used vehicle purchases appears 

to be derivative of their contention that they had no duty to 

disclose. Accordingly, their argument to dismiss Plaintiffs Jaffe 

and Saitta (both of whom purchased used Santa Fes) also fails. See 

MTD at 16.9

 

8

 This conclusion is further supported by Parenteau v. Gen. Motors, 

LLC, No. CV 14-04961-RGK MANX, 2015 WL 1020499, at *6 (C.D. Cal. 

Mar. 5, 2015) (discussing Falco, Wilson, and Mui Ho, 931 F.Supp.2d 

at 998 (where allegations of internal testing and reporting were 

sufficient when coupled with allegation that manufacturer issued 

two technical service bulletins regarding the defect)). 

9

 To the extent Hyundai argues that because used cars are sold 

between private parties, and it would be an "impossibility" for it 

to "inject itself into each transaction" and disclose the existence 

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 iii. TREAD Act 

As the Court has found that Plaintiffs adequately pleaded an 

independent basis for their UCL claim, the Court need not address 

Defendants' arguments regarding the TREAD Act. See 49 U.S.C. §§ 

30118(c), 30119(a). 

As a result, Hyundai's motion to dismiss is DENIED as to 

Plaintiffs' UCL, CLRA, and common-law fraud claims. 

3. False Advertising Law Claims 

Next, Defendants argue that Plaintiffs' FAL claims fail 

because they lack the requisite factual support and do not identify 

specific advertisements. There must be more to allegations than 

simply elements of a cause of action -- there must be factual 

allegations supporting those elements. See Ashcroft, 556 U.S. at 

678 ("Threadbare recitals of the elements of a cause of action, 

supported by mere conclusory statements, do not suffice") 

(discussing Twombly, 550 U.S. 544). Moreover, to satisfy the Fed. 

R. Civ. P. 9(b) particularity requirement, a plaintiff must include 

allegations about the time, place, and content of the alleged 

misrepresentations, as well as an explanation as to why the 

statement or omission complained of is false or misleading. Janda 

v. T-Mobile, USA, Inc., No. C 05-03729 JSW, 2008 WL 4847116, at *4 

(N.D. Cal. Nov. 7, 2008) (citations omitted). However, this 

requirement is satisfied if the complaint "identifies the 

circumstances constituting fraud so that a defendant can prepare an 

adequate answer from the allegations." Id. (quoting Moore v. 

 

of the alleged stalling defect, that concern is misplaced. Reply 

at 9. Disclosures can take many forms and do not necessarily 

require a manufacturer to be aware of or participate in private 

transactions. However, to the extent this is actually a privity 

argument, the Court separately considers this matter later herein. 

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Kayport Package Exp., Inc., 885 F.2d 531, 540 (9th Cir. 1989)). 

The goal, per the Ninth Circuit, is to ensure that, "when averments 

of fraud are made, the circumstances constituting the alleged fraud 

[are] specific enough to give defendants notice of the particular 

misconduct . . . so that they can [defend] against the charge and 

not just deny that they have done anything wrong." Id. (quoting 

Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003)). 

Here, some factual allegations seem, at first, to be proper. 

Per the Court's earlier discussion, Defendant had knowledge of the 

defect prior to the purchases made by Plaintiffs, and accordingly 

had a duty to disclose, thus satisfying part of the requirements of 

Daugherty, 144 Cal. App. 4th at 835. In line with this, Plaintiffs 

have provided some examples of statements Hyundai has made -- to 

include time, place, content, and explanations thereof -- that are 

false or misleading pursuant to a theory of fraudulent omission. 

See, e.g., SAC ¶¶ 13-18. However, other information in the SAC 

itself suggests that this same specific written statement which was 

false may not have been seen and thus was not misleading to at 

least one named plaintiff, if not more. See, e.g., SAC ¶ 69 

(where a named Plaintiff did not receive a notice of the Service 

Campaign, and thus likely also did not visit a website described 

therein which allegedly falsely stated that said named Plaintiff's 

vehicle was unaffected). 

Other examples of advertisements or information lack 

specificity as to the precise nature of the specific statement and 

sometimes lack an explanation of precisely how the specific 

statement referenced was false or misleading (even if by omission). 

See SAC ¶¶ 39, 44, 46, 52, 54, 59, 60, 64, 66, 71. While 

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Defendants can easily review what was included in a car's "Monroney 

sticker" or on their own website, the content of other amorphous 

internet research or statements by a salesperson give insufficient 

notice for a Defendant to adequately respond. The need for 

specificity remains -- or perhaps is especially present -- where 

Plaintiffs rely on a theory of fraudulent omission. Plaintiffs' 

failure to specifically identify the substance of the claims makes 

it difficult for even the Court to distinguish between claims of 

product superiority "that are vague or highly subjective [and thus] 

often amount to nonactionable puffery," versus "'misdescriptions of 

specific or absolute characteristics of a product [which] are 

actionable.'" Southland Sod Farms v. Stover Seed Co., 108 F.3d 

1134, 1145 (9th Cir. 1997) (citation omitted) (quoting Cook, 

Perkiss & Liehe, Inc. v. N. California Collection Serv. Inc., 911 

F.2d 242, 246 (9th Cir. 1990)); see also Glen Holly Entm't, Inc. v. 

Tektronix Inc., 343 F.3d 1000, 1005 (9th Cir. 2003) (citing Cook). 

Plaintiffs' general explanations that anybody made aware of the 

Stalling Defect "would not have purchased the Class Vehicles or 

would have paid less for them" are also insufficient to help 

Defendants defend a specific advertisement against claims of False 

Advertising. See SAC ¶ 87. 

Given the potential that otherwise properly plead fraudulent 

omissions may relate to individuals who (per the complaint) were 

not actually exposed to the advertising and given also the lack of 

specificity describing the specific statements at issue, the Court 

GRANTS Defendants' motion to dismiss.10 However, the Court 

 

10 Even so, the Court rejects arguments that there was no 

allegation of the timing of the purchase in relation to the 

exposure to the advertising claims or reliance. See MTD Reply at 

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DISMISSES WITHOUT PREJUDICE and GRANTS Plaintiffs leave to amend in 

the belief that Plaintiffs can likely properly allege a violation 

in light of the Court's Order.11

 4. Breach of Implied Warranty 

 Defendants next argue that the maximum implied warranty is one 

year for new goods, three months for used goods. In this much, the 

Court agrees. Cal. Civ. Code §§ 1791(c), 1795.5(c). Defendants 

then describe how the breach as alleged was discovered outside the 

period for three of the named plaintiffs and accordingly must be 

dismissed. MTD at 18. Plaintiffs respond that the breach is 

considered to have occurred at the time of sale and thus within the 

period even if discovered after the period if a defect rendered it 

unmerchantable at the time of sale. MTD Opp'n at 22-23. This 

argument relies primarily on Mexia v. Rinker Boat Co., 174 Cal. 

App. 4th 1297, 1304-05 (2009), and its progeny. Defendants argue 

that Mexia is a recognized outlier which the Court should decline 

to extend in this case. MTD Reply at 11-12. 

Mexia involved a boat that allegedly contained a latent defect 

which caused the boat's engine to corrode approximately two years 

after its purchase. The plaintiff in Mexia was able to present 

evidence that the corrosion was due to said latent defect which 

resulted in the boat being unmerchantable at the time of sale. 

Therefore, even though the defect could only be discovered outside 

the warranty period, the breach occurred within the period and was 

 

11 (citing Hydoxycut Mktg. & Sales Practices Litig v. Iovante 

Health Scis. Group, Inc., 801 F. Supp. 2d 993, 1006 (S.D. Cal. 

2001)). It seems clear from the pleadings read with all favorable 

inferences in favor of the Plaintiffs that named plaintiffs were 

exposed to advertisements shortly before their purchase and relied 

on those statements. 

11 The Court does not opine on the merits of any such allegation. 

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thus a cognizable claim under Song–Beverly. Mexia, 174 Cal. App. 

4th at 1300, 1308. 

Numerous courts have extensively examined Mexia and its 

applicability. Some apply the rule of Mexia. See, e.g., Malone v. 

CarMax Auto Superstores California, LLC, No. LA CV14-08978 JAK, 

2015 WL 3889157, at *7 (C.D. Cal. June 23, 2015) ("The implied 

warranty of merchantability may be breached by a latent defect 

undiscoverable at the time of sale."); Kas v. Mercedes-Benz USA, 

LLC, No. CV 11-1032-GHK PJWX, 2011 WL 5248299, at *2 (C.D. Cal. 

Oct. 31, 2011) (applying Mexia to holding that where "Plaintiff has 

alleged the Radiator Defect existed at the time Plaintiff purchased 

the vehicle" a claim made outside the one year statutory period is 

nonetheless adequately made and the motion to dismiss is 

appropriately denied). Others decline to follow it. See, e.g., 

Sharma v. BMW of N. Am., LLC, No. C-13-2274 MMC, 2015 WL 75057, at 

*4-6 (N.D. Cal. Jan. 6, 2015) (opining that Mexia applies "where 

the goods are not fit for their ordinary purpose from the outset, 

but is inapplicable where the goods perform as warranted during the 

statutorily provided period and thereafter fail to continue to so 

perform." (citations omitted)); Reply at 12 n.17 (collecting 

cases). Still others use Mexia in a discussion of the Uniform 

Commercial Code ("UCC"). See MacDonald, 37 F. Supp. 3d at 1099-100 

(where coolant pumps were alleged to have an inherent defect at the 

time of sale, the latest each Plaintiff could have brought a claim 

was four years after the purchase, per Mexia and the UCC). 

In navigating these murky waters, the Court is cognizant that 

for matters of California law, the Court takes its cue from the 

California Court of Appeal unless there is convincing evidence the 

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California Supreme Court would rule differently (while also 

remaining bound by decisions from the Ninth Circuit). See 

California Pro–Life Council, Inc. v. Getman, 328 F.3d 1088, 1099 

(9th Cir. 2003). Focusing on just these binding cases, recent 

courts have applied Mexia with little concern for the debate 

surrounding its applicability. See Ortega v. Toyota Motor Sales, 

U.S.A., Inc., 422 F. App'x 599, 600-01 (9th Cir. 2011) (applying 

Mexia but finding against plaintiff on summary judgment for failure 

to adequately support its claims that the defect was present in the 

used vehicle at the time of sale or within three months 

thereafter); Jones v. Credit Auto Ctr., Inc., 237 Cal. App. 4th 

Supp. 1, 9-10 (Cal. App. Dep't Super. Ct. 2015) (breach may occur 

at any time during the original statutory period, citing Mexia for 

the proposition that "the purchaser was required to show that the 

defect existed at the time the product was sold or delivered[,]" 

and therefore a breach occurring one month after a purchase was 

cognizable).12 Other cases suggest that the UCC sets a firm 4-year 

statute of limitation for bringing an action, but that the action 

must relate back to the limited period of the implied warranty (1-

year or 3-months for new or used goods, respectively). Rooney v. 

Sierra Pac. Windows, 566 F. App'x 573, 576 (9th Cir. 2014) (citing 

Mexia for the proposition that "providing that an action for breach 

of warranty under the Song–Beverly, Civ. Code § 1790 et seq., has 

four-year statute of limitations"). 

 

12 The facts of Jones involved a breach that was discovered within 

the three month statutory period, and thus Jones did not directly 

reach whether, under Mexia, a latent defect discovered later could 

be cognizable. Jones merely cites Mexia approvingly for a rule, 

and applies the simple statutory deadline which yielded the same 

result without requiring that court to consider this debate. 

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A California appellate court has outright followed Mexia in a 

published opinion. Donlen v. Ford Motor Co., 217 Cal. App. 4th 

138, 149 (2013), as modified on denial of reh'g (July 8, 2013) 

("Postwarranty repair evidence may be admitted on a case by case 

basis where it is relevant to showing the vehicle was not repaired 

to conform to the warranty during the warranty's existence."). 

This is noteworthy insofar as Donlen was published a month after 

all but one of the cases cited by Defendants. That case (Sharma, 

2015 WL 75057), in turn, does not appear to have involved a defect 

already existing in the vehicle13 and there is no indication that 

the Court was provided with the Donlen opinion to assist in its 

decision-making.14 When harmonized with Donlen, Sharma reinforces 

 

13 Sharma involved a design defect that made certain drainage pipes 

"prone to become clogged," evidencing non-defective parts that were 

likely to cause a malfunction happen in the future rather than a 

defective product installed from the get-go. Sharma, 2015 WL 

75057, at *2. The facts before the Court are far more reminiscent 

of a case cited by Mexia and factually distinguished by Sharma, 

namely Moore v. Hubbard & Johnson Lumber Co., 149 Cal. App. 2d 236, 

308 P.2d 794 (1957). In Moore, lumber was infested with beetles 

making it unusuable and unsalable from the date of sale, even 

though the defect was unknown at that date. So too, here, the 

Court is presented with a case where the car engine allegedly 

contains an unseen defect in its engine from the get-go, directly 

relating to safety and a pre-existing broken part -- facts that 

Sharma lacks. 14 Sharma relies on collected cases all dated before Donlen and 

does not appear to consider Donlen in arriving at its conclusion. 

2015 WL 75057, at *4-6. Moreover, the cases collected largely do 

not go to the types of safety concerns that make a good 

unmerchantable. The exception is Grodzitsky v. American Honda 

Motor Co., 2013 WL 2631326 (C.D. Cal. June 12, 2013) (published one 

month before Donlen). Grodzitsky, in turn, analyzed Mexia, its 

underpinnings, and other pre-Donlen federal district court cases, 

plus relied on two unpublished California appellate court 

decisions. Id. at *10-11. In so doing, Grodzitsky expressly 

recognized that "[a]lthough unpublished California cases have no 

precedential value, they may be considered 'as a possible 

reflection of California law.'" Id. at *11 n.12 (quoting Roberts 

v. McAfee, Inc., 660 F.3d 1156, 1167 n.6 (9th Cir. 2011)). It is 

unlikely a court would rely on such authority and ignore entirely a 

published California appellate case if it knew of Donlen.

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the principle that a parts defect must exist at the time of sale or 

come to exist during the statutory period, not merely possess a 

potential to break down. When so understood, the quotation by 

Defendants from Sharma properly states that one can use evidence of 

a latent defect causing a break-down under the rule of Mexia where: 

"[innately defective] goods are not fit for their 

ordinary purpose from the outset [even if they perform 

as warranted during that period], but [that same 

principle] is inapplicable where the [innately nondefective] goods perform as warranted [without 

breaking down] during the statutorily provided period 

and thereafter fail to continue to so perform [due to 

subsequent breakdown]." 

Sharma, 2015 WL 75057, at *14-15. The Court also notes that the 

circumstances of the case here are analogous to those described in 

Marcus, where a clear safety risk is alleged as the basis that the 

vehicle was unmerchantable at the time of sale. See Marcus, 2015 

WL 1743381, at *6 (collecting cases deriving the referenced rule). 

Accordingly, on these specific facts, the Court follows the Mexia 

rule as limited by the UCC.

Here, then, the California claims were brought within 4 years 

of the purchase of the vehicle, and evidence pleaded in the 

complaint shows that the vehicles were unmerchantable at the time 

of purchase due to an alleged latent safety defect which could not 

reasonably have been discovered by Plaintiffs sooner (though 

allegedly the defect was already known to Defendants) but were 

already present within the vehicle's engine such that breaking down 

was simply a matter of time. See, e.g., SAC ¶¶ 2-3, 8-10, 89, 92, 

94-95. Whether Plaintiffs can produce the evidence to meet their 

burden on summary judgment is irrelevant at this procedural stage 

where all allegations in the complaint are taken as true. C.f. 

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Ortega, 422 F. App'x at 601. Therefore, the Court finds the claims 

regarding breach of warranty are proper and DENIES Defendants' 

motion.15 

5. Privity 

Defendants next attack named plaintiff Mancuso's impliedwarranty claim under N.Y. U.C.C. § 2-314, arguing that she lacks 

privity with Defendants by virtue of having made her purchase from 

a third party dealership. See SAC ¶ 35, MTD at 18-19. Plaintiffs 

respond that such privity exists "if the dealerships with which 

plaintiffs dealt were defendant's sales or leasing agents, and 

disclosure is needed with respect to the latter possibility." 

Gordon v. Ford Motor Co., 239 A.D.2d 156, 156 (N.Y. App. Div. 

1997); see also MTD Opp'n at 23. Plaintiffs respond that dealers 

are not agents of manufacturers, properly citing Herremans v. BMW 

of N. Am., LLC, 2014 U.S. Dist. LEXIS 145957, at *18 (C.D. Cal. 

Oct. 3, 2014) (collecting cases to this effect); see also MTD Reply 

at 12-13. However, Herremans also states that "an automobile 

dealership may under certain circumstances be an agent of the 

manufacturer." Herremans, 2014 U.S. Dist. LEXIS 145957, at *18 

(quoting Kent v. Celozzi-Ettleson Chevrolet, Inc., No. 99 C-2868, 

1999 WL 1021044, at *4 (N.D. Ill. Nov. 3, 1999)). When considering 

all these cases together, it appears that a showing (or, at this 

stage, express pleading) would be required to show Star Hyundai in 

Bayside, New York, was defendant's sales or leasing agent. As that 

is presently lacking in the complaint, the Court GRANTS Defendants' 

/// 

 

15 Defendants do not challenge and thus waive arguments related to 

plaintiff Reniger, whose stalling began within a few months of 

purchase, making the claim timely under any reading of Mexia. 

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motion and the claim is DISMISSED WITHOUT PREJUDICE. Plaintiffs 

are given leave to amend to fix this issue. 

6. Damages 

 Defendants bring their Article III standing arguments a second 

time, here in the guise of requiring actual, cognizable damages 

under Song-Beverly and Mag.-Moss. MTD at 19. Plaintiffs similarly 

rely on their showings of damages in relation to Article III 

standing. MTD Opp'n at 23. The reply fails to meaningfully 

respond to a critical detail of Plaintiffs' argument: "two of the 

plaintiffs, Oren Jaffe and Julia Reniger, allege out-of-pocket 

damages." Id., contra MTD Reply at 13. Accordingly, the complaint 

contains cognizable, actual damages even under Defendants' own 

scheme. The Court further notes that the Article III standing 

arguments made by Defendant do not challenge Jaffe's allegations of 

damages (as they fail to address Jaffe's standing), consequently 

waiving any objections thereto for the purposes of this motion. 

The Court therefore DENIES Defendants' motion and does not reach or 

consider the issue of whether Plaintiffs' other measure of damages 

would also constitute a sufficient claim for damages. 

 7. Mag.-Moss Claims

 The Court and all Parties agree "claims under the MagnusonMoss Act stand or fall with [the] express and implied warranty 

claims under state law." Clemens v. DaimlerChrysler Corp., 534 

F.3d 1017, 1022 (9th Cir. 2008); see also MTD Mot. at 20, MTD Reply 

at 24. The Court has found that California state warranty claims 

are properly pled but New York state warranty claims failed for 

lack of privity. Accordingly, the Court DENIES Defendants' motion 

with respect to Mag.-Moss claims related to the California claims 

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but GRANTS Defendants' motion with respect to Mag.-Moss claims 

related to the New York claims. As before, the claim is DISMISSED 

WITHOUT PREJUDICE, and as the Court has granted Plaintiffs leave to 

amend the underlying New York claim the Court by extension GRANTS 

leave to amend to support related Mag.-Moss claims. 

 8. Deference to NHTSA's Jurisdiction

 The Court and all Parties agree that this case is bound by 

Clark v. Time Warner Cable, 523 F.3d 1110, 1115 (9th Cir. 2008). 

There, the Ninth Circuit explains that 

[a]lthough "[n]o fixed formula exists for applying the 

doctrine of primary jurisdiction," Davel Commc'ns, 

Inc. v. Qwest Corp., 460 F.3d 1075, 1086 (9th Cir. 

2006) (internal quotation marks and citation omitted), 

we have traditionally examined the factors set forth 

in General Dynamics, and held that the doctrine 

applies in cases where there is: "(1)[a] need to 

resolve an issue that (2) has been placed by Congress 

within the jurisdiction of an administrative body 

having regulatory authority (3) pursuant to a statute 

that subjects an industry or activity to a 

comprehensive regulatory authority that (4) requires 

expertise or uniformity in administration," [citations 

omitted]. In considering these factors, we have 

previously explained that the primary jurisdiction 

doctrine is designed to protect agencies possessing 

"quasi-legislative powers" and that are "actively 

involved in the administration of regulatory 

statutes." [citations omitted]. 

Clark, 523 F.3d at 1115.16 Defendants argue that these factors 

support a finding that the NHTSA should be granted primary 

jurisdiction for the recall and automobile safety concerns that are 

an important part of this case. The Court disagrees, and finds 

that the four factors, on balance, favor denial at this time. 

 

16 Parties also cite the Court to the persuasive but non-binding 

case McQueen v. BMW of N. Am., LLC, No. CIV.A. 12-6674 SRC, 2013 WL 

4607353, at *4 (D.N.J. Aug. 29, 2013). The test in the case is 

notably different thus limiting its applicability. That said, 

McQueen is a good example of how Courts can reasonably decline to 

accept primary jurisdiction arguments like many made by Defendants. 

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The first factor favors resolution by the Court, as the Court 

is better able to handle a products defect case involving numerous 

allegations of warranty violations. Defendants argue that the nonaction of the NHTSA after being notified "is an exercise of its 

jurisdiction." MTD Reply at 14 (emphasis in original). While the 

Court recognizes that Defendants' argument is made in a slightly 

different context, if accepted it shows NHTSA would provide no 

resolution, and thus referring this case to them runs contrary to a 

need for resolution. 

The second factor and third factor both require note that 

Congress has placed some of this case within the reach of a Federal 

agency, but by no means all or even the bulk thereof. The 

framework for the NHTSA is set forth in the National Traffic and 

Motor Vehicle Safety Act of 1966 ("Safety Act"). 49 U.S.C. § 

30101, et seq. Section 30103 of the Safety Act, as cited by 

Plaintiffs, limits the jurisdiction of the NHTSA to exclude 

warranty laws (Subsection d) and common law liability (Subsection 

e). If anything, the Court might consider referral with respect to 

remedies if Plaintiffs prevail at trial or via pre-trial 

dispositive motions and the Court finds a recall the only 

appropriate remedy. C.f. MTD Opp'n at 25. But it would seem odd 

indeed to refer the entire case to an agency for resolution knowing 

that the agency could legally only consider a specific claim for 

relief included as merely one facet of the case. See Tovar v. 

Midland Credit Mgmt., No. 10CV2600 MMA MDD, 2011 WL 1431988, at *3 

(S.D. Cal. Apr. 13, 2011) (noting Clark is distinguishable where 

the issues before the agency are different than those before the 

/// 

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court).17 Thus the Court concludes that these two factors on 

balance favor resolution by the Court. 

The fourth factor requires expertise and consistency. The 

Court does possess expertise from many years of experience with 

product (and vehicle) defect cases, but admits it possesses far 

less expertise than an Agency which focuses on such matters 

exclusively. Even so, the Court does not see this case as one 

which presents such complex issues that it is comparable to the 

expertise required in Clark. See Clark, 523 F.3d at 1112-14 

(evaluating Voice over Internet Protocol technology, a topic 

already being actively regulated by the FCC). Other Courts have 

declined to find primary jurisdiction necessary for similar 

reasons. See Guido v. L'Oreal, USA, Inc., No. CV 11-1067 CAS JCX, 

2013 WL 454861, at *6 (C.D. Cal. Feb. 6, 2013) (noting Clark 

applied to technical and policy questions). The Court sees little 

or no danger to uniformity where a suit is brought as (what the 

Court anticipates will be) a broadly styled putative class action 

meant to capture many drivers of a certain vehicle during a certain 

timeframe. There is no pending investigation and no reason to 

believe that the NHTSA has any interest in this case, whereas the 

Court has already invested valuable judicial resources in 

considering this and related motion arguments, and will ultimately 

be required to turn its attention back to this case (should it 

refer the case to NHTSA) to consider the warranty claims herein 

with a uniform decision. 

/// 

 

17 Insofar as Defendants attempt to restyle their arguments to make 

this type of narrow request, MTD Reply at 13-14, the Court DENIES 

the request as not yet ripe. 

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Accordingly, the factors on balance and judicial economy weigh 

in favor of denying Defendants' arguments for primary jurisdiction. 

Defendants' motion is therefore DENIED on this matter. 

 C. 12(f) Motion 

 Finally, the Court turns to the motion to strike. Motions to 

strike "are not favored and should not be granted unless it is 

clear that the matter to be stricken could have no possible bearing 

on the subject matter of the litigation." Astiana v. Ben & Jerry's 

Homemade, Inc., 2011 U.S. Dist. LEXIS 57348, at *34-35 (N.D. Cal. 

2011) (citing Colaprico v. Sun Microsystem, Inc., 758 F. Supp. 

1335, 1339 (N.D. Cal. 1991)). When a court considers a motion to 

strike, it "must view the pleading in a light most favorable to the 

pleading party." Id. 2011 U.S. Dist. LEXIS 57348, at *35 (citing 

In re 2TheMart.com, Inc. Sec Lit., 114 F. Supp. 2d 955, 965 (C.D. 

Cal. 2000)). The motion to strike should be denied "if there is 

any doubt whether the allegations in the pleadings might be 

relevant in the action." Id.; see also 2-12 Moore's Federal 

Practice - Civil § 12.37. 

Defendants seek to strike the class allegations made by 

Plaintiffs using Fed. R. Civ. P. 12(f) and 23(d)(1)(D). In support 

of their motion, Defendants expressly cite Ogola v. Chevron Corp., 

2014 U.S. Dist. LEXIS 117397, at *6, *19 (N.D. Cal. Aug. 21, 

2014)(Conti, J.). See Mot. to Strike Reply at 1, 2. Contrary to 

Defendants' use or summation thereof, Ogola makes very clear that 

the Court is not inclined to grant motions to strike under Fed. R. 

Civ. P. 12(f) or 23(d)(1)(D). See Ogola, 2014 U.S. Dist. LEXIS 

117397, at *19. If Ogola was insufficiently clear, the Court has 

since published a second order on point, describing how authorities 

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within this judicial district split on this matter and siding 

firmly with the authority which does not grant motions to strike at 

this early, motion to dismiss stage of litigation absent 

exceptional circumstances. See Roy v. Wells Fargo Bank, N.A., 2015 

U.S. Dist. LEXIS 39636, at *5 (N.D. Cal. Mar. 27, 2015) ("Both the 

text of Rule 12(f) and Ninth Circuit precedent agree that a court 

may strike from a pleading only an insufficient defense or any 

redundant, immaterial, impertinent, or scandalous matter."). 

Here, class allegations in Plaintiffs' complaint relating to 

Hyundai are not an insufficient defense, redundant, immaterial, 

impertinent, or scandalous. Defendants have not shown how the 

pleading fits into the limited categories permitted by Rule 12(f) 

(or, by extension, 23(d)(1)(D)), or any exceptional circumstance 

meriting the action requested of the Court. 

Defendants do make such arguments with respect to the 

complaint's discussion of Kia. However, even assuming Plaintiffs 

really are trying to bootstrap a second lawsuit into this one (a 

matter on which the Court does not opine), the complaint connects 

the Plaintiffs' concerns about Kia directly to their own case by 

alleging that, "[o]n information and belief, because of their close 

relationship with Kia and the overlap between their products, 

Defendants monitor and are aware of issues arising with Kia 

vehicles, including the Sorento." Compl. ¶ 29. Whether this 

monitoring and knowledge of problems with a sister vehicle will 

ultimately show "Defendants' knowledge of the Stalling Defect in 

the Santa Fe, and the inadequacy of Defendants' purported fix" is a 

matter for a different type of motion or a trier of fact. However, 

it is directly relevant to allegations of fraud and if otherwise 

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admissible (another matter the Court does not reach) could be used 

to prove intent. As there is "any doubt whether the allegations in 

the pleadings might be relevant in the action[,]" Defendants have 

not met their burden. See Astiana, 2011 U.S. Dist. LEXIS 57348, at 

*35.

Accordingly, the Court DENIES the motion to strike. The Court 

also DENIES as moot Defendants' request for judicial notice in 

support of its motion to strike and Plaintiffs' objection thereto. 

ECF Nos. 32, 38. The Court GRANTS LEAVE for Plaintiffs to amend 

the complaint to fix the issues noted in Mot. to Strike Opp'n at 8. 

V. CONCLUSION 

Defendants' motion to dismiss is GRANTED IN PART and DENIED IN 

PART. Defendants' motion is DENIED with respect to: lack of 

standing; that HMC should be dismissed from the case for lack of 

any transaction, that UCL, CLRA, and fraud should be dismissed for 

assorted reasons; that certain named plaintiffs fail to allege a 

breach of implied warranty within the warranty period; that 

Song-Beverly and Mag.-Moss claims required damages; that California 

Mag.-Moss claims were improperly pleaded; and that the Court should 

defer to primary jurisdiction. Defendants' motion is GRANTED with 

respect to: FAL claims failing to identify an advertisement; that 

New York implied warranty claims fail for lack of privity; and that 

Mag.-Moss related to the New York claims also failed. Plaintiffs 

are GRANTED LEAVE TO AMEND those portions which the Court has 

dismissed. While the Court has GRANTED LEAVE to amend the 

complaint several times in this Order, the Court hereby notices 

Plaintiffs that leave to amend yet again may be granted far more 

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sparingly, and failure to properly state a claim already considered 

by this opinion may result in dismissal of that claim with 

prejudice. 

Defendants' motion to strike is also DENIED. The Court GRANTS 

LEAVE for Plaintiffs to amend the complaint to fix those issues for 

which dismissal was granted and to cure the defect Plaintiffs noted 

in Mot. to Strike Opp'n at 8. 

Should Plaintiffs desire to amend their complaint, they must 

do so within 14 days of the date of this order. In doing so, 

Plaintiffs should be cognizant whether amending may create any 

statute of limitations defenses.

IT IS SO ORDERED. 

 

Dated: August 18, 2015 

UNITED STATES DISTRICT JUDGE

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