Nevada Fleet LLC v. Fedex Corp.

• Court: District Court, E.D. California
• Decided: January 18, 2024
• Docket: 2:17-cv-01732
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 NEVADA FLEET LLC, No. 17-cv-01732-DAD-KJN 12 Plaintiff, 13 v. ORDER DENYING DEFENDANT AUTOMOTIVE RENTALS INC.’S MOTION 14 FEDEX CORPORATION, et al., TO DISMISS AND GRANTING IN PART AND DENYING IN PART DEFENDANT 15 Defendants. FEDERAL EXPRESS CORPORATION’S MOTION TO DISMISS 16 (Doc. Nos. 131, 134) 17 18 This matter is before the court on defendant Automotive Rentals, Inc.’s (“ARI”) May 31, 19 2022 motion to dismiss certain claims brought against it and defendant Federal Express Corp.’s 20 (“FedEx”) June 2, 2022 motion to dismiss plaintiff’s third amended complaint. (Doc. Nos. 131, 21 134). On October 11, 2022, the pending motions were taken under submission on the papers.1 22 (Doc. No. 158.) For the reasons explained below, defendant ARI’s motion to dismiss will be 23 denied and defendant FedEx’s motion to dismiss will be granted in part and denied in part. 24 ///// 25 ///// 26 1 On August 25, 2022, this case was reassigned to the undersigned. (Doc. No. 153.) The 27 undersigned has endeavored to work through a substantial backlog of inherited submitted motions in reassigned civil cases as quickly as possible since returning to the Sacramento courthouse in 28 August of 2022. 1 BACKGROUND 2 On April 22, 2022, plaintiff Nevada Fleet LLC filed the operative third amended 3 complaint (“TAC”) in this action alleging that defendant FedEx and defendant ARI knowingly 4 sold plaintiff 98 vehicles with double or triple the publicly advertised mileage. (Doc. No. 122.) 5 In its TAC, plaintiff alleges the following. 6 Plaintiff is an independent automotive dealer specializing in the wholesale purchase and 7 sale of FedEx delivery vans, focusing on vans with lower mileage. (Doc. No. 126 at ¶¶ 17–18, 8 23.) Plaintiff buys these vans at commercial auctions around the country, as well as directly from 9 defendant ARI. (Id. at ¶ 19, 21.) Plaintiff then refurbishes and resells the vans to third-party 10 customers such as the individual Tonn Cummins and the companies KC Delivery Services, Inc., 11 Millennium Express Home Delivery, Inc., and Van Tastic. (Id. at ¶¶ 22, 117, 228.) Defendant 12 ARI is the largest privately held corporate fleet management company in the United States. (Id. 13 at ¶ 25.) Defendant ARI provides vehicle services including acquisition, customization, 14 maintenance, remarketing, sale, and disposal. (Id.) When fleet vehicles reach the end of life as 15 defined under a fleet management agreement, defendant ARI takes possession of the vehicles and 16 markets and sells them via its websites or through an auction house. (Id. at ¶ 28.) 17 Defendant ARI served as defendant FedEx’s agent in remarketing and selling defendant 18 FedEx’s retired vehicles. (Id. at ¶ 157.) On June 1, 2009, at the latest, defendant ARI and 19 defendant FedEx signed the Fleet Management Services Agreement (“FMSA”). (Id. at ¶ 37.)2 20 On or about July 11, 2013, defendants agreed to a ninth amendment of the FMSA (“the Ninth 21 Amendment”). (Id. at ¶ 54.) Under the Ninth Amendment, defendant FedEx determined which 22 retired vehicles would be resold. (Id. at ¶ 65.) For each such vehicle, defendant ARI would at 23 some point execute an assignment of title on behalf of defendant FedEx, purporting to assign title 24 to the vehicle from defendant FedEx to defendant ARI. (Id. at ¶ 66.) That is, one employee of 25 defendant ARI would sign as defendant FedEx, and another ARI employee would countersign as 26 defendant ARI. (Id.) When the vehicle was sold to a third-party buyer such as plaintiff, 27 2 A copy of relevant sections of the FMSA is attached to plaintiff’s TAC. (See Doc. No. 128 at 28 40–90.) 1 defendant ARI would execute another assignment of title from defendant ARI to that buyer. (Id. 2 at 13.) Defendant ARI told plaintiff that it needed to check with defendant FedEx before it could 3 “unwind” any vehicle sales to plaintiff. (Id. at ¶ 116.) Under the FMSA, defendant ARI receives 4 a small and capped percentage of the profits from each vehicle it sells, while defendant FedEx 5 receives the much larger remainder of the profits. (Doc. No. 117 at 9.)3 Moreover, § 11(D) of the 6 FMSA expressly refers to “the transfer of ownership by ARI, as agent, from FedEx to the next 7 succeeding owner.” (Doc. No. 117 at 8–9; see also Doc. No. 122 at 8.) 8 For several years, defendants conspired to resell retired vehicles while failing to disclose 9 odometer changes and affirmatively misrepresenting vehicle mileage. (Id. at ¶ 203.) Mileage is 10 the most important factor in determining a vehicle’s sale price, with lower-mileage vehicles 11 garnering higher prices. (Id. at ¶ 162.) Defendant FedEx kept meticulous records of odometer 12 changes and overall mileage on each vehicle. (Id. at ¶¶ 70–73.) Defendant ARI was given access 13 to these records. (Id. at ¶ 74.) Nevertheless, defendant FedEx routinely failed to affix a sticker to 14 the left door frame specifying the true mileage of the vehicle or to disclose the true mileage in 15 writing after an odometer replacement, as required by the Federal Odometer Act, 49 U.S.C. 16 §§ 32701 et seq. (the “Odometer Act”). (Id. at ¶¶ 145, 147.) Defendant FedEx’s employees also 17 signed certifications attesting to inaccurate mileage. (Id. at ¶ 148.) In turn, defendant ARI would 18 fail to disclose the true mileage when the vehicle was resold to third parties such as plaintiff. (Id. 19 at ¶ 159.) Specifically, defendant ARI would turn the vehicle over to the auction house, which 20 would then send defendant ARI a vehicle condition report. (Id. at ¶ 89.) Due to the lack of 21 stickers or disclosures revealing the odometer change, as well as defendant ARI mailing the 22 auction house title to the vehicle reflecting an inaccurate mileage figure, the auction house’s 23

24 3 In several documents filed in this case, including plaintiff’s TAC and defendant FedEx’s pending motion to dismiss (see Doc. Nos. 126, 134), sections of the FMSA have been redacted. 25 However, many of these same sections were not redacted in other documents, namely plaintiff’s opposition to defendant FedEx’s earlier motion to dismiss the SAC (Doc. No. 117) and the 26 court’s prior order dismissing plaintiff’s SAC (Doc. No. 122). In light of the fact that the 27 unredacted documents have been filed on the public docket for two years and one-and-a-half years, respectively, without defendants requesting that these materials be sealed, the court will 28 refer to the unredacted text of the relevant FMSA sections throughout this order when necessary. 1 condition report would state a far lower mileage figure than was accurate for the vehicle. (See, 2 e.g., id. at ¶ 93, 137.) Defendant ARI would then use this condition report as the basis of its 3 online marketing despite knowing the vehicle’s mileage was two to three times higher than that 4 reflected on the condition report. (Id. at ¶¶ 89, 93; see also id. at ¶ 135.) As a result of their 5 disguised mileage, the vehicles would sell for nearly double their true value. (Id. at ¶ 102.) 6 Plaintiff alleges the following details in providing several examples of the alleged scheme. 7 FedEx vehicle asset number (“Asset Number”) 221846, a 1998 Freightliner W700 walk-in 8 delivery van with Vehicle Identification Number (“VIN”) 4UZA4FF40WC897670, received an 9 odometer replacement on March 29, 2012. (Id. at ¶¶ 67–68, 75–76.) Neither defendant applied 10 the sticker required by the Odometer Act specifying the accurate pre-replacement mileage. (Id. at 11 ¶ 78.) Defendant ARI received an electronic request from defendant FedEx to pick up Asset 12 221846 on April 19, 2017; defendant ARI requested the title for that vehicle on the same day. 13 (Id. at ¶¶ 85–86.) After defendant ARI mailed the title to the vehicle to an auction house, the 14 auction house performed a cursory inspection and sent its condition report to defendant ARI. (Id. 15 at ¶¶ 87–88.) Defendant ARI used this condition report as the basis of its online marketing of 16 Asset 221846 even though the condition report disclosed the vehicle’s mileage as only 106,349 17 miles, when defendant ARI knew from defendant FedEx’s records that the asset had accrued 18 362,760 miles over the course of 20 years. (Id. at ¶¶ 89, 93–94.) Plaintiff purchased Asset 19 221846 on June 1, 2017 for $4,600, nearly twice what the price would be for a similar vehicle 20 with 360,000 miles. (Id. at ¶ 96.) The bill of sale provided to plaintiff confirmed the odometer 21 reading of only 106,349 miles. (Id.) 22 Other examples alleged by plaintiff include Assets 227217 and 232266. (Id. at ¶¶ 98, 23 100.) Asset 227217 was marketed as having only 86,115 miles when plaintiff bought it in May 24 2017 for $4,500; defendant FedEx’s records show the true mileage as 346,967 miles. (Id. at 25 ¶¶ 98–99.) Asset 232266 was marketed as having only 150,130 miles when plaintiff bought it in 26 ///// 27 ///// 28 ///// 1 January 2017; defendant FedEx’s records show the true mileage as 385,522. (Id. at ¶¶ 100–01.)4 2 Overall, plaintiff has confirmed that it bought at least 98 retired FedEx vans between 2013 and 3 2017 with undisclosed odometer changes, and likely more. (Id. at ¶ 97.) Plaintiff paid nearly 4 double the true value for these vans because of the undisclosed odometer replacements. (Id. at 5 ¶ 102.) 6 In 2017, plaintiff received a customer complaint from individual Tonn Cummins. (Id. at 7 ¶ 117.) A scan of the engine revealed that the retired FedEx van Cummins had purchased from 8 plaintiff with 188,000 miles on the odometer actually had been driven over 300,000 miles. (Id.) 9 Plaintiff began investigating the odometer discrepancies and complained to the auction houses 10 and defendant ARI. (Id. at ¶ 118.) After plaintiff filed this action in August 2017, plaintiff was 11 locked out of all auction houses and defendant ARI’s direct purchasing program. (Id. at ¶¶ 119– 12 21.) Defendant ARI and the auction houses informed plaintiff that it would need to drop its 13 lawsuit against defendant FedEx in order to be readmitted to the auctions. (Id. at ¶ 122.) 14 Based on the above allegations, plaintiff asserts the following seven claims in its TAC, 15 with the fifth claim asserted only against defendant ARI, while the remaining claims are asserted 16 against both defendants: (1) odometer fraud in violation of the Odometer Act, 49 U.S.C. 17 §§ 32701, et seq.; (2) intentional misrepresentation or omission; (3) negligent misrepresentation 18 or omission; (4) racketeering in violation of 18 U.S.C. § 1962(c) and conspiracy to commit 19 racketeering in violation of 18 U.S.C. § 1962(d); (5) intentional interference with prospective 20 economic advantage; (6) breach of implied warranty of merchantability; and (7) unlawful, unfair, 21 and fraudulent business practices in violation of California’s Unfair Competition Law (“UCL”), 22 California Business and Professions Code §§ 17200, et seq. (Doc. No. 126 at 24–37.) 23 On August 8, 2017, plaintiff filed its initial complaint against “FedEx Corporation” and 24 unnamed defendants Does 1–50. (Doc. No. 1.) Plaintiff moved to amend its complaint on 25 December 29, 2017; the motion was granted by the previously assigned district judge on April 10, 26 4 In paragraph 101 of its TAC, plaintiff alleges that it was Asset 227217 with 385,522 miles on it, 27 not Asset 232266. Given that plaintiff is discussing Asset 232266 at that point in its TAC, and given that plaintiff elsewhere specifies the (different) mileage for Asset 227217, the court 28 assumes that paragraph 101 is intended to provide the mileage figure for Asset 232266. 1 2018, and plaintiff filed its first amended complaint (“FAC”) on April 17, 2018, naming those 2 same defendants and defendant FedEx. (Doc. Nos. 11, 21, 27.) On July 30, 2018, defendant 3 FedEx filed a motion for judgment on the pleadings; the motion was granted by the previously 4 assigned district judge on June 11, 2021, and plaintiff filed its second amended complaint 5 (“SAC”) on July 12, 2021, naming defendants FedEx, ARI, and Does 1–50. (Doc. Nos. 36, 91, 6 95.)5 On August 20, 2021, defendants FedEx and ARI each filed a separate motion to dismiss 7 plaintiff’s SAC. (Doc. Nos. 111, 112.) On March 25, 2022, the previously assigned district 8 judge granted defendant FedEx’s motion on the grounds that plaintiff had failed to sufficiently 9 allege that defendant ARI was the agent of defendant FedEx. (Doc. No. 122.) In the same order 10 (the “Prior Order”), the court denied in part defendant ARI’s motion to dismiss, finding that 11 plaintiff had sufficiently alleged odometer fraud, intentional misrepresentation, negligent 12 misrepresentation, racketeering and conspiracy to commit racketeering, breach of implied 13 warranty, and violation of the UCL on the part of defendant ARI. (Id.) However, the court also 14 granted in part defendant ARI’s motion, finding that plaintiff had failed to sufficiently allege 15 intentional interference with prospective economic advantage, breach of express warranty, and 16 violation of the Sherman Act. (Id.) 17 On April 22, 2022, plaintiff filed its TAC. (Doc. No. 126.) As noted above, on May 31, 18 2022, defendant ARI filed its pending motion to dismiss the intentional interference with 19 prospective economic advantage claim brought against it in the TAC, as well as the claim arising 20 under 18 U.S.C. § 1962(a) that defendant ARI argues is being brought against it in the TAC. 21 (Doc. No. 131.) And, on June 2, 2022, defendant FedEx filed its pending motion to dismiss 22 plaintiff’s TAC, arguing that plaintiff again failed to sufficiently allege each claim via either an 23 agency relationship or a theory of direct liability. (Doc. No. 134.) Plaintiff filed its opposition to 24 defendant ARI’s motion to dismiss on July 1, 2022 and its opposition to defendant FedEx’s 25 motion to dismiss on July 5, 2022. (Doc. Nos. 143, 145.) On July 11, 2022, defendant ARI filed 26 its reply to plaintiff’s opposition; defendant FedEx filed its reply to plaintiff’s opposition on 27 5 On August 2, 2021, plaintiff filed a redacted SAC, naming the same defendants as in its 28 unredacted SAC. (Doc. No. 104.) 1 July 18, 2022. (Doc. No. 148, 152.) Finally, as noted above, on August 25, 2022, the case was 2 reassigned to the undersigned. (Doc. No. 153.) 3 LEGAL STANDARD 4 A. Motion to Dismiss Under Rule 12(b)(6) 5 The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal 6 sufficiency of the complaint. N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 7 1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of 8 sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 9 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege “enough facts to state a claim to 10 relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A 11 claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw 12 the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 13 Iqbal, 556 U.S. 662, 678 (2009). 14 In determining whether a complaint states a claim on which relief may be granted, the 15 court accepts as true the allegations in the complaint and construes the allegations in the light 16 most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). However, 17 the court need not assume the truth of legal conclusions cast in the form of factual allegations. 18 U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not 19 require detailed factual allegations, “it demands more than an unadorned, the-defendant- 20 unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A pleading is insufficient if it offers 21 mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” 22 Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements 23 of a cause of action, supported by mere conclusory statements, do not suffice.”). It is 24 inappropriate to assume that the plaintiff “can prove facts that it has not alleged or that the 25 defendants have violated the . . . laws in ways that have not been alleged.” Associated Gen. 26 Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). 27 In ruling on a motion to dismiss brought under Rule 12(b)(6), the court is permitted to 28 consider material that is properly submitted as part of the complaint, documents that are not 1 physically attached to the complaint if their authenticity is not contested and the plaintiffs’ 2 complaint necessarily relies on them, and matters of public record. Lee v. City of Los Angeles, 3 250 F.3d. 668, 688–89 (9th Cir. 2001). 4 B. Heightened Pleading Standard Under Rule 9(b) 5 “When an entire complaint, or an entire claim within a complaint, is grounded in fraud 6 and its allegations fail to satisfy the heightened pleading requirements of Rule 9(b), a district 7 court may dismiss the complaint or claim.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 8 (9th Cir. 2003). Under Rule 9(b), the “circumstances constituting the alleged fraud [must] be 9 specific enough to give defendants notice of the particular misconduct . . . so that they can defend 10 against the charge and not just deny that they have done anything wrong.” Kearns v. Ford Motor 11 Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (internal quotation marks omitted) (quoting Bly-Magee 12 v. California, 236 F.3d 1014, 1019 (9th Cir. 2001)). To satisfy the particularity standard of 13 Rule 9(b), “a pleading must identify the who, what, when, where, and how of the misconduct 14 charged, as well as what is false or misleading about the purportedly fraudulent statement, and 15 why it is false.” Moore v. Mars Petcare US, Inc., 966 F.3d 1007, 1019 (9th Cir. 2020) 16 (quotations omitted) (quoting Davidson v. Kimberley-Clark Corp., 889 F.3d 956, 964 (9th Cir. 17 2018)). However, “[m]alice, intent, knowledge and other conditions of a person’s mind may be 18 alleged generally.” Irving Firemen’s Relief & Ret. Fund v. Uber Techs., Inc., 998 F.3d 397, 404 19 (9th Cir. 2021) (quoting Fed. R. Civ. P. 9(b)); see also Klaehn v. Cali Bamboo LLC, No. 21- 20 55738, 2022 WL 1830685, at *2 (9th Cir. 2022)6 (“Under Fed. R. Civ. P. 9(b), a plaintiff must 21 plead circumstances from which a court can plausibly infer the defendant’s knowledge.”). 22 ANALYSIS 23 A. Defendant ARI’s Motion to Dismiss 24 In its pending motion, defendant ARI argues that plaintiff has failed to sufficiently allege 25 a racketeering or conspiracy to commit racketeering claim arising under 18 U.S.C. § 1962(a) or 26 ///// 27 6 Citation to the unpublished Ninth Circuit opinions such as those cited here and elsewhere in this 28 order is appropriate pursuant to Ninth Circuit Rule 36-3(b). 1 its fifth claim for intentional interference with prospective economic advantage. (Doc. No. 131-1 2 at 8–14.) 3 1. Violation of 18 U.S.C. 1962(a) 4 In its pending motion to dismiss, defendant ARI argues that plaintiff fails to state a claim 5 for violation of 18 U.S.C. § 1962(a). (Doc. No. 131-1 at 8.) In its opposition to the pending 6 motion, plaintiff clarifies that it opted not to replead a claim under § 1962(a) in its TAC after that 7 claim was dismissed in its second amended complaint (“SAC”) by the court. (Doc. No. 143 at 7.) 8 In its reply to plaintiff’s opposition, defendant ARI states that it “is content to let [plaintiff’s] 9 much-needed clarification stand as the final word on its defunct § 1962(a) claim.” (Doc. No. 148 10 at 4.) After reviewing plaintiff’s TAC, the court is also satisfied that plaintiff is not asserting any 11 claim under § 1962(a). 12 Accordingly, defendant ARI’s motion to dismiss plaintiff’s claim(s) brought against it 13 arising under 18 U.S.C. § 1962(a) will be denied as moot in light of plaintiff’s express 14 abandonment of any such claim(s). 15 2. Claim 5: Intentional Interference with Prospective Economic Advantage 16 To state a claim for intentional interference with prospective economic advantage, a 17 plaintiff must allege: 18 (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the 19 plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the 20 relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the 21 defendant. 22 CRST Van Expedited, Inc. v. Werner Enters., Inc., 479 F.3d 1099, 1108 (9th Cir. 2007) (quoting 23 Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1153 (2003)). A plaintiff must 24 also allege that the defendant’s conduct was independently wrongful, i.e., “wrongful by some 25 legal measure other than the fact of interference itself.” Della Penna v. Toyota Motor Sales, 26 U.S.A., Inc., 11 Cal. 4th 376, 393 (1995). 27 In its pending motion to dismiss, defendant ARI argues that plaintiff has failed to allege 28 (1) defendant ARI’s knowledge of plaintiff’s economic relationships, (2) actual disruption of an 1 economic relationship, and (3) that defendant ARI’s conduct was independently wrongful. (Doc. 2 No. 131-1 at 10–14.) Because the court finds that plaintiff has failed to allege defendant ARI’s 3 knowledge of plaintiff’s economic relationships, the court need not and does not consider 4 defendant’s remaining arguments. 5 Defendant ARI argues that, while plaintiff has alleged in the TAC its economic 6 relationships with the individual Tonn Cummins and with three delivery companies, plaintiff has 7 failed to allege that defendant ARI knew of any of these economic relationships. (Doc. No. 131-1 8 at 11); see also (Doc. No. 126 at ¶ 228 (“NVF had sold multiple Fedex delivery vans to the 9 following companies[:] KC Delivery Services, Inc., Millennium Express Home Delivery, Inc. 10 and Van Tastic.”)). In support of this argument, defendant ARI cites to decisions of both the 11 Ninth Circuit and several district courts that, according to defendant, have held similar allegations 12 to be insufficient to plead knowledge. (Doc. No. 131-1 at 11–12.) 13 In its opposition, plaintiff highlights two sets of allegations that it argues are sufficient to 14 plead defendant ARI’s knowledge. First, plaintiff notes that it has alleged that defendant ARI 15 “was well aware of the fact that NVF was a dealer in [FedEx] delivery vans and had established 16 good relationships with customers across the country.” (Doc. No. 126 at ¶ 222; see also Doc. 17 No. 143 at 10.) Second, plaintiff points out that it has alleged that after customer Tonn Cummins 18 complained regarding the incorrect mileage on a van he had purchased from plaintiff, plaintiff 19 relayed that complaint to defendant ARI. (Doc. No. 143 at 10.) 20 In this regard the allegations appearing in plaintiff’s TAC are similar to those held to be 21 conclusory and therefore insufficient by the many courts cited in defendant ARI’s pending motion 22 to dismiss. (Doc. No. 131-1 at 11–12) (citing, e.g., Trindade v. Reach Media Grp., LLC, No. 12- 23 cv-04759-PSG, 2013 WL 3977034 (N.D. Cal. July 31, 2013)). Plaintiff does not allege anywhere 24 in the TAC that defendant ARI knew of the three aforementioned delivery companies. While 25 plaintiff does now argue that it relayed Tonn Cummins’ complaint to defendant ARI, it is not 26 clear that the allegations in plaintiff’s TAC support this assertion. Rather, in the TAC, plaintiff 27 alleges only that it received the complaint from Cummins and that it then “began looking into the 28 issue and began complaining to the Auction Houses and ARI.” (Doc. No. 126 at ¶ 118.) 1 Ultimately, the only allegation in the TAC suggesting that defendant ARI knew of 2 plaintiff’s economic relationships is the allegation that defendant ARI “was well aware of the fact 3 that NVF was a dealer in [FedEx] delivery vans and had established good relationships with 4 customers across the country.” (Id. at ¶ 222.) Nonetheless, such an allegation is insufficient to 5 adequately plead the knowledge element of a claim for intentional interference with prospective 6 economic advantage. See Capitol W. Appraisals LLC v. Countrywide Fin. Corp., 467 Fed. 7 App’x. 738, 740 (9th Cir. 2012) (“The SAC merely states that [the defendant] had knowledge of 8 economic relationships between [the plaintiff] and mortgage brokers and lenders without any 9 further specific allegations. These conclusory statements . . . are insufficient to plead [the 10 defendant’s] knowledge.”); see also Infectolab Ams. LLC v. ArminLabs GmbH, No. 20-cv-03318- 11 VKD, 2021 WL 292182, at *4 (N.D. Cal. Jan. 28, 2021) (rejecting the plaintiff’s argument “that 12 the requisite knowledge may reasonably be inferred from the FAC’s allegations that [the 13 defendant] had prior dealings with [the plaintiff] and [the defendant’s] status as a competitor in 14 the industry”); Trindade, 2013 WL 3977034, at *17 & n.155 (N.D. Cal. July 31, 2013) (holding 15 that the allegation that a third-party defendant, as “a self-proclaimed publication expert, is well 16 aware of [the third-party plaintiff’s] strong reputation in the advertising industry and the existence 17 of these multiple contracts” was insufficient to plead knowledge). 18 Accordingly, defendant ARI’s motion to dismiss plaintiff’s intentional interference with 19 prospective economic advantage claim brought against it will be granted. 20 B. Defendant FedEx’s Motion to Dismiss 21 Plaintiff asserts six claims against defendant FedEx in its TAC. For each claim, plaintiff 22 pursues both direct and agency theories of liability. (Doc. No. 126.) In support of its claims that 23 are premised on an agency theory of liability, plaintiff has alleged that defendant ARI is liable on 24 each of the six claims asserted against defendant FedEx, that defendant ARI was an agent of 25 defendant FedEx, and that defendant FedEx is thus liable as the principal on each of those six 26 claims. (Id.) 27 First, the court will consider whether plaintiff has sufficiently alleged that defendant 28 FedEx is liable via an agency theory of liability for odometer fraud, intentional misrepresentation, 1 negligent misrepresentation, violations of 18 U.S.C. § 1962, breach of implied warranty, and 2 violation of the UCL (i.e., claims 1, 2, 3, 4, 6, and 7). The court will then consider whether 3 plaintiff has sufficiently alleged that defendant FedEx’s own conduct makes it directly liable to 4 plaintiff on each of those same claims. 5 1. Defendant FedEx’s Agency Liability for Claims 1, 2, 3, 4, 6, and 7 6 Defendant FedEx moves to dismiss plaintiff’s claims pursued via an agency theory of 7 liability only on the grounds that plaintiff has failed to sufficiently allege that defendant ARI was 8 an agent of defendant FedEx. (Doc. No. 134-1 at 10–15.) That is, defendant FedEx does not 9 argue that plaintiff has failed to allege that defendant ARI, its alleged agent, is liable as to each 10 relevant claim. Because the court will conclude that plaintiff has sufficiently alleged an agency 11 relationship, the court will deny defendant FedEx’s motion to dismiss claims 1, 2, 3, 4, 6, and 7 12 brought against it via an agency theory of liability. 13 Under California law, the features of an agency relationship are: 14 (1) An agent or apparent agent holds a power to alter the legal relations between the principal and third persons and the principal 15 and himself; (2) an agent is a fiduciary with respect to matters within the scope of the agency; and (3) a principal has the right to 16 control the conduct of the agent with respect to matters entrusted to him. 17 18 Garlock Sealing Techs., LLC v. NAK Sealing Techs. Corp., 148 Cal. App. 4th 937, 964 (2007) 19 (quoting Lewis v. Super. Ct., 30 Cal. App. 4th 1850, 1868–69 (1994)). 20 Defendant FedEx argues that plaintiff has failed to sufficiently allege that defendant ARI 21 was the agent of defendant FedEx and that, in truth, defendant ARI was a non-agent independent 22 contractor. (Doc. No. 134 at 10–15.) Defendant FedEx argues that the provisions in the FMSA 23 to which plaintiff cites in its TAC are standard contractual provisions that do not give defendant 24 FedEx any control over the conduct of defendant ARI, nor do those provisions permit defendant 25 ARI to alter any legal relations between defendant FedEx and anyone else. (Id. at 12–13.) 26 Defendant FedEx further cites to provisions in § 9 of the FMSA expressly disavowing control 27 over the conduct of defendant ARI. (Id. at 13–14; see also Doc. No. 122 at 6.) 28 ///// 1 In its opposition, plaintiff points out that the FMSA expressly identifies defendant ARI as 2 the agent of defendant FedEx for the purpose of selling vehicles. (Doc. No. 145 at 9–10; see also 3 Doc. No. 117 at 9 (noting that § 11(D) of the FMSA refers to “the time of the transfer of 4 ownership by ARI, as agent, from FedEx to the next succeeding owner”); see also Doc. No. 122 5 at 8 (same).) Plaintiff further argues that § 11(D) also undercuts defendant FedEx’s contention 6 that the FMSA outlines terms for the sale and transfer of title of the vehicles to defendant ARI, 7 rather than outlining any agency relationship. Instead, plaintiff argues that the use of the 8 language “the transfer of ownership . . . from FedEx to the next succeeding owner” strongly 9 implies that defendant FedEx intended only to use defendant ARI as an agent to transfer 10 ownership of the vehicles to third parties, such as plaintiff. (Doc. No. 145 at 10; see also Doc. 11 No. 147 at 10.) This system, plaintiff argues, outlines a consignment agreement where defendant 12 ARI is paid a fee for its services and defendant FedEx keeps the great majority of the profits 13 derived from the sale of each vehicle. (Doc. No. 145 at 11; see also Doc. No. 117 at 9.) Plaintiff 14 alleges that, for each vehicle, defendant ARI would execute an assignment of title on behalf of 15 defendant FedEx, and then a different ARI employee would countersign the assignment of title on 16 behalf of defendant ARI. (Doc. No. 126 at ¶ 66.) Defendant ARI would then turn around and 17 pass the title to a third party, such as plaintiff. (Id. at 14.) Plaintiff argues that defendant ARI 18 thereby held the power to alter legal relations between defendant FedEx and itself or third 19 persons. (Doc. No. 145 at 12.) Finally, plaintiff alleges that defendant ARI needed to check with 20 defendant FedEx before unwinding any vehicle sales and that defendant ARI consistently stated 21 that the sales could not be unwound because defendant FedEx refused to take the vehicles back. 22 (Doc. No. 126 at ¶ 116.) 23 The court finds that the new allegations appearing in plaintiff’s TAC nudge plaintiff’s 24 agency theory over the line of plausibility. In its TAC, plaintiff newly alleges that defendant ARI 25 could not unwind vehicle sales without defendant FedEx’s permission. (Doc. No. 126 at ¶ 116.) 26 More importantly, plaintiff newly alleges that defendant ARI routinely signed documents and 27 executed transfers of title as defendant FedEx. (Doc. No. 126 at ¶ 66.) Considering plaintiff’s 28 allegations as a whole, it now appears to be plausibly alleged that defendant FedEx had “the right 1 to control the conduct of [defendant ARI] with respect to matters entrusted to [it],” that defendant 2 ARI held the “power to alter the legal relations between [defendant FedEx] and third persons and 3 [defendant FedEx] and [itself]” as a fiduciary with respect to remarketing and resale, and 4 ultimately that an agency relationship existed. See Garlock Sealing Techs., 148 Cal. App. 4th at 5 964 (quoting Lewis, 30 Cal. App. 4th at 1868–69). 6 Accordingly, defendant FedEx’s motion to dismiss plaintiff’s claims brought against it via 7 an agency theory of liability for odometer fraud, intentional misrepresentation, negligent 8 misrepresentation, violation of 18 U.S.C. § 1962, breach of the implied warranty of 9 merchantability, and violation of the UCL will be denied. 10 2. Defendant FedEx’s Direct Liability for Claims 1, 2, 3, 4, 6, and 7 11 a. Claim 1: Odometer Fraud 12 A plaintiff “must allege that the defendant violated the Odometer Act with intent to 13 defraud as to mileage.” Bodine v. Graco, Inc., 533 F.3d 1145, 1151 (9th Cir. 2008); see also 49 14 U.S.C. § 578.6(f)(2). Because such a claim sounds in fraud, Rule 9(b) applies. Whitley Int’l Co., 15 Ltd. v. Pyne RV Rentals, Inc., No. 15-cv-02887-FMO-JPR, 2016 WL 3090322, at *5 (C.D. Cal. 16 May 31, 2016); see also Vess, 317 F.3d at 1103–04. Under the Odometer Act, if a vehicle’s 17 odometer is replaced, “the owner of the vehicle or agent of the owner shall attach a written notice 18 to the left door frame of the vehicle specifying the mileage before” the odometer was replaced. 19 49 U.S.C. § 32704(a). Additionally, “a person transferring ownership of a motor vehicle shall 20 give the transferee . . . [a] written disclosure” of “the cumulative mileage registered on the 21 odometer.” 49 U.S.C. § 32705(a)(1). 22 i. Whether Plaintiff Has Alleged an Omission with Particularity 23 Defendant FedEx argues that plaintiff has failed to allege any misrepresentation with the 24 particularity required by Rule 9(b). (Doc. No. 134-1 at 16.) Specifically, defendant FedEx 25 argues that plaintiff has failed to allege any misrepresentation connected to a specific vehicle, 26 time, and location. (Id.) In its opposition, plaintiff directs the court’s attention to dozens of 27 paragraphs of the TAC which, plaintiff argues, allege this exact information. (Doc. No. 145 at 28 16) (citing Doc. No. 126 at ¶¶ 48–92.) 1 The court finds that plaintiff has alleged an omission with the particularity required by 2 Rule 9(b). Defendant FedEx argues that plaintiff does not connect its alleged omission of the 3 sticker required by the Odometer Act with any specific vehicle (Doc. No. 134-1 at 16), but 4 defendant is incorrect in this regard. Plaintiff alleges that Asset 221846, bearing the 5 VIN 4UZA4FF40WC897670, was sold to plaintiff on June 1, 2017 with a bill of sale disclosing 6 the mileage as approximately 100,000 miles, even though defendants FedEx and ARI knew the 7 true mileage was over 350,000 miles and lacking the sticker specifying the vehicle’s mileage that 8 is required by the Odometer Act. (Doc. No. 126 at ¶¶ 68, 75 – 78, 93–96.) In this way, plaintiff 9 has alleged an omission with sufficient particularity. 10 ii. Whether Plaintiff Has Sufficiently Alleged Intent to Defraud 11 Intent to defraud may be alleged generally rather than with particularity. Fed. R. Civ. 12 P. 9(b). Nevertheless, defendant FedEx argues that plaintiff’s own allegations foreclose the 13 possibility that defendant FedEx acted with intent to defraud. (Doc. No. 134-1 at 16–17.) 14 Defendant FedEx argues that because plaintiff alleges that defendant FedEx shared the true 15 mileage data for each vehicle with defendant ARI, the party to whom each vehicle was sold, it is 16 not plausibly alleged by plaintiff that defendant FedEx was acting with intent to defraud by 17 omitting the required mileage sticker. (Id.) In support of its argument, defendant cites to two 18 decisions issued by district courts in other circuits many years ago, neither of which considered a 19 plaintiff’s allegations on a motion to dismiss. (See id. at 17) (citing Levine v. Ark-Les Switch 20 Corp., 451 F. Supp. 55, 57–58 (W.D. Penn. 1978) (finding that “the uncontradicted facts . . . 21 show that [the defendant] had no ‘intent to defraud’” on a motion for summary judgment); Mayes 22 v. Warren Hollon Motors, 410 F. Supp. 768, 770 (S.D. Ohio 1975) (“The Court cannot find on 23 this record that plaintiff has established by a preponderance of the evidence the requisite intent to 24 defraud.”)). Lastly, defendant FedEx argues in its reply brief that allegations of failing to place a 25 sticker on the vehicle can only satisfy the first element of an Odometer Act claim (i.e., that the 26 defendant violated the Act) and not the second (i.e., intent to defraud). (Doc. No. 152 at 12.) 27 The court concludes that plaintiff has sufficiently alleged intent to defraud on the part of 28 defendant FedEx. Plaintiff alleges that defendant FedEx used defendant ARI as its agent to sell 1 the vehicles; that defendant FedEx was aware of the true mileage on its vehicles; that defendant 2 FedEx failed to place stickers or accurately disclose the mileage on nearly one hundred vehicles 3 eventually sold to plaintiff alone; that mileage is the most important factor in determining a 4 vehicle’s price; and that defendant FedEx systematically accepted payments for double the true 5 value of the vehicles based on the inaccurate mileage disclosures. (Doc. No. 126 at ¶¶ 144–57.) 6 Plaintiff specifically alleges that defendant FedEx’s employees also signed certifications attesting 7 to inaccurate odometer mileage, despite those employees having access to the records containing 8 the accurate mileage of the vehicles. (Id. at ¶ 148.) Indeed, attachments to plaintiff’s FAC7 9 purport to show an employee for defendant FedEx attesting that the odometer on a vehicle 10 reflected the true mileage, when in fact the odometer had been replaced. (See Doc. No. 27 at 11 ¶ 56; see also Doc. No. 27-13 at 2.) 12 Defendant FedEx’s primary argument to the contrary, that there could be no intent to 13 defraud given plaintiff’s allegations that defendant FedEx provided defendant ARI with access to 14 records containing the true mileage data, is unavailing. Plaintiff is not asserting that defendant 15 FedEx had any intent to defraud defendant ARI; rather, plaintiff is contending that defendant 16 FedEx conspired with defendant ARI to defraud plaintiff. Plaintiff’s argument is that defendant 17 FedEx failed to place stickers on the vehicles with the knowledge and understanding that 18 defendant ARI would also fail to place stickers on the vehicles, permitting defendant FedEx to 19 reap much higher profits from vehicle sales than disclosure of the true mileage would have 20 permitted. 21 /////

22 7 In its pending motion, defendant FedEx requests that the court take judicial notice of Exhibits 23 D, F, G, and M attached to plaintiff’s FAC. “[A] court may take judicial notice of matters of public record.” Lee, 250 F.3d at 689 (internal quotations marks omitted). Plaintiff filed these 24 exhibits publicly on the docket. (See Doc. Nos. 27-4, 27-6, 27-7, 27-13.) Moreover, a plaintiff “cannot amend pleadings to directly contradict an earlier assertion made in the same proceeding.” 25 Airs Aromatics, LLC v. Victoria’s Secret Stores Brand Mgmt., Inc., 744 F.3d 595, 600 (9th Cir. 2014). Because plaintiff “swore to [the exhibits’] veracity” and “does not challenge the 26 [exhibits’] authenticity,” and “because any subsequent complaint must only allege facts consistent 27 with prior pleadings,” the court will take judicial notice of these exhibits. Wong v. Flynn-Kerper, No. 18-cv-04468-SJO-AFM, 2019 WL 4187375, at *4 & n.2 (C.D. Cal. May 16, 2019) (taking 28 judicial notice of an attachment to plaintiff’s prior amended complaint). 1 Considering the allegations of plaintiff’s TAC as a whole, the court concludes that 2 plaintiff has sufficiently alleged defendant FedEx’s intent to defraud. 3 iii. Whether Plaintiff Need Be in Privity with Defendant FedEx 4 It is unclear whether defendant FedEx is arguing that plaintiff has failed to allege that it 5 sold vehicles to plaintiff directly. (See Doc. No. 134-1 at 16.) In any event, “[c]ourts have found 6 that plaintiffs have standing to sue other transferors who are in the chain of ownership and who 7 have given a false odometer statement, even if there was no false statement made directly to the 8 plaintiff by those transferors.” Woytenko v. Ochoa, No. 19-cv-00413-TUC-DCB, 2021 WL 9 763879, at *1 (D. Ariz. Feb. 26, 2021); see also Ryan v. Edwards, 592 F.2d 756, 761–62 (4th Cir. 10 1979) (“The dispositive finding is the transferor’s intent to defraud, and [the plaintiff] may 11 recover the statutory damages from each transferor in his chain of title who made false mileage 12 statements with such intent.”). 13 As concluded above, plaintiff has sufficiently alleged that defendant FedEx violated the 14 Odometer Act with intent to defraud. Accordingly, defendant FedEx’s motion to dismiss 15 plaintiff’s Odometer Act claim brought against it on a theory of direct liability will be denied. 16 b. Claim 2: Intentional Misrepresentation or Omission 17 To state a claim for intentional misrepresentation or fraud by omission, a plaintiff must 18 allege: (1) misrepresentation (either false representation, concealment, or nondisclosure); (2) 19 knowledge of falsity; (3) intent to defraud; (4) justifiable reliance; and (5) resulting damage. 20 Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1163 (9th Cir. 2012); see also Lazar v. Super. 21 Ct., 12 Cal. 4th 631, 638 (1996). To state a claim for fraudulent concealment, a plaintiff must 22 additionally allege that the defendant was under a duty to disclose the concealed fact to the 23 plaintiff. Davis, 691 F.3d at 1163. A duty to disclose arises where the omission is material and 24 one of the four prongs identified by the court in LiMandri v. Judkins, 52 Cal. App. 4th 326 (1997) 25 ///// 26 ///// 27 ///// 28 ///// 1 is present. Hodsdon v. Mars, Inc., 891 F.3d 857, 863 (9th Cir. 2018).8 The four LiMandri prongs 2 are: (1) when the defendant is the plaintiff’s fiduciary; (2) when the defendant has exclusive 3 knowledge of a material fact; (3) when the defendant actively conceals a material fact; and (4) 4 when the defendant makes misleading partial representations. Hodsdon, 891 F.3d at 862. 5 Defendant FedEx argues that plaintiff has failed to allege any representations made to it at 6 all, let alone any false representations. (Doc. No. 134-1 at 18.) The court disagrees. As 7 discussed above, plaintiff has alleged concealment (defendant FedEx omitted the sticker from the 8 vehicle), knowledge of falsity (defendant FedEx knew that the odometer had been replaced and 9 that the displayed mileage was inaccurate), and intent to defraud plaintiff. (See, e.g., Doc. No. 10 126 at ¶¶ 173–76.) Plaintiff has further alleged justifiable reliance and resulting damages, in 11 asserting that it would not have purchased the vehicles for twice their value had defendant FedEx 12 placed the stickers on the vehicles and it would not then have also been forced to pay for 13 necessary repairs to the vehicles purchased. (Id. at ¶¶ 177–78.) Further, because plaintiff alleges 14 that defendant FedEx had exclusive knowledge of the vehicles’ true mileage and the replaced 15 odometers from its internal data, and that plaintiff lacked this knowledge, plaintiff has sufficiently 16 alleged that defendant FedEx had a duty to disclose the vehicles’ true mileage. (Id. at ¶ 174.) No 17 more is required. 18 Accordingly, defendant FedEx’s motion to dismiss plaintiff’s intentional 19 misrepresentation or omission claim brought against it on a theory of direct liability will be 20 denied. 21 c. Claim 3: Negligent Misrepresentation or Omission 22 Defendant FedEx argues that plaintiff has failed to state a claim for negligent 23 misrepresentation because an omission cannot give rise to a claim for nondisclosure and because 24 8 The Ninth Circuit’s decision in Hodsdon considered the duty to disclose in the context of 25 product defect cases involving manufacturers and consumers. 891 F.3d at 860–65. The Ninth Circuit also held that the plaintiff was required to allege that the product defect related to the 26 central functionality of the product. Id. It is unclear whether this element applies outside the 27 context of manufacturers and consumers. Ultimately, resolution of this motion to dismiss does not turn on whether this element is required to be alleged here, because plaintiff has sufficiently 28 alleged that the additional mileage on the vehicles relates to the vehicles’ central functionality. 1 plaintiff has not alleged any affirmative misrepresentations made to it. (Doc. No. 134-1 at 18.) In 2 its opposition, plaintiff does not dispute or address defendant’s argument that an omission cannot 3 give rise to a claim for negligent misrepresentation. (Doc. No. 145 at 21); see also Cheramie v. 4 HBB, LLC, 545 Fed. App’x. 626, 628–29 (9th Cir. 2013) (affirming the district court’s dismissal 5 of the plaintiff’s negligent misrepresentation claim because such a claim “requires an affirmative 6 representation and cannot be based on nondisclosures”) (citing Lopez v. Nissan N. Am., Inc., 201 7 Cal. App. 4th 572, 596 (2011)). 8 Instead, plaintiff argues that it has alleged affirmative misrepresentations, namely that 9 defendant FedEx allowed vehicles to be remarketed using inaccurate mileage readings. (Doc. 10 No. 145 at 21 (citing Doc. No. 126 at ¶ 188).) Plaintiff also points to allegations in its TAC that 11 defendant FedEx failed to affix stickers to the vehicles, failed to provide the required odometer 12 disclosures to defendant ARI, and failed to transmit the actual mileage information when the 13 vehicle was initially sold to defendant ARI. (Doc. No. 145 at 21) (citing Doc. No. 126 at ¶ 173). 14 The court concludes that plaintiff has failed to allege any affirmative misrepresentation by 15 defendant FedEx to plaintiff with the particularity required by Rule 9(b). The allegations in the 16 TAC to which plaintiff cites all describe omissions, not affirmative misrepresentations. Even if 17 plaintiff’s allegations described affirmative misrepresentations, they lack the specificity and the 18 “who, what, where, when, and why” required by Rule 9(b). See Vess, 317 F.3d at 1106. 19 Moreover, defendant FedEx’s alleged failures to provide odometer disclosures and actual mileage 20 information both relate to communications with defendant ARI, not with plaintiff. Accordingly, 21 defendant FedEx’s motion to dismiss plaintiff’s claim for negligent misrepresentation brought 22 against it on a theory of direct liability will be granted. 23 d. Claim 4: RICO Violations 24 The elements of a civil RICO claim under 18 U.S.C. § 1962(c) are: “(1) conduct (2) of an 25 enterprise (3) through a pattern (4) of racketeering activity (known as ‘predicate acts’) (5) causing 26 injury” to plaintiff’s business. Living Designs, Inc. v. E.I. Dupont de Nemours & Co., 431 F.3d 27 353, 361 (9th Cir. 2005) (citations omitted). 28 ///// 1 Defendant FedEx argues that plaintiff has failed to allege an enterprise between 2 defendants FedEx and ARI, predicate acts of wire or mail fraud, and a pattern of such activity. 3 (Doc. No. 134-1 at 19–21). In its opposition, plaintiff argues that the court ruled in the Prior 4 Order (Doc. No. 122) that all three of these elements were sufficiently alleged and therefore 5 denied defendant ARI’s motion to dismiss the RICO claims brought against it in the SAC. (Doc. 6 No. 145 at 22–23; see also Doc. No. 122 at 17–23.) Plaintiff notes that the relevant allegations as 7 to this claim are essentially unchanged in the TAC. (Doc. No. 145 at 22–23.) After reviewing 8 plaintiff’s allegations in its TAC and the Prior Order, the court agrees that plaintiffs have 9 sufficiently alleged enterprise, predicate acts, and a pattern of racketeering for reasons similar to 10 those addressed at length in the Prior Order. Nevertheless, below the court will also briefly 11 address the specific arguments raised by defendant FedEx in its pending motion. 12 Defendant FedEx makes three arguments. First, it argues that plaintiff has failed to allege 13 an enterprise because plaintiff has merely alleged a routine commercial relationship as 14 encapsulated in the FMSA. (Id. at 19) (citing Gomez v. Guthy-Renker, LLC, No. 14-cv-01425- 15 JGB-KK, 2015 WL 4270042, at *9 (C.D. Cal. July 13, 2015)). However, “[t]hat a legitimate 16 contractual relationship between the defendants exists does not undermine [plaintiff’s] plausible 17 allegations that defendants also engaged in an enterprise to defraud them and used the contractual 18 relationship as a cover.” LD v. United Behavioral Health, 508 F. Supp. 3d 583, 602 (N.D. Cal. 19 2020). Because plaintiff has alleged an enterprise to defraud purchasers such as plaintiff, 20 defendant FedEx’s argument on this point fails. 21 Second, defendant FedEx argues that plaintiff has failed to allege any predicate acts of 22 wire or mail fraud with the particularity required by Rule 9(b). (Doc. No. 134-1 at 19–20.) As 23 noted above, this same argument was rejected by the court in the Prior Order on the basis of 24 nearly identical allegations in plaintiff’s SAC. (See Doc. No. 122 at 19–21.) Here, plaintiff’s 25 allegations appearing in its TAC are again sufficient to allege the predicate acts of wire or mail 26 fraud. Plaintiff alleges that defendant ARI knowingly used interstate mail to send vehicle titles 27 containing inaccurate mileage statements to auction houses and to purchasers, and that defendant 28 ARI knowingly advertised the inaccurate condition reports online. (Doc. No. 126 at ¶¶ 89, 135, 1 137.) Plaintiff also alleges details regarding the sales of several individual vehicles. For instance, 2 defendant ARI requested the title for Asset 221846, VIN 4UZA4FF40WC897670, from 3 defendant FedEx in April 2017, then mailed the title for that vehicle to an auction house, then 4 used the auction house’s condition report in the online marketing of the vehicle, then sold the 5 vehicle to plaintiff at nearly twice the appropriate price given the vehicle’s true mileage on 6 June 1, 2017, and finally provided plaintiff with a bill of sale reflecting the inaccurate mileage. 7 (Id. at ¶¶ 68, 86–87, 93–96.) Plaintiff also alleges that, for instance, Assets 232266 and 227217 8 were similarly deceptively marketed and sold in January and May 2017, respectively. (Id. at 9 ¶¶ 98–101.) Taken together, the court concludes that plaintiff’s allegations remain sufficient to 10 allege the requisite predicate acts of mail or wire fraud. (See Doc. No. 122 at 19–21.) 11 Defendant FedEx compares plaintiff’s allegations to those found insufficient by the 12 district court in Committee. to Protect our Agricultural Water v. Occidental Oil & Gas Corp., 235 13 F. Supp. 3d 1132 (E.D. Cal. 2017) and the Ninth Circuit in Moore v. Kayport Package Express, 14 Inc., 885 F.2d 531 (1989). (Doc. No. 134-1 at 20.) These decisions are easily distinguishable 15 from the present case. In Occidental Oil, the plaintiffs did “not allege facts explaining how any 16 of the defendants’ claimed communications involved a misrepresentation . . . .” 235 F. Supp. 3d 17 at 1179. Here, by contrast, plaintiff’s allegations (as well as the Prior Order) repeatedly explain 18 how the condition reports and assignments of title contained misrepresentations. Similarly, in 19 Moore, the plaintiff “fail[ed] to specify the time, place, and content of the alleged mail and 20 securities fraud,” and “none of the RICO allegations identifie[d] the role of the individual 21 defendants in the alleged fraudulent scheme.” 885 F.2d at 541. Here, as described above, in its 22 TAC plaintiff has provided great detail about individual sales and misrepresentations, even 23 specifying the advertised mileage numbers versus the accurate ones, as well the role of each 24 defendant in the alleged scheme. (See, e.g., Doc. No. 126 at ¶¶ 98–101.) 25 Third, defendant FedEx argues that plaintiff’s allegations of vehicle sales in a single year, 26 more than six years ago, cannot support a reasonable inference of the continuity that is required in 27 order to allege a pattern of racketeering. (Doc. No. 134-1 at 21.) Defendant FedEx is correct that 28 a pattern generally requires the fraudulent conduct to last one year. Cf. Grimmett v. Brown, 75 1 F.3d 506, 512 (9th Cir. 1996) (noting that a pattern “cannot usually be proven unless the scheme 2 has been in existence for at least one year”). But as noted in the Prior Order, defendant FedEx 3 misdescribes plaintiff’s allegations; indeed, plaintiff alleges that it purchased 98 vehicles with 4 undisclosed odometer changes between 2013 and 2017. (Doc. No. 126 at ¶ 97; see also Doc. 5 No. 122 at 22.) This suffices for purposes of alleging a pattern. 6 Accordingly, defendant FedEx’s motion to dismiss plaintiff’s racketeering claim brought 7 against it via a theory of direct liability will be denied.9 8 e. Claim 6: Implied Warranty of Merchantability 9 Defendant FedEx next argues that plaintiff’s implied warranty claim must be dismissed 10 because it was not in privity with plaintiff. (Doc. No. 134-1 at 23); see also Clemens v. 11 DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir. 2008) (noting that “a plaintiff asserting 12 [implied] breach of warranty claims must stand in vertical contractual privity with the 13 defendant”). According to the allegations of plaintiff’s TAC, title to each vehicle was passed first 14 from defendant FedEx to defendant ARI and then from defendant ARI to plaintiff; nowhere in the 15 TAC does plaintiff allege that it bought a vehicle directly from defendant FedEx. 16 Plaintiff argues in its opposition that defendant FedEx was in privity with plaintiff because 17 plaintiff bought each vehicle from defendant FedEx’s agent. (Doc. No. 145 at 25.) Plaintiff cites 18 no authority suggesting any such agency exception to California’s privity requirement exists. Cf. 19 Shay v. Apple Inc., No. 20-cv-01629-GPC-BLM, 2021 WL 1733385, at *7 (S.D. Cal. May 3, 20 2021) (“Plaintiff merely alleges that the Apple gift card retailers ‘are agents of Defendants’ . . . . 21 Accordingly, Plaintiff has not alleged privity or any recognized privity exception adopted by the 22 Ninth Circuit or California courts.”). 23 Accordingly, defendant FedEx’s motion to dismiss plaintiff’s implied warranty claim 24 brought against it on a theory of direct liability will be granted. 25

9 Plaintiff also asserts a claim for conspiracy to commit racketeering in violation of 18 U.S.C. 26 § 1962(d). Defendant FedEx moves to dismiss plaintiff’s § 1962(d) conspiracy claim only on the 27 grounds that plaintiff has failed to allege a substantive violation of § 1962(c). (Doc. No. 134-1 at 23.) Because the court has found that plaintiff has sufficiently alleged a violation of § 1962(c), 28 defendant FedEx’s motion to dismiss the conspiracy claim will also be denied. 1 f. Claim 7: UCL Violations 2 California’s UCL prohibits “any unlawful, unfair or fraudulent business act or 3 practice . . . .” Cal. Bus. & Prof. Code § 17200. The three aforementioned “prongs” each 4 maintain a distinct theory of liability and basis for relief. Cel-Tech Commc’ns, Inc. v. Los 5 Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999); see also Lozano v. AT&T Wireless Servs., 6 Inc., 504 F.3d 718, 731 (9th Cir. 2007). The UCL unlawful prong “borrows violations of other 7 laws and treats them as unlawful practices that the [UCL] makes independently actionable.” 8 AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc., 28 Cal. App. 5th 923, 950 (2018) (citations 9 omitted). “Virtually any law—federal, state or local—can serve as a predicate for a [UCL 10 unlawful conduct] action.” Id. 11 Defendant FedEx argues that plaintiff’s UCL claim for unlawful, unfair, and fraudulent 12 conduct must be dismissed because plaintiff never identifies a particular business practice of 13 defendant FedEx’s, rather than defendant ARI’s, that violates the UCL. (Doc. No. 134-1 at 24.) 14 In its opposition, plaintiff argues that its UCL claim is properly predicated on its claims for 15 intentional misrepresentation, negligent misrepresentation, racketeering, and breach of implied 16 warranty. (Doc. No. 145 at 25–26.) 17 As described above, plaintiff has sufficiently alleged fraud by omission and racketeering 18 by defendant FedEx. Plaintiff has thereby sufficiently alleged unlawful, unfair, and fraudulent 19 conduct on the part of defendant FedEx. See, e.g., So v. HP, Inc., No. 22-cv-02327-BLF, 2023 20 WL 4596778, at *8, *12 (N.D. Cal. July 17, 2023) (holding that the plaintiff had stated a UCL 21 claim arising under the unlawful prong in part because he had sufficiently alleged fraud by 22 omission); Bias v. Wells Fargo & Co., 942 F. Supp. 2d 915, 934–36 (N.D. Cal. 2013) (holding 23 that the plaintiffs had stated a cognizable UCL claim arising under the fraudulent prong because 24 they had sufficiently alleged fraud by omission); In re Adobe Sys., Inc. Priv. Litig., 66 F. Supp. 3d 25 1197, 1227 (N.D. Cal. 2014) (explaining that the plaintiffs “need merely to show that the effects 26 of [the defendant’s] conduct ‘are comparable to or the same as a violation of the law’” to state a 27 claim arising under the unfair prong) (quoting Cel-Tech, 20 Cal. 4th at 187); see also MacDonald 28 v. Ford Motor Co., 37 F. Supp. 3d 1087, 1099 (N.D. Cal. 2014) (holding that the plaintiff had 1 sufficiently alleged unfair conduct under the balancing test for such because the defendant’s 2 alleged fraudulent omissions were “without utility” and thus did “not outweigh the harm [the 3 plaintiffs] suffered”). 4 Accordingly, defendant FedEx’s motion to dismiss plaintiff’s UCL claim brought against 5 it on a theory of direct liability will also be denied. 6 C. Leave to Amend 7 Leave to amend should be granted “freely” when justice so requires. Fed. R. Civ. 8 P. 15(a). Reasons “such as undue delay, bad faith or dilatory motive . . . repeated failure to cure 9 deficiencies . . . undue prejudice to the opposing party . . . [or] futility” may support denial of 10 leave to amend. Foman v. Davis, 371 U.S. 178, 182 (1962). 11 Plaintiff has not requested further leave to amend in its oppositions to the pending motions 12 to dismiss. The court notes that this is plaintiff’s fourth unsuccessful attempt to state a cognizable 13 claim for negligent misrepresentation and breach of implied warranty against defendant FedEx on 14 a direct theory of liability, as well as for intentional interference with prospective economic 15 advantage against defendant ARI. Additionally, plaintiff’s allegations regarding the lack of 16 privity foreclose any implied warranty claim against defendant FedEx. After considering the 17 minimal new allegations relating to these claims supplied in plaintiff’s TAC, the court concludes 18 that granting any further leave to amend would be futile. 19 Accordingly, plaintiff’s claim for negligent misrepresentation and breach of implied 20 warranty against defendant FedEx on a direct theory of liability, as well as for intentional 21 interference with prospective economic advantage against defendant ARI, will be dismissed 22 without leave to amend. 23 CONCLUSION 24 For the reasons explained above, 25 1. Defendant Automotive Rentals, Inc.’s (“ARI”) motion to dismiss (Doc. No. 131) is 26 granted in part and denied in part as follows: 27 a. Defendant ARI’s motion to dismiss plaintiff’s claim brought against it for 28 violation of 18 U.S.C. § 1962(a) is denied as having been rendered moot by 1 plaintiff’s express renouncement of any such claim; 2 b. Defendant ARI’s motion to dismiss plaintiff’s claim brought against it for 3 intentional interference with prospective economic advantage is granted, 4 without leave to amend; 5 2. Defendant Federal Express Corp.’s (“FedEx”) motion to dismiss (Doc. No. 134) is 6 granted in part and denied in part as follows: 7 a. Defendant FedEx’s motion to dismiss plaintiff’s claims for odometer fraud, 8 intentional misrepresentation, negligent misrepresentation, racketeering 9 and conspiracy to commit racketeering, breach of implied warranty, and 10 violation of California’s Unfair Competition Law, brought against 11 defendant FedEx on a theory of agency liability, is denied; 12 b. Defendant FedEx’s motion to dismiss plaintiff’s claims for odometer fraud, 13 intentional misrepresentation or omission, racketeering and conspiracy to 14 commit racketeering, and violation of California’s Unfair Competition 15 Law, brought against defendant FedEx on a theory of direct liability, is 16 denied; 17 c. Defendant FedEx’s motion to dismiss plaintiff’s claims for negligent 18 misrepresentation and breach of implied warranty brought against it on a 19 theory of direct liability is granted, without leave to amend; 20 3. Consistent with the court’s prior minute order (Doc. No. 158), the parties shall file 21 a joint status report with a proposed case schedule and pretrial dates no later than 22 twenty-one (21) days after the date of entry of this order. The court will issue a 23 pretrial scheduling order after receiving the parties’ status report; 24 4. Defendants ARI and FedEx shall file an answer responding to the remaining 25 claims asserted in plaintiff’s third amended complaint no later than twenty-one 26 (21) days after the date of entry of this order; and 27 5. The undersigned has reviewed the docket in this action, and defendant Federal 28 Express Corp. is erroneously listed twice, the second time as “Fedex Corporation.” 1 Defendant Automotive Rentals, Inc. is also erroneously listed twice, the second 2 time as “ARI, Inc.” Accordingly, the Clerk of the Court is directed to correct the 3 docket by removing the duplicative defendants, specifically “Fedex Corporation” 4 and “ARI, Inc.” 5 IT IS SO ORDERED. ° | Dated: _ January 17, 2024 Dal A. 2, sxe 7 DALE A. DROZD 3 UNITED STATES DISTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 26