T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on a nd i s notpr e c e de nt * e xc e pta s pr ovi de d by 9th C i r . R . 36- 3.

** T he H on orabl e D avi d A . E zr a, D i stri ctJudg e f or the U . S . D i stri ct C our tf orthe D i s tr i c tof

H a w a i i , s i tt i ng by de s i gna t i on. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T R I C HA R D S MI T H; R E B E C C A K L E I N, i nd i vi du al l y a nd on behal f of a l l others s i m i l a r l y s i tua t e d, P l ai n t i ffs - A p p el l an t s, v. F OR D MOT OR C OMP AN Y, D ef

endant- A pp el l ee . N o. 10- 17321 D . C . N o . 3 : 0 6 - c v - 0 0 4 9 7 - MMC ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e N o r th e rn D is tr ic t o f C a lif o rn ia M a xi ne M . C he s ne y , S e ni orD i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d N ove m be r29, 2011 S a n F r a n c is c o , C a lif

o rn ia B e f or e : T H O M A S a nd C L I F T O N , C i r c ui tJ udge s , a nd E Z R A , D i s tr i c tJ udge . ** P l a i nt i f f s R i c ha r d S m i th a nd R e be c c a K l e i n appe a l the di s tr i c tc our t ’ s gr a nt o f s u mma ry j u d g me n tt o d e f e n d a n tFo r d M o t o rCo mp a n y . W e a f f i rm. 

# FI LED

DE C 19 2011 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALS- 2-

I . CL RA Cl a i ms P l a i nt i f f s ’ c l a i m unde rthe C ons um e r s L e ga l R e m e di e s A c ti s ba s e d on the f a i l ur e of F or d t o di s c l os e the r i s k tha ti gni t i on l oc ks i n i t s F oc us ve hi c l e s f r om m o d e l y e a r s 2 0 0 0 th r o u g h 2 0 0 6 w o u ld f a il a f te rth e w a rr a n ty e x p ir e d . A m anufacturerca nn otbe foun d l i abl e und erthe C L R A for f ai l ure t o d i sc l ose a defe ctthatm ani fe st s i t se l f a ft erexpi ra t i on of the w arra nty per i od un l es s s uch om i s s i on ( 1) i s “ c ontr a ry t o a r e pr e s e nt a t i on a c tua l l y m a de by the de f e nda nt ” or( 2) pert ai ns t o a “ fa ctthe defendantw as ob l i gat ed t o d i sc l ose. ” Da u g h e r t y v . A m. H on da Mot or C o. , Inc. , 5 1 C a l . R p tr . 3 d 1 1 8 , 1 2 6 ( C a l . C t . Ap p . 2 0 0 6 ) . As pl a i nt i f f s do nota l l e ge tha tF or d m a de a f f i rm a t i ve r e pr e s e nt a t i ons c onc e rni ng the ig n itio n lo c k s , th e p a r tie s a g r e e th a t p la in tif f s c a n n o t p r e v a il ab s e n t ad u ty to d is c lo s e b y F o r d . U n d e rC a lif

o rn ia ’s g e n e r a l la w o f

f r a u d , a d u ty to d is c lo s e m a y a r is e , i nt er a lia , w h e n th e d e f

e n d a n t h a d e x c lu s iv e k n o w le d g e o f m a te r ia l f

a c ts n o t k n o w n to the pl a i nt i f

f orw he n the de f

e nda nta c t i ve l y c onc e a l s a m a t e r i a l f a c tf r om the p la in tif f . Se e L i m andr iv . J

udki ns , 60 C al . R ptr. 2d 53 9, 54 3 (C al . C t . A pp . 19 97 ). T h is ap p e a l la r g e ly c e n te r s o n th e q u e s tio n o f w h e th e rC a lif

o rn iala w c r e a te s a d u ty t o di s c l os e non- s a f

e ty r e l a t e d de f

e c t s tha tm a ni f

e s tonl y a f

t e rthe w a rr a nty pe r i od, abse ntany a ff

i rm at i ve re pres ent at i on s r egar di ng tho se defe ct s by the m anufacturer .- 3-

W e a gree w i th the di stri ctcourtthat , un der D a u g h e r ty , w h e r e a p la in tif f’s c la im is p re d icated o n a m an u fa ctu re r’s f ailu re to in fo rm it s c u sto m er s o f a p ro d u ct’s l i kel i ho od of fa i l i ng ou t si de the w arra nty per i od , the ri sk po se d b y s uch ass ert ed d efectcan n o tb e m erel y th e eco n o m i c co sto f th e p ro d u ct ’ s rep ai r b u tm u st c ons t i tut e a s a f

e ty c onc e rn. 51 C a l . R ptr . 3d a t127- 128. P l ai nt i ff s a rgue thatthe di stri ctcourterre d b y dec i di ng thatthe i gn i t i on -l ock de f e c tdi d notpos e a s a f

e ty r i s k a s a m a tt e rof

l a w . S pe c i f

i c a l l y , pl a i nt i f

f s c ont e nd thatthe fa i l ure r at e of the F ocus i gn i t i on l ocks w as re l at ed t o saf ety bec ause a de f e c t i ve l oc k m a y pr e ve ntthe dr i ve rf r om s t a r t i ng the e ngi ne , the r e by l e a vi ng the dri ver s tra nd ed on the roadw ay , or m aypreventthe engi ng fr om bei ng shutoff,P la in tif f s a ls o ap p e a l tw o r e la te d e v id e n tia ry ru lin g s b y th e d is tr ic t c o u r t. 1 F i rs t , pl ai nt i ff

s app ea l the di stri ctcourt ’ s c on si dera t i on , ov erobj ec t i on , of an af fi davi tsubm i tt ed by F ord from P aul T ay l or, P h. D , an experti n m ec hani ca l e n g in e e r in g . D r . T a y lo ro p in e d th a t th e ig n itio n lo c k d e f e c t a t is s u e c o u ld n o t r e s u lt i n a n i nabi l i ty t o turn of f the e ngi ne . W e c onc l ude tha tthe di s tr i c tc our tdi d not ab u s e its d is c r e tio n in f

in d in g th a t D r . T a y lo r ’s o p in io n w a s th e p r o d u c t o f r e liab le p r in c ip le s a n d m e th o d s . See D au bert v. Merre l l

D ow P ha rm . , Inc. , 509 U . S . 579, 593- 94 ( 1993) . S e c ond, pl a i nt i f f s a r gue tha tthe di s tr i c tc our tabus e d i t s di s c r e t i on b y r ef u sin g to ad m itre co rd s f ro m F o rd ’s A W S w ar ra n ty d atab as e a n d F o rd ’s C ust om erQ ual i ty I nd i ca t or S ys t em base d o n a det erm i nat i on thatthey w er e i nadm i ss i bl e hea rs ay . B ec ause pl ai nt i ff s do n otdi sput e thatthese re cords w er e he a r s a y a nd of

f e runpe r s ua s i ve a r gum e nt s a s t o w hy the y f a l l unde ra n e xc e pt i on, w e c on cl ud e thatthe di stri ctcourtdi d n otabuse i t s di sc re t i on i n rul i ng them in a d m is s ib le . F u r th e r , g iv e n th e ap p a r e n t u n r e liab ility o f th e r e c o r d s in d e m o n s tr a tin g ig n itio n lo c k - f a ilu r e s , th e p la in tif

f s w e r e n o t p r e

ju d ic e d b y th is de c i s i on.

- 4- re nd er i ng the vehi cl e vul nerabl e t o run aw ayor theft . W e a gree w i th the di stri ct 1 co u rtth atth e “ safety” co n cern s rai sed b y p l ai n t i ffs w ere t o o sp ecu l at i v e, as a m a tte ro f la w , to a m o u n t to a s a f e ty is s u e g iv in g r is e to a d u ty o f d is c lo s u r e . W e affi rm th e g ran to f su m m ary j u d g m en to n th e C L R A cl ai m s. I I . F r a u d u l e n t Co n c e a l me n t Cl a i ms C om m on l a w f

r a udul e ntc onc e a l m e ntunde rC a l i f orni a l a w r e qui r e s tha t“ the defe nd antm usthave been un der adu ty t o d i sc l ose s om e f ac tt o the pl ai nt i ff

. ” H ahn v . Mi r da , 54 C al . R ptr. 3d 52 7, 53 0 (C al . C t . A pp . 20 07 ). B ec ause F ord w as un der no duty t o di s c l os e the f a i l ur e r a t e of

the i gni t i on l oc ks i n the F oc us , w e a f f i rm the di s tr i c tc our t ’ s gr a ntof

s um m a ry j udgm e nton thi s gr ound.- 5-

I I I . Un c o n s c i o n a b l e W a r r a n t y Cl a i ms S m i th argues thatF ord’ s s t andard three -y ea r, 36 , 00 0 m i l e w arra nty w as unc ons c i onabl e be c a us e i tw a s non- ne got i abl e a nd c ont a i ne d dur a t i ona l l i m i t a t i ons th atF o rd en fo rced w i th resp ectt o th e k n o w n l at en td efecti n th e i g n i t i o n l o ck s. U nde rC a l i f

orni a l a w , unc ons c i onabi l i ty i nc l ude s both a pr oc e dur a l a nd s ubs t a nt i ve e le m e n t. A r o n v . U

- H a u l C o . o f C a l. , 49 C a l . R ptr . 3d 555, 564 ( C a l . C t . A pp. 20 06 ). W hi l e C a l i f

orni a c our t s ha ve r e

j e c t e d the not i on tha t“ the a va i l abi l i ty i n the m ark etp l ace o f su b st i tu t e em p l o ym en t , g o o d s, o r serv i ces alone c a n d e f e a t ac la im of procedural un consci on abi l i ty, ” N agr am pa v . M ai lc oups , I

nc , 469 F . 3d 1257, 12 83 (9th C i r. 20 06 ), the exi st ence of m e ani ngf ul s u b s titu te s c a n . Se e , e . g. , D e an W i t ter R eyn o ld

s, In c. v. Su

p eri o r C o u rt , 259 C a l . R ptr . 789, 796- 97 ( C a l . C t . A pp. 1989) ( not i ng tha t“ e ve n though a c ontr a c tm a y be a dhe s i ve , the e xi s t e nc e of

‘ m ea ni ng ful ’ al t ernat i ves a vai l abl e t o such con tra ct i ng party i n the form of other source of supp l y t ends t o d ef ea tany c l ai m of un consci on abi l i ty” ). S m i th w as pr e s e nt e d w i th a m e a ni ngf ul c hoi c e , notj us tthe opt i on of pur c ha s i ng a di f

f e r e nt ve hi c l e f r om a di f f e r e ntm a nuf

a c tur e r , buta l s o the opt i on of pur c ha s i ng a di f

f e r e nt w arra nty w i th an ext ended d urat i on al l i m i tfr om F ord. W e a gree w i th the di stri ct c o u r t th a t S m ith f

a ile d to p r o v id e s u f

f ic ie n t e v id e n c e to s u p p o r t af in d in g in h is- 6-

f a vorr e ga r di ng pr oc e dur a l unc ons c i onabi l i ty . F ur the r , be c a us e F or d w a s unde rno duty t o di s c l os e the f

a i l ur e r a t e of

the i gni t i on l oc ks , a nd S m i th ha s of f e r e d no e v id e n c e th a t F o r d ’s w a rr a n ty c r e a te d “o v e r ly h a r s h o ro n e - s id e d r e s u lts a s to shock the consci ence , ” A r on , 49 C al . R ptr. 3d at56 4 (i nt ernal ci t at i on s om i tt ed), w e a ff irm th e d istrict co u rt’s fin d in g re g ar d in g th e u n co n sc io n ab il ity o f F o rd ’s w arran ty. I V . S e c r e t W a r r a n t y L a w Cl a i ms C a lif o rn ia ’s S e c r e t W a rr a n ty L a w p r o v id e s th a t: [ a ] m a nuf

a c tur e rs ha l l , w i thi n 90 da ys of the a dopt i on of

a n a dj us tm e ntpr ogr a m , s ubj e c tt o p ri o ri ty f or s a f e ty o re m is s io n - r e la te d r e c a lls , n o tif y b y f ir s t- c la s s m a il a l l ow ne r s orl e s s e e s of m ot or v eh i cl e s e l i gi bl e unde rthe prog ra m of the co nd i t i on gi vi ng ri se t o and the pri nci pal t e r m s a n d c o n d i t i o n s o f t h e p r o g r a m . C al . C i v . C o d e § 1 7 9 5 . 9 2 (a). A n “ ad j u stm en tp ro g ram ” i s d efi n ed as fo l l o w s: a ny pr ogr a m orpol i c y t h at expa nds ore xt e nds the consum er ’ s w arra nty b ey on d i t s s t at ed l i m i tor un der w hi ch a m an u fa c tu rer o ffers t o p ay fo r al l o r an y p arto f th e co st of re p airing , or t o rei m bu rs e c on sum er s f or al l or any part of th e co st of re pai ri ng , any c on di t i on thatm ay s ubs t an t i a l l y a f

f e c tve hi c l e dur abi l i ty , r e l i abi l i ty , or pe r f orm a nc e , othe rtha n s e rvi c e pr ovi de d unde ra s a f e ty or e m i ssi o n -rel a t e d r e c a l l c a m p a i gn.- 7-

C al . C i v. C od e § 17 95 . 90 (d). T he l aw further provi des thatan adj ustm entprog ra m

“ d o es n o ti n cl u d e ad h o c ad j u stm en t s m ad e b y a m an u factu rer o n a case-b y-case basi s. ” I d. W e a gr e e w i th the di s tr i c tc our ttha tpl a i nt i f f s f a i l e d t o of

f e rs uf f i c i e nt e v id e n c e to s u p p o r t af

in d in g th a t F o r d ’s A f

te r - W a rr a n ty A s s is ta n c e p r o g r a m f e ll w i thi n the st atut ory e xcept i on for “ ad ho c” adj ustm ent s. P l ai nt i ff s’ al l egat i on that the pr ogr a m w a s a n “ a dj us tm e ntpr ogr a m , ” a s appl i e d t o i gni t i on l oc ks i n the F oc us , boi l e d dow n t o the f a c ttha tF or d ha d r e pl a c e d m or e tha n 16, 000 F oc us i gni t i on l oc ks unde rthe pr ogr a m by the e nd of 2008. A c c or di ng t o pl a i nt i f f s , the sh eer n u m b er o f rep ai rs i n d i cat ed th atth i s w as m o re th an an “ ad h o c” p o l i cy. H ow e ve r , F or d’ s i nt e rna l m a t e r i a l s e m pha s i z e d tha tr e pa i rde c i s i ons w e r e t o be m a de on a c a s e - by - c a s e ba s i s , di d notr e f e r e nc e i gni t i on l oc ks s pe c i f i c a l l y , a nd offe re d o nl y vague gu i del i nes, such as w hether there w as a pot ent i al for acust om er r e la tio n s im p a c t. P l a i nt i f f s di d notc a rry the i rbur de n i n s how i ng tha tthe r e w a s a ge nui ne i ss ue of m at er i al fa ctas t o w hether F ord’ s program w as i n v i ol at i on of the S ec re t Wa rr a n ty L a w. V . UC L Cl a i ms- 8-

T he C al i forni a U nfai r C om pet i t i on L aw proh i bi t s busi ness ac t s or pra ct i ce s th a t a r e ( 1 ) f

r a u d u le n t, ( 2 ) u n f

a ir , o r( 3 ) u n la w f

u l. See C a l . B us . & P r of . C ode § 1 7 2 0 0 ; s e e a ls o D a u g h e r ty , 5 1 C al. Rp tr. 3 d at 1 2 8 . W e a ff irm th e d istrict co u rt’s g ran to f su m m ary j u d g em en ti n fav o r o f F o rd o n al l th ree p ro n g s. T o pr e va i l on a c l a i m unde rthe f r a udul e ntc onduc tpr ong of the U C L , the pl a i nt i f f m us ts how tha t“ m e m be r s of the publ i c a r e l i ke l y t o be de c e i ve d” by the a lle g e d p r a c tic e s . B ar di n v . D ai m l e r Chr ys l e rC or p. , 3 9 C a l. R p tr . 3 d 6 3 4 , 6 4 7 ( C a l. C t. A p p . 2 0 0 6 ) ; s e e a ls o D a u g h e r ty , 51 C a l . R ptr . 3d a t128. W he n de a l i ng w i th a c om pl e x m e c ha ni c a l s y s t e m s ol d unde rw a rr a nty , s uc h a s a ve hi c l e , the e xpe c t a t i on o f th e r e a s o n ab le c o n s u m e rr e g a r d in g th e lif e s p a n o f a n in d iv id u a l c o m p o n e n t is th a t it w ill f

u n c tio n p r o p e r ly f

o rth e le n g th o f

th e e x p r e s s w a rr a n ty . Se e D a u g h e r ty , 5 1 C a l. R p tr . 3 d a t 1 2 8 - 2 9 . P la in tif f s f a ile d to p r o v id e s u f

f ic ie n t e v id e n c e to s uppor ta de c i s i on i n the i rf a voron the f

r a udul e ntc onduc tpr ong. A n a c t o rp r a c tic e is u n f a iru n d e rth e U C L “if

th e c o n s u m e rin

ju ry is s u b s ta n tia l, is n o t o u tw e ig h e d b y a n y c o u n te rv a ilin g b e n e f its to c o n s u m e r s o rto c om pe t i t i on, a nd i s nota n i nj ury the c ons um e r s the m s e l ve s c oul d r e a s onabl y ha ve avoi ded. ” I

d. a t129 ( c i t i ng C a m a c h o v . A u to . C lu b o f S. C a l. , 48 C a l . R ptr . 3d 770, 77 7 (C al . C t . A pp . 20 06 )) . F urther:

th e f a ilu r e to d is c lo s e a d e f e c t th a t m ig h t, o rm ig h t n o t,- 9- short en the ef

fe ct i ve l i fe span of an aut om ob i le partthat f u n c tio n s p r e c is e ly a s w a rr a n te d th r o u g h o u t th e te rm o f its e xp ress w a rr a nty c a nnotbe c ha r a c t e r i z e d a s c a us i ng a s ubs t a nt i a l i nj ury t o c ons um e r s , a nd a c c or di ngl y doe s not c o n s t i t u t e a n u n f

a i r p r a c t i c e un de r t h e UCL. I d. a t130. H e r e , j us ta s the i nj ury i n D a u g h e r ty w a s d e e m e d to n o t b e s u b s ta n tia l, the i nc r e a s e d f

a i l ur e r a t e of

the i gni t i on l oc ks i n the F oc us a f t e rthe w a rr a nty pe r i od w a s nots ubs t a nt i a l a nd F or d’ s pr a c t i c e s di d notr e pr e s e ntunf a i rc onduc tunde rthe UCL. T h e u n la w f

u l c o n d u c t p r o n g o f

th e U C L is d e r iv a tiv e o f o th e rC a lif

o rn ia l aw s, i ncl ud i ng the C L R A , com m on l aw fr audu l entconceal m ent , and the S ec re t W a rr a nty L a w . A s di s c us s e d, pl a i nt i f f s f a i l e d t o c a rry the i rbur de n a s t o a ny of th e s e c l a i ms . As s u c h , th e r e wa s n o v i o l a t i o n u n d e rth e u n l a wf u l p r o n g o f

th e UCL. V I . U n j u s t E n r ic h m e n t C la im P l a i nt i f f s a l s o appe a l the di s tr i c tc our t ’ s rul i ng tha tunj us te nr i c hm e nti s not a n in d e p e n d e n t c a u s e o f a c tio n in C a lif

o rn ia . T h is a r g u m e n t h a s n o m e r it. Joga niv. Su p eri o r C o u rt , 8 1 C a l. R p tr . 3 d 5 0 3 , 5 1 1 ( C a l. C t. A p p . 2 0 0 8 ) ; Melchi or v. N ew L i ne P r ods . , I

nc ., 1 3 1 C a l. Rp tr . 2 d 3 4 7 , 3 5 7 ( C a l. C t. A p p . 2 0 0 3 ) ) ; se e a l so O e s tr e i c he rv . A l i e nw ar e C or p. , 544 F . S upp. 2d 964, 975 ( N . D . C a l . 2008) ( di s m i s s i ng unj us te nr i c hm e ntc l a i m be c a us e i tha d no ba s i s a f t e rpl a i nt i f

f s ’ s f r a udb a s e d c la im s w e r e d is m is s e d ) ; B e r e n b la t v . Ap p le , I n c ., 2009 W L 2591366, a t*6- 10-

( N .D . C a l. 2 0 0 9 ) ( “[ A ] c la im f o ru n ju s t e n r ic h m e n t c a n n o t s ta n d a lo n e w ith o u t a c ogni z abl e c l a i m unde ra qua s i - c ontr a c tua l the ory ors om e othe rf or m of m i sc on du ct . ”) . V II . M oti on to C er ti fy Q u es ti on s t o th e C al i forn i a S u p re m e C ou rt P l ai nt i ff s’ m ot i on t o cert i fyqu es t i on s t o the C al i forni a S up re m e C ou rt i s de ni e d. A s di s c us s e d above , s uf f i c i e ntc ontr ol l i ng pr e c e de nte xi s t s f r om the C a l i f orni a appe l l a t e c our t s t o a ddr e s s the que s t i ons pos e d, a nd the r e i s no i n d i cat i o n th atth e C al i fo rn i a S u p rem e C o u rtw o u l d d eci d e th ese i ssu es d i fferen t l y. See C a l. R u le s o f

C o u r t 8 .5 4 8 ; B i l l

s v . U . S. F i d. & G uar . C o. , 280 F . 3d 1231, 1237 n. 1 ( 9th C i r . 2002) ( “ [ A ] f e de r a l c our ti s obl i ga t e d t o f ol l ow the de c i s i ons of

the s t a t e ’ s i nt e rm e di a t e appe l l a t e c our t s w he r e the r e i s no c onvi nc i ng e vi de nc e tha tthe st at e s up re m e c ou rtw ou l d d ec i de di ff er ent l y. ”) . AF F I RME D.