Hellman v. Polaris Industries, Inc. ( 2022 )

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 9 MICHAEL HELLMAN, individually on No. 2:21-cv-00949-JAM-DMC behalf of himself and all others 10 similarly situated; FRANCISCO BERLANGA, individually on behalf 11 of himself and all others ORDER GRANTING IN PART AND similarly situated; TIM ARTOFF, DENYING IN PART DEFENDANTS’ 12 individually on behalf of MOTION TO DISMISS himself and all others similarly 13 situated; CY MITCHELL, individually on behalf of 14 himself and all others similarly situated; and JONATHAN LOLLAR, 15 individually on behalf of himself and all others similarly 16 situated, 17 Plaintiffs, 18 v. 19 POLARIS INDUSTRIES, INC., a Delaware Corporation, et. al. 20 Defendants. 21 22 Plaintiffs Michael Hellman, Francisco Berlanga, Tim Artoff, 23 Cy Mitchell and Jonathan Lollar, each representing themselves 24 individually on behalf of himself and all others similarly 25 situated, sued Polaris Industries, Inc., a Delaware corporation, 26 Polaris Sales, Inc., a Minnesota corporation, and Polaris 27 Industries, Inc. a Minnesota corporation (“Defendants” or 28 “Polaris”) for six claims: (1) violation of the California 1 Consumer Legal Remedies Act, (2) violation of the California 2 Unfair Competition Law, (3) violation of the California False 3 Advertising Law, (4) violation of the Oregon Unlawful Trade 4 Practices Act, (5) violation of the Nevada Deceptive Trade 5 Practices Act, and (6) violation of the Texas Deceptive Trade 6 Practices Act. See First Amended Complaint (“FAC”), ECF No. 22. 7 Defendants move to dismiss Plaintiffs’ fourth, fifth, and 8 sixth claims under Oregon, Nevada, and Texas law for lack of 9 personal jurisdiction under Federal Rule of Civil Procedure 10 12(b)(2). See Mot. to Dismiss (“Mot.”), ECF No. 23. Defendants 11 also move to dismiss Plaintiffs’ first, second, and third claims 12 under California law to the extent they seek equitable relief for 13 failure to state a claim upon which relief may be granted under 14 Federal Rule of Civil Procedure 12(b)(6). See Mot. at 7-11. 15 Plaintiffs oppose the motion. See Opp’n, ECF No. 28. 16 Defendants replied. See Reply, ECF No. 29. For the reasons set 17 forth below, the Court GRANTS in part and DENIES in part 18 Defendants’ motion to dismiss.1 19 I. BACKGROUND 20 Polaris manufactures and markets various models of off-road 21 vehicles known generally as utility terrain vehicles or UTVs. 22 FAC ¶ 1. Each Polaris UTV model allegedly has a sticker that 23 states the vehicle’s rollover protection system (“ROPS”) complies 24 with the Department of Occupational Safety and Health 25 Administration (“OSHA”) requirements under 29 C.F.R. § 1928.53. 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for November 2, 2021. 1 Id. ¶ 3. Plaintiffs allege that Polaris’s ROPS testing method 2 does not satisfy OSHA’s requirements and that its sticker claim 3 is false. Id. ¶¶ 5, 41. Plaintiffs allege they each saw and 4 relied upon Polaris’ sticker claim when they purchased their 5 Polaris UTV. Id. ¶¶ 54, 60, 65, 70, 76. Plaintiffs each further 6 allege that “[i]f the sticker said that the ROPS structure failed 7 to meet OSHA requirements, he would not have purchased [the 8 vehicle].” Id. ¶¶ 54, 60, 65, 70, 76. Plaintiffs now bring 9 consumer protection claims under the laws of the state where they 10 reside and seek to certify class actions for consumers harmed in 11 California, Nevada, Oregon, or Texas. Id. ¶¶ 82-86, 115-120, 12 136-137, 163-165, 182-186, 199-204, 218-222. 13 II. OPINION 14 A. Personal Jurisdiction under 12(b)(2) 15 Defendants moves to dismiss Plaintiffs’ fourth, fifth, and 16 sixth claims for lack of personal jurisdiction under Federal 17 Rule of Civil Procedure 12(b)(2). Mot. at 3-7. 18 1. Legal Standard 19 A party may move to dismiss a suit for lack of personal 20 jurisdiction under Rule 12(b)(2). To defeat a Rule 12(b)(2) 21 motion, the plaintiff must make a prima facie showing of 22 jurisdictional facts sufficient to establish that jurisdiction 23 is proper. Mavrix Photo, Inc. v. Brand Tech., Inc. 647 F.3d 24 1218, 1223 (9th Cir. 2011). Here, where there is no applicable 25 federal statute governing personal jurisdiction, the Court 26 applies the law of California. Id. Because California’s long- 27 arm statute is coextensive with federal due process 28 requirements, the jurisdictional analysis under state law and 1 federal due process are the same. Id. (citing Cal. Civ. Proc. 2 Code § 410.10). For this Court to exercise personal 3 jurisdiction consistent with due process, the defendant must 4 have “minimum contacts” with this forum “such that the 5 maintenance of the suit does not offend ‘traditional notions of 6 fair play and substantial justice.’” Int’l Shoe Co. v. 7 Washington, 326 U.S. 310, 316 (1945) (internal citations 8 omitted). A court may exercise either general or specific 9 jurisdiction over a defendant. Goodyear Dunlop Tires 10 Operations, S.A. v. Brown, 564 U.S. 915, 919-20 (2011). 11 2. General Jurisdiction Analysis 12 A court has general jurisdiction over a party whose 13 “continuous operations within a state [are] so substantial and 14 of such a nature as to justify a suit against it on causes of 15 action arising from dealings entirely distinct from those 16 activities.” Int’l Shoe Co., 326 U.S. at 318. This is a very 17 exacting standard that requires Defendant’s activities in 18 California be “so continuous and systematic as to render [it] 19 essentially at home” in the state. Goodyear Dunlop Tires, 564 20 U.S. at 919. Generally, a corporate defendant is “at home” in 21 California in three situations: (1) It is incorporated in the 22 state, (2) it has its principal place of business in the state, 23 or (3) it has “continuous and systematic contacts” with the 24 state. Daimler AG v. Bauman, 571 U.S. 117, 137 (2014). 25 Defendants argue that they are not subject to general 26 jurisdiction in California. Mot. at 3. Defendants are 27 incorporated in either Delaware or Minnesota, and all three 28 Defendants have their principal place of business in Minnesota. 1 Mot. at 4; see also FAC ¶¶ 23-25. Further, Defendants deny that 2 they have continuous and systematic contacts with the state of 3 California. Mot. at 4. Although, Plaintiffs allege Defendants 4 pursued activities in California, including “ maintain[ing] 5 their largest and [sic] distribution center facility in 6 California,” Plaintiffs do not address Defendant’s general 7 personal jurisdiction argument in their opposition. FAC ¶ 26; 8 Opp’n at 6-8. Because Plaintiffs do not oppose Defendants’ 9 argument that the Court lacks general jurisdiction, Plaintiffs 10 waive this argument. See Resnick v. Hyundai Motor America, 11 Inc., No. CV 16-00593-BRO (PJWx), 2017 WL 1531192 at *22, (C.D. 12 Cal. Apr. 13, 2017) (“Failure to oppose an argument raised in a 13 motion to dismiss constitutes waiver of that argument”). 14 Accordingly, the Court does not find general jurisdiction exists 15 over Defendants. 16 3. Specific Jurisdiction Analysis 17 Specific jurisdiction “depends on an affiliation between 18 the forum and the underlying controversy, principally, activity 19 or an occurrence that takes place in the forum State and is 20 therefore subject to the State’s regulation.” Goodyear Dunlop 21 Tires, 564 U.S. at 919. The Ninth Circuit uses a three-prong 22 test for analyzing claims of specific jurisdiction. 23 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th 24 Cir. 2004). First, the nonresident defendant “must purposefully 25 direct its activities or consummate some transaction with the 26 forum or resident thereof, or perform some act by which it 27 purposefully avails itself of the privilege of conducting 28 activities in the forum, thereby invoking the benefits and 1 protections of its laws.” Id. Second, “the claim must be one 2 which arises out of or relates to the defendant’s forum-related 3 activities.” Id. And finally, “the exercise of jurisdiction 4 must comport with fair place and substantial justice such that 5 it is reasonable.” Id. The plaintiffs bear the burden of 6 satisfying the first two prongs of the test. Sher v. Johnson, 7 911 F.2d 1357, 1361 (9th Cir. 1990). If the plaintiffs fail to 8 satisfy either, then personal jurisdiction is not established, 9 and the suit must be dismissed. Schwarzenegger, 374 F.3d at 10 802. 11 Defendants argue that Plaintiffs have failed to satisfy the 12 Ninth Circuit’s three-prong test for specific jurisdiction 13 because their fourth, fifth, and sixth claims do not arise out 14 of or relate to the Defendants’ forum related activities, 15 contrary to the requirements of prong two. Mot. at 7; 16 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d at 802. 17 Plaintiffs’ fourth, fifth, and sixth claims are brought by non- 18 resident plaintiffs who allege facts that occurred outside the 19 state of California. FAC ¶¶ 187, 205, 226. Plaintiffs Artoff 20 (claim four), Mitchell (claim five), and Lollar (claim six) 21 reside in and purchased a Polaris UTV in Oregon, Nevada, and 22 Texas respectively. FAC ¶¶ 187, 205, 226. Further, the FAC 23 does not allege any connection between these nonresident claims 24 and Defendants’ activities in California. See FAC. This 25 omission is fatal to a finding of specific jurisdiction, which 26 requires “an affiliation between the forum and the underlying 27 controversy.” Goodyear Dunlop Tires, 564 U.S. at 919. “When no 28 such connection exists, specific jurisdiction is lacking 1 regardless of the extent of a defendant’s unconnected activities 2 in the State.” Bristol-Myers Squibb Co. v. Superior Ct. of 3 California, San Francisco Cty., 137 S. Ct. 1773, 1776 (2017). 4 Accordingly, Plaintiffs fail to satisfy their burden under the 5 Ninth Circuit test and the Court finds it does not have specific 6 jurisdiction over the nonresident claims. 7 4. Pedant Jurisdiction Analysis 8 Plaintiffs request this Court exercise pendent personal 9 jurisdiction over Defendants for Plaintiffs Artoff, Mitchell, 10 and Lollar’s nonresident claims. “[A] court may assert pendent 11 personal jurisdiction over a defendant with respect to a claim 12 for which there is no independent basis of personal jurisdiction 13 so long as it arises out of a common nucleus of operative facts 14 with a claim in the same suit over which the court does have 15 personal jurisdiction.” Action Embroidery Corp. v. Atl. 16 Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004) (adopting 17 the doctrine of pendent personal jurisdiction). The “exercise 18 of personal pendent jurisdiction in a particular case is within 19 the discretion of the district court”. Id. at 1181. Pendent 20 personal jurisdiction is “typically found where one or more 21 federal claims for which there is nationwide personal 22 jurisdiction are combined in the same suit with one or more 23 state or federal claims for which there is not nationwide 24 personal jurisdiction.” Id. at 1180–81. Plaintiffs do not 25 assert any federal claims here. Further, the Court is 26 unpersuaded by Plaintiffs’ arguments for judicial economy. 27 This Court therefore declines to exercise pendent personal 28 jurisdiction over Defendants for claims four, five, and six. 1 Accordingly, the Court dismisses claims four, five, and six 2 without prejudice for lack of personal jurisdiction. Grigsby v. 3 CMI Corp., 765 F.2d 1369, 1372 n.5 (9th Cir. 1985) (noting that 4 dismissals for lack of personal jurisdiction are to be without 5 prejudice). 6 B. Equitable Restitution and Injunctive Relief Claims 7 Defendants move to dismiss Plaintiffs’ claims for equitable 8 restitution and injunctive relief under California’s Consumer 9 Legal Remedies Act (“CLRA”), Unfair Competition Law (“UCL”) and 10 False Advertising Law (“FAL”). Mot. at 7. Defendants argue 11 that Plaintiffs’ claims for equitable remedies fail under Sonner 12 v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020), 13 because Plaintiffs fail to show they lack an adequate remedy at 14 law. Id. 15 With respect to injunctive relief, this Court, applying 16 Sonner, found that a “plaintiff may pursue her equitable claims 17 for injunctive relief to the extent they are premised on alleged 18 future harm.” Roper v. Big Heart Pet Brands, Inc., 510 F. Supp. 19 3d 903, 918 (E.D. Cal. 2020). In Roper, the plaintiff alleged 20 facts about deceptively labeled dog food that were of 21 “sufficient detail to support, by way of inference, an alleged 22 practice of false advertising with respect to the Products.” 23 Id. This and the plaintiff’s allegation that “she and other 24 future purchasers will continue to be misled” was “sufficient to 25 suggest a likelihood of future harm amendable to injunctive 26 relief.” Id. 27 Here, Plaintiffs have made similar allegations that 28 Defendants made misrepresentations about their UTVs’ compliance 1 with OSHA requirements and that these misrepresentations “will 2 continue to cause irreparable injury to consumers unless 3 enjoined or restrained.” FAC ¶¶ 5, 41, 180. Plaintiffs have 4 also alleged that they are at risk for future harms because they 5 “intend[] to shop for and buy UTVs in the future, including 6 those manufactured by Polaris.” FAC ¶¶ 56, 61. Because 7 monetary damages, Plaintiffs’ remedy at law, are retrospective, 8 they are inadequate to address Plaintiffs’ prospective harms. 9 Zeiger v. WellPet LLC, 526 F. Supp. 3d 652, 687 (N.D. Cal. 10 2021). Accordingly, the Court declines to dismiss Plaintiff’s 11 claims for injunctive relief. 12 With respect equitable restitution, the Court grants 13 Defendants’ motion to dismiss, because Plaintiffs failed to 14 address Defendants’ arguments in opposition. Opp’n at 11-14. 15 Plaintiffs therefore concede Defendants’ arguments with respect 16 to equitable restitution. See Resnick v. Hyundai Motor America, 17 Inc., No. CV 16-00593-BRO (PJWx), 2017 WL 1531192 at *22, (C.D. 18 Cal. Apr. 13, 2017) (“Failure to oppose an argument raised in a 19 motion to dismiss constitutes waiver of that argument”). 20 Accordingly, the Court dismisses Plaintiffs’ claims for 21 equitable restitution under the CLRA, UCL, and FAL with 22 prejudice given further amendment is futile. Deveraturda v. 23 Globe Aviation Sec. Servs., 454 F.3d 1043, 1049 (9th Cir. 2006). 24 III. ORDER 25 For the reasons set forth above, the Court GRANTS in part 26 and DENIES in part Defendants’ Motion to Dismiss. Defendants’ 27 Motion to Dismiss Plaintiff’s Oregon Unlawful Trade Practices 28 Act, Nevada Deceptive Trade Practices Act, and Texas Deceptive em EERE III IE IIE IIE III I EI OS EE IED eee 1 Trade Practices Act is granted WITHOUT PREJUDICE. Defendants’ 2 Motion to Dismiss Plaintiff’s claims for equitable restitution 3 under the CLRA, FAL, and UCL is GRANTED WITH PREJUDICE. The 4 remainder of Defendants’ Motion to Dismiss is DENIED. 5 Defendants’ Answer to the FAC is due twenty (20) days from the 6 | date of this Order. 7 IT IS SO ORDERED. 8 Dated: February 15, 2022 kA 10 teiren staves odermacr 7008 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10