In re Toyota Motor Corp. Hybrid Brake Marketing, Sales, Practices & Products Liability Litigation

890 F. Supp. 2d 1210, 2011 WL 8986794, 2011 U.S. Dist. LEXIS 110206
CourtDistrict Court, C.D. California
DecidedSeptember 12, 2011
DocketCase No. SAML 10-02172-CJC(RNBx)
StatusPublished
Cited by7 cases

This text of 890 F. Supp. 2d 1210 (In re Toyota Motor Corp. Hybrid Brake Marketing, Sales, Practices & Products Liability Litigation) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Toyota Motor Corp. Hybrid Brake Marketing, Sales, Practices & Products Liability Litigation, 890 F. Supp. 2d 1210, 2011 WL 8986794, 2011 U.S. Dist. LEXIS 110206 (C.D. Cal. 2011).

Opinion

ORDER DENYING DEFENDANTS’ MOTION TO DISMISS AND GRANTING IN LIMITED PART MOTION TO STRIKE

CORMAC J. CARNEY, District Judge.

I. INTRODUCTION

Plaintiffs Michael Scholten, Jessica M. Kramer, Alexsandra Del Real, Lu Li, and Michael Choi (collectively, “Plaintiffs”) bring this putative class action against Defendants Toyota Motor Corporation and Toyota Motor Sales U.S.A., Inc. (collectively “Defendants” or “Toyota”) on behalf of themselves and others similarly situated who purchased or leased Model Year 2010 Toyota Prius (the “Prius”) or Model Year 2010 Lexus HS 250h (the “Lexus”) (collectively, the “Class Vehicles”) in the United States, which were manufactured between January 2009 and February 2010. Plaintiffs allege that a defect in the anti-lock brake system (the “ABS”) of the Class Vehicles caused the ABS to improperly engage when it is not needed, resulting in increased stopping time and distance. Plaintiffs further allege that Toyota had notice of the defect as early as July 2009 but nevertheless failed to disclose the defect on a timely basis, continued to manufacture and sell the Class Vehicles, and advertised the Class Vehicles as safe and reliable. In February 2010, Toyota voluntarily recalled the Class Vehicles and offered to install a software update to remedy the braking defect. Despite the recall, Plaintiffs claim that the braking defect has not been cured, and they have suffered ensuing monetary and property damages. Plaintiffs assert five causes of action against Toyota under California law for (1) violations of the Consumer Legal Remedies Act (“CLRA”), (2) violations of the Unfair Competition Law (“UCL”), (3) violations of the False Advertising Law (“FAL”), (4) breach of Implied Warranty of Merchantability, and (5) common law breach of contract.

Toyota now moves to dismiss Plaintiffs’ claims pursuant to the Federal Rule of Civil Procedure 12(b)(6). Specifically, Toyota contends that its voluntary recall of the Class Vehicles renders the claims moot. Toyota further moves to dismiss Plaintiff Kramer’s claims in deference to the National Highway Traffic Safety Administration (“NHTSA”) under the doctrine of primary jurisdiction. Toyota additionally moves to dismiss Plaintiffs’ claims for violation of the CLRA, UCL, and FAL under Federal Rule of Civil Procedure 9(b) for failure to allege these claims with particularity. Toyota also moves to dismiss Plaintiffs class allegations on the ground that Plaintiffs are unable to meet the requirements of Federal Rules of Civil Procedure 23 because Plaintiffs are not typical of the class, individual issues predominate, and the proposed putative class is not ascertainable. Finally, Toyota moves to dismiss Plaintiffs’ CLRA class allegations because Plaintiffs are unable to meet the requirements of Section 1781 of the California Civil Code, as Toyota instituted a voluntary recall that effectively bars a CLRA class action. Alternatively, Toyota moves to strike portions of the First Consolidated Amended Class Action Complaint (“Complaint” or “Compl.”) under Federal Rule of Civil Procedure 12(f).

For the following reasons, Toyota’s motion to dismiss is DENIED, and its Motion to Strike is GRANTED IN LIMITED PART.

II. FACTUAL ALLEGATIONS

Plaintiffs allege that the Model Year 2010 Prius and Model Year 2010 Lexus HS [1215]*1215250h vehicles all contain the same defect in the anti-lock brake system that creates an unreasonably safety risk to consumers. (Compl. ¶¶1, 59-64, 67.) All the Class Vehicles were manufactured between January 2009 and February 2010. (Id. ¶ 60.) Specifically, Plaintiffs allege that the Class Vehicles have a braking defect that cause stopping distances to increase relative to driver expectations on rough or slick surfaces. (Id. ¶¶3, 55.) Some drivers have described the condition as a brief lag in braking capability or a brief surge while braking. (Id. ¶ 55.) Plaintiff Scholten experienced braking problems that caused him to crash his Prius soon after he purchased his vehicle in October 2009. (Id. ¶ 18.) Mr. Scholten later traded in his vehicle for another 2010 Prius with substantial out of pocket loss. (Id.) Plaintiffs Kramer, Li, and Choi purchased their Prius between June 2009 and January 2010 and also experienced braking while driving their Prius. (Id. ¶ 19, 21-22.) Moreover, according to the NHTSA data released around July 2010, the NHTSA and Toyota received hundreds of consumer complaints related to the Prius braking system, along with dozens of reports of crashes and injuries. (Id. ¶ 53.) Plaintiffs further claim that because of the defect, which has not been cured, the value of their vehicles has decreased below the standard depreciation value. (Id. ¶¶ 74-77.)

Plaintiffs allege that Toyota knew about the alleged braking defect and the dangers it posed to both drivers and pedestrians as early as July 2009 through hundreds of consumer complaints filed with Toyota and the NHTSA. (Id. ¶¶ 5-6, 10, 52-55.) Despite knowledge of the defect, Plaintiffs claim that Toyota failed to disclose the defect to consumers but instead covertly implemented a software update as a “running production change” in early 2010 to remedy the braking problem by “improving the ABS system’s response time, as well as the system’s overall sensitivity to tire slippage for all future Prius vehicles.” (Id. ¶¶ 8, 56-58.) From 2009 to 2010, while Toyota knew about the braking defect in the Class Vehicles, Plaintiffs claim that Toyota nevertheless utilized misleading advertisements that promoted the safety and reliability of the Class Vehicles, via various media sources as well as through the vehicles’ warranty and service guides. (Id. ¶¶ 1-2, 27-44; Defs.’ Req. for Judicial Notice, Exhs. H, I.)1 The Class Vehicles also included express written warranties which covered repairs and adjustments needed to correct any defects in materials or workmanship of any parts supplied by Toyota. (Compl. ¶¶ 45-51.) Plaintiffs allege that they had seen Toyota advertisements that promoted the safety of the vehicles without any mention of the vehicles’ defects; that Plaintiffs relied on this information in purchasing their defective vehicles; and that Plaintiffs would not have purchased the vehicles had they known about the defects. (Id. ¶¶ 14, 18-22.)

On February 3, 2010, the NHTSA opened a formal investigation related to braking problems with the Prius vehicles after receiving consumer complaints that they experienced momentary loss of braking during brake applications while traveling over an uneven road surface such as a pothole or bump in the road. (Id. ¶ 55; Defs.’ Req. for Judicial Notice, [1216]*1216Exh. D.)2 On February 8, 2010, Toyota announced that it would conduct a voluntary recall for the Class Vehicles to update the ABS software in response to consumer complaints. (Id. ¶¶ 11, 59-60; Defs.’ Req. for Judicial Notice, Exh. K.)3 Toyota expected to begin the recall by late February 2010 and to complete the recall by late March 2010. (Defs.’ Req. for Judicial Notice, Exh. F)4

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Bluebook (online)
890 F. Supp. 2d 1210, 2011 WL 8986794, 2011 U.S. Dist. LEXIS 110206, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-toyota-motor-corp-hybrid-brake-marketing-sales-practices-cacd-2011.