Source: http://www.impactlitigation.com/2018/03/
Timestamp: 2019-04-19 17:24:53+00:00

Document:
In Williams v. Yamaha Motor Co., the Ninth Circuit held that an alleged defect that results in “premature” failure of vehicle component cannot create a safety issue that is “unreasonable” and thus does not trigger a duty to disclose under California’s Unfair Competition Law (“UCL”) and Consumers Legal Remedies Act (“CLRA”)—at least, this is how defendants interpret Williams. No. 15-55924, 851 F.3d 1015 (9th Cir. 2017) (slip op. available here). In Williams, the consumer plaintiffs asserted claims that their Yamaha boat engines contained a design defect that resulted in severe corrosion, which could cause a sudden loss of steering control. In affirming an order granting the motion to dismiss, the Ninth Circuit noted that the liability standard is an “unreasonable safety risk,” not just any safety risk, and that a defect premised on “accelerated timing” of a failure, rather than a “wholly abnormal” condition that a consumer would never expect, cannot give rise to duty to disclose. Id. at 24. Predictably, since Williams issued, defendants in car cases have attempted to leverage Williams to argue that plaintiffs’ defect claims are simply “premature” failures of vehicle components and therefore not actionable.
However, Williams does not support these defendants’ attempts at extending Williams for several reasons. First, in Williams, the plaintiffs admitted that it was “normal and expected” that the boat engines would suffer from some corrosion or wear out at some point. Slip op. at 23. The court noted that the plaintiffs’ “’own characterization of the defect’ was that it “merely accelerated the normal and expected process of corrosion” and absent the defect, there was no allegation that corrosion would not occur.” Id. The panel reasoned that, were it to conclude that plaintiffs’ allegations of premature, but otherwise normal, wear and tear, plausibly establish an unreasonable safety hazard, the court would effectively open the door to claims that all of Yamaha’s motors eventually pose an unreasonable safety hazard. Thus, the first practice tip for plaintiffs is to not allege or acknowledge (or even bring an action) that the claimed defect is “normal or expected” or the result of typical “wear and tear.” Indeed, the crux of a failure to disclose action is that the vehicle component is defectively designed and would not fail prematurely absent the design defect, irrespective of wear and tear.
Second, Williams simply does not apply where plaintiffs properly allege that the vehicle component is defectively designed, as opposed to the acceleration of a normal condition. A consumer class action plaintiff should emphasize that her case is unequivocally not about premature wear, but rather is about an abnormal condition caused by a design defect: car components that otherwise should function properly, but fail specifically due to a defect in their design. Borkman, et al. v. BMW of North Am., LLC is instructive in discerning between an alleged defect based on normal wear and tear, and the Borkman plaintiffs’ contention that the component was defective in design. 2017 WL 4082420 *7 (C.D. Cal. Aug. 28, 2017) (Mr. Borkman was represented by Capstone Law APC). In Borkman, the plaintiffs alleged that certain vehicles contained a “design or manufacturing defect that causes the oil filter housing gaskets to prematurely break.” 2017 WL 4082420 at *1. The gaskets were allegedly defective because they were composed of a material that was “prone to premature wear and deterioration” when exposed to heat. Id. Citing Williams, BMW argued that the allegations were based on normal wear and tear that happened to occur prematurely, and thus the plaintiffs failed to establish a safety risk. Rejecting BMW’s argument, the court distinguished Williams because the plaintiffs alleged that the parts at issue were themselves defective, stating, “[h]ere, plaintiff does not allege that the [defect] merely accelerated the normal and expected process of cracking and breaking gaskets. Rather, plaintiff alleges that the oil filter housing units and its gaskets are defective due to their proximity to engine heat sources . . . .” Id. at 7. In Keegan v. American Honda Motor Co., Inc., decided prior to Williams, the district court made a similar determination, finding that “[w]hile tires must be replaced periodically . . ., [the rear suspension] is neither a maintenance item nor a part whose defect would be open and obvious to the regular driver. Moreover, the mere fact that a tire is a maintenance item does not foreclose the possibility that there are safety concerns with the class vehicles.” 838 F. Supp. 2d 929, 942 (C.D. Cal. 2012).
Third, the Court’s holding in Williams can be avoided entirely where the alleged defect arose during the warranty period. Courts have confirmed that plaintiffs are not required to plead or prove an “unreasonable safety defect” where a defect arises during the warranty period. See Salas v. Toyota Motor Sales, U.S.A., Inc., No. 15-CV-8629, 2016 WL 7486600 *8 (C.D. Cal. Sept. 27, 2016), and Salas v. Toyota Motor Sales, U.S.A., Inc., No. 15-CV-8629, Dkt. No. 81, n.8 (C.D. Cal. Sept. 27, 2017) (finding Williams does not hold that a safety-related defect is required for defects that manifest during the warranty period).
Finally, a California Court of Appeal decision calls into question whether a safety concern is even required at all to trigger a duty to disclose. In Rutledge v. Hewlett-Packard Co., 238 Cal. App. 4th 1164 (2015), as modified on denial of reh’g (Aug. 21, 2015), review denied (Nov. 10, 2015), the court held that a duty to disclose material information exists regardless of a safety concern. The court rejected defendant’s argument that “manufacturers do not have an independent duty to disclose a product defect absent an unreasonable risk of physical injury or other safety concern” and confirmed that a duty to disclose material information exists regardless of a safety concern. Rutledge, 238 Cal. App. 4th at 1173-74. Rutledge explained further that a manufacturer has “a duty to disclose a material defect in it product” where the allegedly defective component “is central and necessary” to the product’s function. Id. at 1174-1175.
Plaintiffs who allege failures to disclose design defects in car cases should bear in mind these pleading tips to avoid the Ninth Circuit’s Williams decision.

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