Yousif v. Jaguar Land Rover North America, LLC ( 2024 )

FILED SOUTHERN Datnicl OF □□□ IA 5 BY AY DEPUTY 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 || MELINDA YOUSIF, Case No.: 3:21-cv-01232-BEN-DTF = ee, ORDER ON PARTIES’ TRIAL 13 || v. BRIEFS 14 || JAGUAR LAND ROVER NORTH 15 AMERICA, LLC; and DOES 1 through 10, inclusive, 16 Defendants. 17 I. BACKGROUND 18 Plaintiff brings a single claim under the Magnuson-Moss Warranty Act 19 (“MMWA”) against J aguar Land Rover North America (“JLRNA”) for breach of express 20 || and implied warranty. ECF No. 1-3, (“Compl.”). On May 20, 2019, Plaintiff purchased 21 |}a 2019 Land Rover Range Rover Velar (hereinafter, the “Vehicle”). /d. 98. Plaintiff 22 || purchased the Vehicle from a third-party retailer, Sam Jidd Luxury in De Plaines, Illinois. 23 ||ECF No. 37 at 2. Plaintiff received an express written warranty for the Vehicle. Compl. 24 9. Between June 13, 2019 and November 9, 2021, Plaintiff brought the Vehicle in for 25 || repairs eight (8) times pursuant to the warranty for various electrical and mechanical 26 |/issues. ECF No. 39 at 3-4. All of the repairs took place at Defendant’s authorized repair 27 || facility, Land Rover San Diego. Id. at 2. l On March 27, 2023, Plaintiff Melinda Yousif and Defendant Jaguar Land Rover 2 || North America attended a Final Pretrial Conference. ECF No. 32. At the conference, 3 || parties discussed outstanding issues of law requiring resolution before trial, and the Cour 4 || ordered the parties to brief these issues. Jd. The briefing was completed in May 2023. 5 ECF Nos. 37-40, 42-46. The Court will outline its ruling on each of the briefed 6 issues below. 7 II. DISCUSSION 8 A. Third Party Dispute Resolution 9 Defendant argues Plaintiff's MMWA claim is barred as a matter of law because 10 |) Plaintiff did not engage in the informal dispute resolution process (the “BBB Auto Line”) 11 |/contained in the JURNA warranty booklet. ECF No. 37. Plaintiff argues that the 12 information contained in the booklet does not comply with the MMWA’s requirement 13 is therefore not binding. ECF No. 39. The Court agrees with Plaintiff 14 The MMWA provides if a warrantor establishes an informal dispute settlement 15 || procedure (“IDR”) which meets the requirements of the Federal Trade Commission’s 16 ||(“FTC”) rules and “he incorporates in a written warranty a requirement that the consumer 17 || resort to such procedure before pursuing any legal remedy under this section...then (i) 18 |/the consumer may not commence a civil action.. -unless he initially resorts to such 19 || procedure.” Freas v. BMW of North America, LLC, 320 F -Supp.3d 1126, 1133 (2018) 20 || (quoting 15 U.S.C. § 23 10(a)(3)). 21 In order to meet the FTC’s requirements, the warrantor must disclose “clearly and 22 conspicuously at least the following information on the face of the written warranty[.]” 23 || Freas, 320 F.Supp.3d at 1133 (quoting 16 C.F.R. § 703(2)(b) (emphasis added). That 24 || information includes: (1) the availability of the IDR; (2) name and address of the IDR 25 ||mechanism which consumers may use without charge; (3) a statement that the consumer 26 |/is required to use the IDR before filing civil action; and (4) a statement indicating where 27 || further information can be found in accompanying materials. 16 C.F.R. § 703 (2)(b). 28 || Further, “[i]f the warranty is included as part of a longer document, such as a use and I care manual, the phrase on the face of the warranty means the page in such document on 2 || which the warranty text begins.” Freas, at 1134 (quoting 16 C.F.R. § 703.1(h)(2) 3 (cleaned up). 4 In this case, the warranty booklet in question is titled “Passport to Service.” ECF 5 39-3. Pages 29-30 of the booklet is titled “Customer Assistange[,]” Id. Page 30 6 contains the following paragraph under the sub-heading “Independent alternative dispute 7 || resolution programs”: 8 “JLRNA participates in two independent alternative dispute resolution programs. 9 AUTOCAP (Automotive Consumer Action Program) and BBB Auto Line are national alternative dispute resolution programs, sponsored by the National 10 Automobile Dealers Association and the Better Business Bureau, respectively. Consumers may contact AUTOCAP through their state’s department of motor vehicles or BBB Auto Line through the Better Business Bureau. For details on 12 BBB Auto Line, please refer to the Dispute Resolution Supplement.” I3 Id. The dispute resolution supplement contains general information about BBB Auto Line on page 2, but does not include contact information, or that BBB Auto Line is required prior to pursuing civil remedies. ECF No. 44, Ex. B. Instead, this information is separated out by state. Jd. Notice to Owners in the State of California appears on page 9 of the booklet. Jd. The last paragraph of this page indicates the requirement to use the BBB Auto Line before asserting civil rights or remedies under California law or the MMWA. Jd. 20 The principle outlined in Freas is controlling here. In Freas, the Court found that 21 BMW’s warranty booklet did not comply with the FTC’s requirements because it failed a to place the IDR information “on the face of the written warranty[.]” Freas at 1133. “3 While BMW argued the Court in Freas should excuse technical noncompliance with the at FTC requirements, the Court noted MMWA “expressly provides that a consumer is only required to pursue an [IDR] prior to filing suit if such procedure, and its implementation, a8 meets the requirements of the FTC’s rules.” /d. at 1134 (quoting 15 U.S.C. § 2310(a)(3)(B) (cleaned up). 28 1 The Court concludes this separation of information across two booklets and three 2 || pages does not comport with the FTC’s requirement that certain enumerated information 3 || about the IDR process appear “on the face” of the warranty. Defendant argues Freas is 4 || distinguishable because it discussed a warranty contained in a larger document, and 5 || therefore argues “on the face of the warranty” does not necessarily mean “on the page 6 || where the warranty text begins” for warranty-only booklets. ECF No. 37. While this 7 || may be true, this does not solve the problem with the warranty booklet in this case. 8 The FTC does allow additional information to be contained elsewhere in the 9 || booklet, the first three items of information are required, by statute, to appear “on the face 10 || of the warranty” in all instances. 16 C.F.R. § 703(2)(b). Here, only the name of the IDR 11 ||mechanisms appears in the original warranty booklet used by JLRNA. Even in the 12 || dispute resolution supplement, the information for BBB Auto Line appears on pages 2 13 || and 9, with page 2 containing none of the information required by the FTC. “Because 14 || Congress has conditioned the informal dispute settlement requirement on the warrantor’s 15 ||compliance with FTC rules, it would be inappropriate for the Court to excuse ...failure to 16 || fully adhere to 16 C.F.R. § 703.2(b).” Freas, at 1134 (citing Henson v. Santander 17 || Consumer USA Inc., 582 U.S. 79 (2017)). Accordingly, the Court rules Plaintiffs 18 || MMWA claim is not barred by failure to pursue the IDR mechanism in the JURNA 19 || warranty booklet.! 20 21 22 23 Plaintiff argues Defendant waived its right to invoke the IDR requirement by failing to 25 the issue in a pretrial motion. ECF No. 39. While it is a close call whether this failure rises to the level of an “intentional abandonment of a legal right”, it is worth 26 noting that the deadline for filing pre-trial motions had passed 273 ight before the 27 || Defendant raised the issue. See ECF No. 9, Scheduling Order; see also Groves v. 28 Prickett, 420 F.2d 1 l 19, 1125 (9th Cir. 1970). However, the Court need not depend on the waiver issue for its ruling. 4 1 B. Choice of Law 2 The parties are also at odds regarding which state law should be applied to 3 || Plaintiff's MMWA claim. See ECF Nos. 38, 40. Defendant argues that Illinois law 4 || should apply because that is where the vehicle was purchased, ECF No. 43 at 1-2. 5 || Plaintiff argues California law should apply because Plaintiff is a California resident, the 6 || Vehicle was used in, and all repairs under the warranty occurred i California. ECF No. 7 at 3-5. The Court concludes that California law shall apply. 8 Freas is again instructive. While the MMWA “creates a extais cause of action □□□ 9 warrantor’s failure to comply with the terms of a warranty[,]” the MMWA generally 10 for the application of state written and implied warranty law for certain rights and 11 ||remedies. Freas, at 1131 (citing Milicevic v. Fletcher Jones Imports, Ltd., 402 F.3d 912, 12 ||918 (9th Cir. 2005)). Accordingly, “[f]ederal courts exercising jurisdiction under 13 || [MMWA] apply the forum-state’s choice of law rules when selecting which state’s 14 || warranty laws govern the plaintiff's claims.” Freas at 1132 “ie omitted). Under 15 || California law, a claim for breach of express or implied warranty sounds in contract. Id. 16 (citations omitted). “Under Civil Code § 1646, a contract is to be in erpreted according 17 ||to the law and usage of the place where it is to be performed; or, if does not indicate a 18 || place of performance, according to the law and usage of the place where it is made.” Jd. 19 In Freas, the Court determined Nevada law applied because the plaintiff purchased 20 primarily serviced the vehicle in Nevada. Id. In this case, the vehicle was 21 || purchased in Illinois, but all relevant use and repairs under the warranty occurred in 22 ||California. The Court concludes California law should apply. See Scott v. Jayco, Inc., 23 F.Supp.3d 1143, 1146-50 (2020) (concluding under either California civil code test 24 || or restatement of conflict of laws test, California law applied to vehi¢le purchased in 25 || lowa because all use and repairs took place in California, where Psi lived). 26 C. Option of Remedies 27 Defendant next argues should California law apply, Plaintiff cannot pursue 28 ||/remedies through California’s Song-Beverly Act (“SBA”) because the Vehicle was I |/purchased outside of California. ECF No. 38 at 5 -6. Plaintiff argues this is incorrect, an 2 |/ essentially the MMWA provides a right of action and only borrows the remedies from 3 ||state laws. ECF No. 46 at 2-3. The Court agrees with Defendant. | 4 Both parties cite to published, conflicting authority on this pce Plaintiff cites to 5 ||Romo v. FFG Ins. Co., which concluded that the MMWA “looked jo state law for 6 || guidance on remedies” but not for the substantive cause of action. 397 F.Supp.2d 1237, 7 (C.D. Cal. 2005). In Romo, the Court was determining wheth r SBA remedies 8 ||could apply for the purpose of determining the amount in oil under a 9 || jurisdictional inquiry. Jd. Defendant, on the other hand, cites to Scott v. Jayco, which 10 || found that the MMWA “does not make applicable state law that eek not otherwise 11 |/apply.” 443 F.Supp.3d at 1151. The Court in Jayco reviewed the Romo decision and 12 || criticized its application outside of the jurisdictional context, noting that Romo did not 13 || determine which states’ law applied or whether the applicable state law was the SBA or 14 || the California Commercial Code. Jayco, at 1150. 15 The Court finds the reasoning outlined in Jayco more persuasive and applicable to 16 || the instant case than that in Romo. Accordingly, the Court determines Plaintiff is not 17 |/entitled to pursue SBA remedies because the Vehicle was not purchased in California. 18 || Instead, plaintiff can pursue applicable remedies in California Commercial Code sections 19 || 2714-15. 20 D. Implied Warranty Claim 21 Finally, Defendant argues Plaintiff is barred from pursuing a claim for breach of 22 |/implied warranty because vertical privity of contract is required for implied warranty 23 |/claims under the California Commercial code. ECF No. 38 at 3-4 (citing Clemens v. 24 || DaimlerChrysler Corp., 534 F.3d 1017, 1024 (2008)). Plaintiff argues that this argument 25 |/is inapposite because Plaintiff seeks remedies under the SBA, not the California 26 ||Commercial Code. ECF No. 46 at 7-8. Plaintiffs complaint ral to seek any 27 ||remedies included under both the SBA and the California Commercial Code. ECF No. 1- 28 at 5. The Court has determined that the California Commercial “pds contains the 2 || applicable state law remedies available for Plaintiff. Clemens is clear that, under the 3 || applicable implied warranty provisions of the California Commercial Code, “an end 4 |/consumer...who buys from a retailer is not in privity with a manufacturer[,]” and 5 “California courts have painstakingly established the scope of the privity requirement 6 || under California Commercial Code section 23 14, and a federal cour sitting in diversity i: 7 ||not free to create new exceptions to it.” Clemens, 534 F.3d at 1023-24 (citations 8 |/omitted). Accordingly, Plaintiff would have no remedies under state law for an implied 9 || warranty claim through the MMWA. 10 Ill. CONCLUSION Uy For the reasons set forth above, the Court makes the following rulings: 12 1. Plaintiff's MMWA claim is not foreclosed by a failure to engage in IDR process 13 || because the information in the JURNA booklet does not comport ws applicable FTC 14 |/regulations required by the MMWA. 15 2. California law is the law applicable to Plaintiff's claim under the MMWA. 16 3. Plaintiff may not pursue remedies under the SBA, but a under the 17 || California Commercial Code. 18 4. Plaintiff cannot pursue remedies for the breach of implied peste claim 19 |} because Plaintiff does not meet the vertical contractual privity requirements under the 20 || California Commercial Code. 21 Pursuant to Magistrate Judge Skomal’s August 3, 2023 One in are to 22 || contact the assigned Magistrate Judge (now Judge D. Thomas Ferra ) within three (3) 23 || days of the date of this order to schedule the mandatory settlement See ECF 24 51, 53. 25 IT IS SO ORDERED. | . 26 Dated: May 13, 2024 / 27 “ROGER T. BENISEZ United States District Judge 28