Shaw v. Nissan North America, Inc.

220 F. Supp. 3d 1046, 2016 U.S. Dist. LEXIS 146997, 2016 WL 6205752
CourtDistrict Court, C.D. California
DecidedOctober 24, 2016
DocketCase No. CV 16-4372 DDP (RAOx)
StatusPublished
Cited by11 cases

This text of 220 F. Supp. 3d 1046 (Shaw v. Nissan North America, Inc.) 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
Shaw v. Nissan North America, Inc., 220 F. Supp. 3d 1046, 2016 U.S. Dist. LEXIS 146997, 2016 WL 6205752 (C.D. Cal. 2016).

Opinion

ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS

DEAN D. PREGERSON, United States District Judge

Before the court is Defendant Nissan North America, Inc.’s Motion to Dismiss Plaintiffs Kathy Shaw and Hartwell Steele’s Complaint. (Dkt. 20.) Having reviewed the parties’ submissions and heard oral argument, the court adopts the following Order.

I. BACKGROUND

This putative consumer class action arises out of allegations that Defendants Nissan North America, Inc. (“NNA”) and Nissan Jidosha Kabushiki d/b/a Nissan Moto Co., Ltd.’s . (“Nissan Japan”) (collectively “Nissan”) operated a Racketeer Influenced and Corrupt Organization Act (“RICO”) enterprise along with their supplier BorgWarner, Inc. (“BorgWamer”). (Compl. 111.) The pertinent facts, which the court assumes as true for purposes of this motion, are as follows.

NNA, along with its parent company Nissan Japan, designs, manufactures, sells, and maintains consumer automobiles. (Id. ¶¶ 19-21.) Among the vehicles Nissan produces are the: 2004-2008 Nissan Maxima vehicles, 2004-2009 Nissan Quest vehicles, 2004-2006 Nissan Altima vehicles (with the VQ35 engine), 2005-2007 Nissan Pathfinder vehicles, 2005-2007 Nissan Xterra vehicles, and 2005-2007 Nissan Frontier vehicles (with the VQ40 engine) (collectively “Subject Nissan Vehicles”). (Id. ¶ 2.) These vehicles are relevant to the present action because each of them contains an allegedly faulty timing chain tensioning system (TSTS). (Id.)

By way of background, the TOTS is component of a functioning internal combustion engine. (Id. ¶30.) As the Complaint succinctly explains:

It is responsible for connecting the engine’s camshaft to the crankshaft, which in turn control the opening and closing of the engine’s valves. These activities must occur at certain, specific time intervals. In particular, proper engine functioning requires that the valves open and close in a precise synchronized manner, which is coordinated with the up and down movement of the pistons. The timing chain system, including the Timing Chain Tensioning System is responsible for ensuring that this occurs.

(Id.) When the TCTS begins to fail, it damages the engine and leads to increased vehicle emissions and worsening fuel economy. (Id. ¶ 32.) If left unfixed, vehicles may have difficulty accelerating, maintaining speed, or idling smoothly, and the engine will ultimately fail. (Id.) In a. worst case scenario, the TCTS might fail while a vehicle is traveling at highway speeds causing the vehicle to lose speed and possibly be rear-ended or cause some other safety risk. (Id. ¶¶ 1Ó, 35.)

According to Plaintiffs, Nissan manufactured the Subject Nissan Vehicles knowing that there was a faulty TCTS and failed to disclose that problem to consumers. (Id. ¶ 42.) While a consumer might reasonably expect a TCTS to last more than ten years, the Nissan TCTSs were subject to failure earlier, which led to safety hazards and unexpected expenses for consumers who were forced to either repair the faulty system or sell their vehicle without repair at a substantial loss. (Id. ¶¶ 9, 10.) Two of these faulty Subject Nissan Vehicles were purchased by Plaintiffs in this action, Kathy Shaw and Hartwell Steele. (Id. ¶¶ 64-76.) Specifically, Ms. Shaw purchased a new 2007 Nissan Pathfinder, which re[1051]*1051quired a TCTS repair by 2015, and Mr. Steele purchased a used 2005 Nissan Xter-ra, which failed in 2015 while he was driving on the highway. (Id.)

Plaintiffs are not the only ones to have purchased Nissan vehicles with faulty TCTSs. Nissan is currently involved in a separate consumer class action, also pending before this Court, which asserts claims for violations of various consumer protection statutes, fraud, and unjust enrichment on the basis of substantially similar facts. See Falco v. Nissan N. Am. Inc., No. CV 13-00686 DDP (MANx), 2013 WL 5575065, at *2 (C.D. Cal. Oct. 10, 2013). Plaintiffs here, however, rely on a different cause of action and bring this suit for alleged violations of the Racketeer Influenced Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968.

According to Plaintiffs, by 2003, Nissan had learned of the defect in the TCTS. (Compl. ¶39.) By then, BorgWarner, the company that manufactured and supplied Nissan with the TCTS at issue here, had also learned of the defect. (Id ¶¶ 40-41.) Each company conducted their own testing to confirm the nature of the defect and shared those results with each other. (Id ¶ 41.) Plaintiffs further allege that Nissan’s knowledge of the defect can be inferred from both the Technical Service Bulletins (“TSBs”) the company issued to its dealerships beginning in 2007, which instructed dealers to repair certain TCTS components, (Id. ¶ 51), and from the fact that Nissan had actually redesigned a component of the TCTS in 2006 or 2007.

Rather than communicate the TCTS defect to consumers, Plaintiffs allege that Nissan and BorgWarner instead formed an “association-in-fact enterprise,” which Plaintiffs refer to as the Timing Chain Tensioning System" Defect Enterprise (“Defect Enterprise”). (Id. ¶ 104.) The “common purpose” of the Defect Enterprise was “to design, manufacture, distribute, test, and sell Subject Nissan Vehicles equipped with the defective [TCTS] to Plaintiffs and other members of the Class, and thereby maximize 'the revenue and profitability.” (|d ¶ 108.) At the same time, the Defect Enterprise agreed to “conceal the scope and nature of the [TCTS] defects” in order to continue profiting and avoid incurring any expenses associated with repairing the defect, recalling the product, or addressing investigations by federal regulators. (Id. ¶ 110.) While the specifics of these communications remain somewhat unclear, Plaintiffs allege that conspiracy was coordinated by mail or wire, in violation of federal mail and wire fraud statutes. Plaintiffs also allege that the issuance of the TSBs were part of the effort to continue concealing the defect from consumers. (Id. ¶¶ 112-13.)

II. LEGAL STANDARD

A complaint will survive a motion to dismiss when it contains “sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). When considering a Rule 12(b)(6) motion, a court must “accept as true all allegations of material fact and must construe those facts in the light most favorable to the plaintiff.” Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint need not include “detailed factual allegations,” it must offer “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Conclusory allegations or allegations that are no more than a statement of a legal conclusion “are not entitled to the assumption of truth.” Id. at 679, 129 S.Ct. 1937. In other words, a pleading that [1052]*1052merely offers “labels and conclusions,” a “formulaic recitation of the elements,” or “naked assertions” will not be sufficient to state a claim upon which relief can be granted. Id.

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Cite This Page — Counsel Stack

Bluebook (online)
220 F. Supp. 3d 1046, 2016 U.S. Dist. LEXIS 146997, 2016 WL 6205752, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shaw-v-nissan-north-america-inc-cacd-2016.