Spencer v. Honda Motor Corp., Ltd. ( 2022 )

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 9 SHAWN SPENCER, individually on No. 2:21-cv-00988-JAM-DMC behalf of himself and all others 10 similarly situated, 11 Plaintiffs, ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ 12 v. MOTION TO DISMISS 13 HONDA MOTOR CORP. LTD., a Japanese Corporation, et. al. 14 Defendants. 15 16 Plaintiff Shawn Spencer, representing himself and all others 17 similarly situated, sues Honda Motor Corporation, a Japanese 18 corporation, and American Honda Motor Company, Inc., a subsidiary 19 headquartered in California, collectively (“Defendants” or 20 “Honda”), for three claims: (1) violation of the California 21 Consumer Legal Remedies Act, (2) violation of the California 22 Unfair Competition Law, and (3) violation of the California False 23 Advertising Law. See Complaint (“Compl.”), ECF No. 1. 24 Defendants move to dismiss all claims for failure to state a 25 claim upon which relief may be granted under Federal Rule of 26 Civil Procedure 12(b)(6). See Motion to Dismiss (“Mot.”), ECF 27 No. 10. Plaintiff opposes the motion. See Opp’n, ECF No. 19. 28 Defendants replied. See Reply, ECF No. 20. For the reasons set 1 forth below, the Court GRANTS in part and DENIES in part 2 Defendants’ motion to dismiss.1 3 I. BACKGROUND 4 Defendants manufacture and market various models of off-road 5 vehicles known generally as utility terrain vehicles (“UTVs”). 6 Compl. ¶ 1. Each Honda UTV model allegedly has a label that 7 states the vehicle’s rollover protection system (“ROPS”) complies 8 with the Department of Occupational Safety and Health 9 Administration’s (“OSHA”) requirements under 29 C.F.R. § 1928.53. 10 Id. ¶¶ 3-5. Plaintiff alleges that, contrary to Defendants’ 11 label claim, Defendants’ testing practices do not comply with 12 OSHA’s requirement. Id. ¶ 37. Plaintiff alleges he saw and 13 relied upon Defendants’ ROPS label when he purchased his UTV. 14 Id. ¶ 45. Plaintiff avers that “[i]f the sticker said that the 15 ROPS structure failed to meet OSHA requirements, he would not 16 have purchased [the vehicle].” Id. Plaintiff thus brings claims 17 for fraud and misrepresentation under California law. Id. ¶¶ 92- 18 93, 99-109, 115-116. 19 II. OPINION 20 A. Judicial Notice 21 Federal Rule of Evidence 201 allows the Court to notice a 22 fact if it is “not subject to reasonable dispute,” such that it 23 is “generally known” or “can be accurately and readily 24 determined from sources whose accuracy cannot reasonably be 25 questioned.” Fed. R. Evid. 201(b). 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 August 23, 2022. 1 Defendants request the Court take judicial notice of a 2 table of vehicle weights published by the United States 3 Department of Energy and a publication by the International 4 Organization for Standardization (“ISO”). See Req. for Judicial 5 Notice, ECF No. 11. The Court grants Defendants’ request for 6 judicial notice. See Pargett v. Wal-Mart Stores., 2020 WL 7 5028317, at *3 (C.D. Cal. Apr. 10, 2020) (taking judicial notice 8 of documents published on the Department of Energy’s website); 9 see also In re Toyota Motor Corp., 785 F. Supp. 2d 883, 901 10 (C.D. Cal. 2011) (taking judicial notice of certain documents 11 published by the ISO, because they “embrace proper subjects of 12 judicial notice”). The Court’s judicial notice, however, 13 extends only to the existence of these documents and not to 14 their substance to the extent it is disputed or irrelevant. Lee 15 v. City of Los Angeles, 250 F.3d 668, 690 (9th Cir. 2001). 16 B. Legal Standard 17 Federal Rule of Civil Procedure 8(a)(2) requires “a short 18 and plain statement of the claim showing that the pleader is 19 entitled to relief.” When a plaintiff fails to “state a claim 20 upon which relief can be granted,” the Court must dismiss the 21 suit. Fed. R. Civ. P. 12(b)(6). To defeat a motion to dismiss, 22 a plaintiff must “plead enough facts to state a claim to relief 23 that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 24 550 U.S. 544, 570 (2007). Plausibility under Twombly requires 25 “factual content that allows the Court to draw a reasonable 26 inference that the defendant is liable for the misconduct 27 alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “At this 28 stage, the Court ‘must accept as true all of the allegations 1 contained in a complaint.’” Id. But it need not “accept as 2 true a legal conclusion couched as a factual allegation.” Id. 3 Here, where Plaintiff alleges claims based in fraud, 4 Plaintiff’s allegations must satisfy the heightened pleading 5 standard of Rule 9(b). Fed. R. Civ. P. 9(b). “To comply with 6 Rule 9(b), allegations of fraud must be specific enough to give 7 defendants notice of the particular misconduct which is alleged 8 to constitute the fraud.” Swartz v. KPMG LLP, 476 F.3d 756, 764 9 (9th Cir. 2007) (internal quotation marks omitted). The 10 “[a]verments of fraud must be accompanied by the who, what, 11 when, where, and how of the misconduct charged.” Kearns v. Ford 12 Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (internal 13 quotation marks omitted). It is not enough to set forth “the 14 neutral facts necessary to identify the transaction. The 15 plaintiff must set forth what is false or misleading about a 16 statement, and why it is false.” Vess v. Ciba-Geigy Corp. USA, 17 317 F.3d 1097, 1106 (9th Cir. 2003). This heightened pleading 18 standard applies to state-law claims sounding in fraud. Vess, 19 317 F.3d at 1103-04. 20 Leave to amend shall be granted, unless the “pleading could 21 not possibly be cured by the allegation of other facts.” Cooks, 22 Perkiss & Leiche, Inc. v. N. Cal. Collection Serv., Inc., 911 23 F.2d 242, 246-47 (9th Cir. 1990). 24 C. Analysis 25 1. Misrepresentation 26 To state a claim under the California’s Consumer Legal 27 Remedies Act (“CLRA”), Unfair Competition Law (“UCL”) and False 28 Advertising Law (“FAL”), a plaintiff must allege that 1 defendant’s purported misrepresentation is likely to deceive a 2 reasonable consumer. See Branca v. Nordstrom, Inc., 2015 3 WL 1841231, at *6 (S.D. Cal. Mar. 20, 2015) (citing Williams v. 4 Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008)). 5 Defendants contend that Plaintiff cannot identify an actionable 6 misrepresentation because, contrary to Plaintiff’s allegations, 7 Defendants complied with OSHA’s requirements at 29 C.F.R. 8 § 1928.53 as a matter of law. 9 Section 1928.53 requires that, when testing a vehicle’s 10 roll-over protection system, the manufacturer use the vehicle’s 11 weight as a variable. §§ 1928.53(d)(2)(ii), (d)(3)(A), and 12 (d)(4)(A). “Weight” is defined at 29 C.F.R § 1928.51(a) as: 13 Tractor weight [that] includes the protective frame or enclosure, all fuels, and other 14 components required for normal use of the tractor. Ballast shall be added as necessary to 15 achieve a minimum total weight of 110 lb. (50.0 kg.) per maximum power take-off horsepower at 16 the rated engine speed or the maximum gross vehicle weight specified by the manufacturer, 17 whichever is the greatest. Front end weight shall be at least 25 percent of the tractor test 18 weight. In case power take-off horsepower is not available, 95 percent of net engine flywheel 19 horsepower shall be used. 20 Plaintiff contends that Defendants used the wrong weight as a 21 matter of fact; Defendants contend that they used the correct 22 weight as a matter of law. Mot. at 7; Opp’n at 12. The crux of 23 their competing views lies in whether the last sentence of this 24 provision, regarding flywheel horsepower, applies to situations 25 where the vehicle in question lacks a power take-off (“PTO”)2. 26 2 “A PTO is a device that transfers power from a vehicle’s engine 27 to a secondary application . . . allowing the secondary application to perform its function without a need for an 28 additional engine to power it.” Mot. at 8, n.1. 1 The Court finds that Plaintiff is correct in that it does. 2 Defendants’ argument that § 1928.53’s testing requirements 3 permit them to use “gross vehicle weight” in all instances when 4 their vehicle lacks a PTO is unpersuasive. Mot. at 9. The 5 statute states that a vehicle’s weight is the greater of two 6 values, either the maximum gross vehicle weight or 110 pounds 7 times the maximum power take-off horsepower at the rated engine 8 speed. § 1928.51(a). When the power take-off is not 9 available, the second value shall be calculated instead as 110 10 pounds times 95 percent of the net engine flywheel horsepower. 11 Id. 12 Vehicle Weight is the Greater of A or B 13 A B 14 Maximum Gross If PTO horsepower is If PTO horsepower is 15 Vehicle Weight available: not available: 16 110 lb. x PTO 110 lb. x .95(Flywheel 17 Horsepower Horsepower) 18 19 When a vehicle lacks a PTO, the value of that vehicle’s PTO 20 horsepower is “not available” within the meaning of the 21 statute, and the flywheel horsepower should be used instead. 22 The Court declines to adopt Defendants’ proposed 23 interpretation that the PTO horsepower of a vehicle without a 24 PTO is “available” within the meaning of the statute merely 25 because the horsepower of a nonexistent engine is logically 26 zero. Mot. at 9. Defendants’ interpretation would render the 27 last sentence of this provision superfluous because, in cases 28 where a PTO is installed, the PTO horsepower would apply, and, 1 in cases where a PTO is not installed, the PTO horsepower would 2 still apply (as zero). This would mean that the flywheel 3 horsepower value would only apply in situations where a PTO is 4 installed but the PTO horsepower is somehow uncalculatable. 5 Mot. at 12. Given that Defendants suggest that PTO horsepower 6 can be calculated even when a PTO does not exist, the Court 7 declines to credit their suggestion that PTO horsepower might 8 be uncalculatable when a PTO does exist. 9 As Defendants noted, the Court “must interpret statutes as 10 a whole, giving effect to each word and making every effort not 11 to interpret a provision in a manner that renders other 12 provisions of the same statute inconsistent, meaningless, or 13 superfluous.” Boise Cascade Corp. v. U.S. E.P.A., 942 F.2d 14 1427, 1432 (9th Cir. 1991). As such, the Court concludes that, 15 in the absence of a PTO, Defendants were required under 16 § 1928.51(a) to compare their vehicle’s gross vehicle weight 17 with 110 pounds times 95 percent of the net engine flywheel 18 horsepower and to use the greater value in their ROPS tests. 19 Plaintiff alleges Defendants failed to do so. Compl. ¶ 37. 20 The Court finds that this allegation is sufficient to state an 21 actionable misrepresentation under the CLRA, UCL, and FAL at 22 this motion to dismiss stage. 23 2. Specific Acts 24 Defendants contend Plaintiff failed to satisfy the 25 specificity requirement of Rule 9(b) because “he lumps AHM and 26 HMC together, without identifying which defendant—AHM or HMC— 27 made the alleged statements.” Mot. at 14. Outside these 28 lumping statements, Defendants argue, “Spencer does not 1 attribute a single statement to HMC.” Id. However, the Ninth 2 Circuit has held “[t]here is no flaw in a pleading . . . where 3 collective allegations are used to describe the actions of 4 multiple defendants who are alleged to have engaged in precisely 5 the same conduct.” United States ex rel. Swoben v. United 6 Healthcare Ins. Co., 848 F.3d 1161 (9th Cir. 2016), 1184. 7 “Plaintiff’s assertion throughout the Complaint [is] that both 8 Honda Motor and American Honda cheated on the ROPS test and 9 misrepresented their UTVs as ROPS compliant.” Opp’n at 13. As 10 such, Plaintiff’s use of “Defendants” or “Honda” to refer to 11 both defendants does not run afoul of the specificity 12 requirements of Rule 9(b). The Court finds that Plaintiff has 13 sufficiently pled specific acts under Rule 9(b) and declines to 14 dismiss his claims for this reason. 15 3. Equitable Restitution and Injunctive Relief 16 Defendants next move to dismiss Plaintiff’s claims for 17 equitable restitution and injunctive relief under the CLRA, UCL, 18 and FAL, arguing that Plaintiff’s claims for equitable remedies 19 fail under Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th 20 Cir. 2020), because Plaintiff fails to show he lacks an adequate 21 remedy at law. 22 With respect to injunctive relief, this Court, applying 23 Sonner, found that a “plaintiff may pursue her equitable claims 24 for injunctive relief to the extent they are premised on alleged 25 future harm.” Roper v. Big Heart Pet Brands, Inc., 510 F. Supp. 26 3d 903, 918 (E.D. Cal. 2020). In Roper, the plaintiff alleged 27 facts about deceptively labeled dog food that were of 28 “sufficient detail to support, by way of inference, an alleged 1 practice of false advertising with respect to the Products.” 2 Id. This and the plaintiff’s allegation that “she and other 3 future purchasers will continue to be misled” was “sufficient to 4 suggest a likelihood of future harm amendable to injunctive 5 relief.” Id. 6 Here, Plaintiff has made similar allegations that 7 Defendants made misrepresentations about their UTVs’ compliance 8 with OSHA requirements and that these misrepresentations “will 9 continue to cause irreparable injury to consumers unless 10 enjoined or restrained.” Compl. ¶ 125. However, Plaintiff has 11 not alleged that he and others are at risk for future harms nor 12 that they intend to shop for or buy UTVs in the future. As 13 such, Plaintiff has not sufficiently pled a prospective harm 14 that would be redressed by an injunction. Accordingly, the 15 Court dismisses Plaintiff’s claims for injunctive relief without 16 prejudice. 17 With respect to equitable restitution, the Court agrees 18 with Defendants that Sonner controls. In Sonner, the Ninth 19 Circuit held that a plaintiff must allege the absence of an 20 adequate legal remedy to obtain equitable relief in a case 21 pending before a federal court. Sonner, 971 F.3d at 840-41. 22 Plaintiff’s complaint states numerous times that he and the 23 putative class “are damaged based on the benefit of the bargain” 24 and “have lost money or property” as a result of Defendants’ 25 alleged misconduct. Compl. ¶¶ 41, 44, 49-50, 92, 107, 123-24. 26 As such, the Court finds that Plaintiff has an adequate remedy 27 at law. The Court dismisses Plaintiff’s request for equitable 28 restitution without prejudice. See Guzman v. Polaris Indus., em EEE IRE I IIE IRIE IIE IE III IIE INE EE ED eee 1} No. 21-55520, 2022 WL 4543709 (9th Cir. Sep. 29, 2022) (holding 2 that dismissal of claims for lack of equitable jurisdiction 3 should be without prejudice). 4 IIl. ORDER 5 For the reasons set forth above, the Court GRANTS in part 6 | and DENIES in part Defendants’ Motion to Dismiss. Defendants’ 7 Motion to Dismiss Plaintiff’s claims for injunctive relief and 8 equitable restitution under the CLRA, FAL, and UCL is GRANTED 9 WITHOUT PREJUDICE. The remainder of Defendants’ Motion to 10 Dismiss is DENIED. If Plaintiff intends to file an amended 11 complaint, he must do so within twenty (20) days of this Order. 12 Defendants’ responsive pleading is due twenty (20) days 13 thereafter. If Plaintiff does not file an amended complaint, the 14 case will proceed on the remaining claims in his complaint. 15 IT IS SO ORDERED. 16 Dated: October 25, 2022 17 cp, JOHN A. MENDEZ 19 SENIOR UNITED*STATES DISTRICT JUDGE 20 21 22 23 24 25 26 27 28 10