Court Opinion

ID: 2652348
Source: CourtListenerOpinion
Date Created: 2014-02-05 21:03:03.075226+00
Date Added: 2024-06-11T12:54:57.277847
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                              FEB 05 2014

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

TRACY GRAY, individually, and on                 No. 12-55362
behalf of other members of the general
public similarly situated; JAY POST,             D.C. No. 2:08-cv-01690-PSG-
individually, and on behalf of other             VBK
members of the general public similarly
situated,
                                                 MEMORANDUM*
              Plaintiffs - Appellants,

  v.

TOYOTA MOTOR SALES, U.S.A., INC.;
TOYOTA MOTOR NORTH AMERICA,
INC.,

              Defendants - Appellees.

                   Appeal from the United States District Court
                       for the Central District of California
                   Philip S. Gutierrez, District Judge, Presiding

                      Argued and Submitted August 26, 2013
                              Pasadena, California

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: GOULD and RAWLINSON, Circuit Judges, and LEMELLE, District
Judge.**

      Appellants Tracy Gray and Jay Post (collectively “Gray”) appeal the district

court’s grant of Appellees Toyota Motor Sales, U.S.A., Inc. and Toyota Motor

North America, Inc.'s (collectively “Toyota”) Federal Rule of Civil Procedure

12(b)(6) motion dismissing their claims with prejudice. We affirm.

      Dismissal for failure to state a claim under Rule 12(b)(6) is reviewed de

novo. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012). Rule

12(b)(6) permits a complaint to be dismissed for failure to state a claim upon which

relief can be granted. Fed. R. Civ. P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550

U.S. 544, 552 (2007). Courts must consider the complaint in its entirety,

“accepting all factual allegations in the complaint as true and construing them in

the light most favorable to the nonmoving party”. Skilstaf, Inc. v. CVS Caremark

Corp., 669 F.3d 1005, 1014 (9th Cir. 2012). That being said, the “[f]actual

allegations must be enough to raise a right to relief above the speculative level.”

Twombly, 550 U.S. at 555. A plaintiff has an “obligation to provide the grounds of

his entitlement to relief, [and that] requires more than labels and conclusions, and a

formulaic recitation of the elements of a cause of action.” Id. (internal quotations

       **
             The Honorable Ivan L. R. Lemelle, District Judge for the U.S. District
Court for the Eastern District of Louisiana, sitting by designation.
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omitted). Further, dismissal under Rule 12(b)(6) “can be based on the lack of a

cognizable legal theory or the absence of sufficient facts alleged.” UMG

Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1014 (9th Cir.

2013) (internal quotation marks omitted).

      Gray alleges that Toyota's failure to disclose internal fuel economy data for

the Prius Hybrid–which varied from the marketed EPA fuel economy

estimates–violated: (1) California's Unfair Competition Law (UCL), Cal. Bus. &

Prof. Code § 17200; (2) California's Consumer Legal Remedies Act (CLRA), Cal.

Civ. Code § 1750(a) (5), (7); and (3) California's common law fraudulent

concealment laws.

      As the district court correctly held, “[b]ecause [Gray] proceed[s] solely on a

‘pure-omission’ theory of liability, the viability of each of the three causes of

action alleged will turn on whether Toyota owed [Gray] a duty of disclosure.”

Gray v. Toyota Motor Sales, No. CV 08-1690, 2012 WL 313703, at *2 (C.D. Cal.

Jan. 23, 2012). We therefore turn to California law to determine whether Toyota

had a duty to disclose internal fuel economy data that was contrary to EPA

estimates.

      When analyzing a UCL, CLRA, or fraudulent concealment claim, California

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

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unless a safety issue is present or there has been some affirmative

misrepresentation. Daugherty v. Am. Honda Motor Co., Inc., 144 Cal. App. 4th

824, 834-35 (2006); see also Smith v. Ford Motor Co., 749 F. Supp. 2d 980, 988

(N.D. Cal. 2010) (dismissing CLRA claim because claim did not deal with a safety

concern and no affirmative misrepresentation was shown on the part of car

manufacturer). When applied to the fuel economy context, “[a]s a matter of law,

there is nothing false or misleading” about a car manufacturer's advertising that

identifies the EPA fuel economy estimates for the car. Paduano v. Am. Honda

Motor Co., 169 Cal. App. 4th 1453, 1470 (2009). Thus, no misrepresentation

occurs when a manufacturer merely advertises EPA estimates.

      Gray is unable to establish that Toyota violated its duty under California

law. Gray does not allege that this case is governed by an existing warranty or that

any affirmative misrepresentations were made by Toyota. Rather, Gray only

claims that Toyota failed to disclose certain information known to it which

conflicted with EPA estimates. However, under the statutes pled, California law

does not recognize a cause of action for publicizing EPA fuel economy estimates

and omitting further explanation. See Paduano, 169 Cal. App. 4th at 1470.

      Even if California law did allow for suits based on omissions relating to fuel

economy, Toyota marketed the Prius with valid EPA fuel economy estimates along

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with the disclaimer “[a]ctual mileage may vary.” This further emphasizes the fact

that Toyota's marketing was not unfair, likely to deceive, or fraudulent under

California law. Cf. Davis v. HSBC Bank Nev., 691 F.3d 1152, 1169, 1171 (9th Cir.

2012) (affirming dismissal of UCL claim where advertisement included disclaimer

“other restrictions may apply”).1

      AFFIRMED.

      1
        Because we conclude that California law does not support any of the
claims alleged, we need not engage in a choice of law analysis to determine if
California law can be applied to all Class members. See generally, Mazza v. Am.
Honda Motor Co., 666 F.3d 581 (9th Cir. 2012).
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