Court Opinion

ID: 801666
Source: CourtListenerOpinion
Date Created: 2012-06-05 20:11:26+00
Date Added: 2024-06-11T18:00:01.188299
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             JUN 05 2012

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

MARIO CONTRERAS; MADELINE                        No. 10-16556
HUNTER,
                                                 D.C. No. 3:09-cv-06024-JSW
              Plaintiffs - Appellants,

  v.                                             MEMORANDUM *

TOYOTA MOTOR SALES U.S.A. INC.,

              Defendant - Appellee.

                    Appeal from the United States District Court
                       for the Northern District of California
                     Jeffrey S. White, District Judge, Presiding

                    Argued and Submitted September 14, 2011
                            San Francisco, California

Before: THOMAS and N.R. SMITH, Circuit Judges, and OLIVER, Chief District
Judge.**

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9 th Cir. R. 36-3.
       **
             The Honorable Solomon Oliver, Jr., Chief District Judge for the U.S.
District Court for Northern Ohio, sitting by designation.
       Plaintiffs appeal the district court’s dismissal of their complaint pursuant to

Fed. R. Civ. P. 12(b)(1) for lack of standing. We reverse and remand. Because the

parties are familiar with the background of the case, we need not recount it here.

                                            I

       In Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992), the Supreme Court

described the “irreducible constitutional minimum of standing” as consisting of

three criteria:

       First, the plaintiff must have suffered an injury in fact—an invasion of
       a legally protected interest which is (a) concrete and
       particularized . . . , and (b) actual or imminent, not conjectural or
       hypothetical . . . . Second, there must be a causal connection between
       the injury and the conduct complained of—the injury has to be
       fairly . . . trace[able] to the challenged action of the defendant, and not
       . . . th[e] result [of] the independent action of some third party not
       before the court. . . . Third, it must be likely, as opposed to merely
       speculative, that the injury will be redressed by a favorable decision.

Id. at 560–61 (citations and internal quotation marks omitted; some alterations in

the original).

       In this case, the district court correctly concluded that the plaintiffs lacked

standing to bring their claims concerning limitation of the notice of recall to certain

states because they had failed to establish injury-in-fact. When Toyota made the

repair available, free of charge, in both recall and non-recall states, Toyota

effectively eliminated any distinction between the plaintiffs and vehicle owners in

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recall states. Plaintiffs do not allege that Toyota’s repair was ineffective.

Therefore, plaintiffs cannot establish injury-in-fact with regard to Toyota’s

response to the defect, and they lack standing.

      Plaintiffs asserted an alternative theory, namely that they either paid too

much when they bought their vehicles because the vehicles were defective, or that

they would not have purchased the vehicles had they known of the defect.

However, despite the fact that Toyota made a factual challenge to standing,

plaintiffs did not present evidence–even through verified complaint–to establish

injury-in-fact, although it was their burden to establish standing. Oregon v. Legal

Servs. Corp., 552 F.3d 965, 969–70 (9th Cir. 2009); see also Savage v. Glendale

Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). Therefore, the district

court did not err in dismissing the complaint for lack of standing.

                                           II

      The district court erred in declining to grant leave to amend. Courts “should

freely give leave” to amend “when justice so requires,” Fed. R. Civ. P. 15(a)(2).

“‘Dismissal without leave to amend is improper unless it is clear, upon de novo

review, that the complaint could not be saved by any amendment.’” Krainski v.

Nev. ex rel. Bd. of Regents of Nev. Sys. of Higher Educ., 616 F.3d 963, 972 (9th

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Cir. 2010) (quoting Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc., 368 F.3d

1053, 1061 (9th Cir. 2004)).

      Although the unverified complaint was insufficient to overcome Toyota’s

standing challenges, it is not inconceivable that plaintiffs could have amended their

complaint to establish standing through economic harm at the time of purchase or

at the time of resale. See United States v. Students Challenging Regulatory Agency

Procedures (“SCRAP”), 412 U.S. 669 (1973). It is noteworthy that, although

plaintiffs did not submit evidence of such economic harm, directly or through

verified complaint, Toyota did not present any direct evidence to challenge that

theory. Given that an amendment might not be futile, the district court should have

allowed the plaintiffs the opportunity to submit an amended complaint. We do not

prejudge whether the amendment would have been sufficient, we only hold that the

opportunity should have been given.

      Each party should bear its or their own costs.

      AFFIRMED IN PART; REVERSED IN PART; REMANDED.

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