1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MONTEVILLE SLOAN, et al., Case No. 16-cv-07244-EMC
8 Plaintiffs, ORDER GRANTING DEFENDANT’S 9 v. MOTION TO DISMISS PLAINTIFF SZEP’S CLAIMS IN THE FIFTH 10 GENERAL MOTORS LLC, AMENDED COMPLAINT 11 Defendant. Docket No. 158
12 13 14 I. INTRODUCTION 15 Plaintiffs allege that Defendant General Motors (“GM”) knowingly manufactured and sold 16 a car engine with inherent defects that caused excessive oil consumption and engine damage. The 17 defects affect 2010 to 2014 model-year GM vehicles. Based on those allegations, Plaintiffs assert 18 claims under various state consumer-protection and fraud statutes on behalf of a nationwide class 19 as well as twenty-nine statewide classes. Plaintiffs’ original class action complaint was filed in 20 December 19, 2016. Docket No. 2. They have since amended their pleadings several times, and 21 the operative complaint is the Fifth Amended Complaint (“5AC”). Docket No. 157. Before the 22 Court is Defendant’s Motion to Dismiss Plaintiff Szep’s Claims in the Fifth Amended Complaint. 23 Docket No. 158. 24 II. BACKGROUND 25 A. Factual Background 26 Although individual Plaintiffs’ discussion of the alleged defects’ impact on their own 27 vehicles has evolved somewhat since prior complaints, the core factual background of this case 1 “Oil Consumption Defect.” 5AC ¶ 7. The engine was installed in each of the Class Vehicles: the 2 2010-2014 Chevrolet Avalanche; 2010-2012 Chevrolet Colorado; 2010-2013 Chevrolet Express; 3 2010-2013 Chevrolet Silverado; 2010-2014 Chevrolet Suburban; 2010-2014 Chevrolet Tahoe; 4 2010-2013 GMC Canyon; 2010-2013 GMC Savana; 2010-2013 GMC Sierra; 2010-2014 GMC 5 Yukon; and the 2010-2014 GMC Yukon XL. Id. ¶ 2. 6 Plaintiffs identify five defects that “contribute” to the overall “Oil Consumption Defect.” 7 Id. ¶ 7–13. First, the “primary cause” is “piston rings . . . [that] do not maintain sufficient tension 8 to keep oil in the crankcase.” Id. ¶ 8. Second, the Active Fuel Management (AFM) system 9 “contributes” to the defect by “spraying oil directly at the piston skirts,” which “overloads and 10 fouls the defective piston rings, triggering oil migration past the rings.” Id. ¶ 9. Third, the PCV 11 system “vacuums oil from the valvetrain into the intake system, where it is ultimately burned in 12 the combustion chambers” contributing to excessive oil combustion. Id. ¶ 10. Fourth, the 13 defective “Oil Life Monitoring System” does not monitor oil level, but rather, engine conditions 14 like revolutions and temperature to predict oil quality. Id. ¶ 11. Because it does not take oil level 15 into account, the system “directs drivers to travel thousands of miles with inadequate engine 16 lubricity levels, wearing out and damaging moving internal engine components.” Id. Fifth, the oil 17 pressure gauge “does not provide any indication as to when the oil pressure . . . falls to levels low 18 enough to damage internally lubricated parts or cause engine failure” and the oil canister symbol 19 does not illuminate “until well past the time when the Class Vehicles are critically oil starved.” Id. 20 ¶ 13. Furthermore, plaintiffs contend that “oil migration from the Oil Consumption Defect fouls 21 spark plugs no matter how often drivers top off their oil levels.” Id. ¶ 14. This problem can, in 22 turn, cause “engine misfires and shutdown events.” Id. 23 Plaintiffs allege that, GM “instructed its dealers to address the excessive oil loss problem 24 . . . by performing stop-gap fixes . . . [and] decarbonize[ing] combustion chambers and rings with 25 chemical abrasives,” id. ¶ 15, an approach which “failed to provide a complete, and adequate, 26 remedy for the Oil Consumption Defect that has plagued – and continues to plague – each of the 27 Class Vehicles.” Id. In 2014, GM replaced the Generation IV Vortec 5300 Engine with a 1 problem plaguing the Class Vehicles.” Id. ¶ 16. Plaintiffs contend, however, that the change “did 2 nothing for the owners and lessees of the Class Vehicles, namely, Plaintiffs and the other Class 3 members . . . [who] remain saddled with their defective Generation IV Vortec 5300 Engines with 4 no relief from GM.” Id. ¶ 17. Those owners and lessees were “damaged in that they paid more 5 for their Class Vehicles than they would have paid had they known about the defect that GM 6 failed to disclose, or they would not have purchased or leased their Class Vehicles at all.” Id. ¶ 20. 7 Plaintiffs allege that “GM has long known of the Oil Consumption Defect and the resulting 8 engine damage.” Id. ¶ 18. They point to the “extraordinary number of complaints” GM received 9 about excessive oil consumption and GM’s issuance of “Technical Service Bulletins” to dealers 10 addressing problems with excessive oil consumption as evidence of the company’s knowledge. 11 Id. However, Plaintiffs contend that “[d]espite this knowledge, GM continued selling and leasing 12 Class Vehicles without ever disclosing the Oil Consumption Defect. Indeed, GM has never 13 disclosed the Oil Consumption Defect to consumers.” Id. ¶ 19. 14 Turning to Thomas Szep’s claims in particular, he is a resident of Mayfield, Ohio, id. ¶ 15 155, who “owns a 2011 Chevrolet Silverado, equipped with a Generation IV Vortec 5300 Engine. 16 Mr. Szep purchased his Silverado from Tim Lallie Chevrolet in Bedford Heights, Ohio,” id. ¶ 156. 17 He alleges that “GM failed to disclose the Oil Consumption Defect to [him] before he purchased 18 his Silverado, despite GM’s knowledge of the defect, and [he], therefore, purchased his Silverado 19 with the incorrect understanding that it would be a reliable vehicle.” Id. ¶ 157. As summarized in 20 Defendant’s Motion to Dismiss Plaintiff Szep’s Claims in the Fifth Amended Complaint, “Szep 21 attempts to bring five claims under Ohio law: (1) violation of the Ohio Consumer Sales Practices 22 Act, Ohio Rev. Code Ann. §§ 1345.01, et seq. (Count 93); (2) breach of express warranty, Ohio 23 Rev. Code Ann. §§ 1302.26 and 1310.17 (Count 94); (3) breach of implied warranty in tort (Count 24 95); (4) fraudulent omission (Count 96); and (5) unjust enrichment (Count 97). Szep also joins in 25 Plaintiffs’ nationwide claim under the Magnuson Moss Warranty Act (“MMWA”), but admits . . . 26 he is re-stating this dismissed claim only to preserve it for appeal.” Motion to Dismiss Plaintiff 27 Szep’s Claims in the Fifth Amended Complaint (“MTD”) at 1, Docket No. 158. 1 B. Procedural Background 2 Plaintiffs all “purchased or leased one or more model year 2010-2013 GM vehicles fitted 3 with GM’s defective Generation IV 5.3 Liter V8 Vortec 5300 engines.” 5AC at 2. The named 4 plaintiffs bring their claims on behalf of a nationwide class and also seek to represent the 5 following statewide classes: 6 Named Plaintiff State of Intended Representation Raul Siqueiros California 7 Todd and Jill Cralley Joseph Brannan Alabama 8 Larry Goodwin Arkansas 9 Marc Perkins Delaware Thomas Shorter Florida 10 Derick Bradford Georgia Gabriel Del Valle Idaho 11 Kevin Hanneken Illinois 12 Katelyn Doepel and Edwin Doepel III Dan Madson Kansas 13 James Faulkner Kentucky 14 Joseph Olivier Louisiana Scott Smith Massachusetts 15 Ross Dahl Minnesota Drew Peterson 16 Michael Ware Mississippi 17 Steve Kitchen Missouri John Knoll New Jersey 18 Barbara Molina New Mexico Dennis Vita New York 19 William Davis, Jr. North Carolina 20 Thomas Szep Ohio Mike Warpinski Oklahoma 21 William Martell Oregon John Graziano Pennsylvania 22 Monteville Sloan, Jr. South Carolina 23 Joshua Byrge Tennessee Rudy Sanchez Texas 24 Christopher Thacker Virginia Kelly Harris Washington 25 James Robertson West Virginia 26 Jonas Bednarek Wisconsin 27 Id. at 58–60. 1 First Amended Complaint (“FAC”) in February 2017, see Docket No. 29. The named plaintiffs 2 who filed the original complaint sought to represent classes from thirteen states. Id. at 25–26. On 3 August 1, 2017, the Court dismissed the FAC in its entirety with leave to amend. See Docket No. 4 62 (“FAC Order”). Later that same month, Plaintiffs filed a Second Amended Complaint 5 (“SAC”), see Docket No. 67, which added named plaintiffs from twenty additional states, id. at 6 55–56. After extensive briefing, the Court dismissed the Second Amended Complaint in part. See 7 Docket No. 99 (“SAC Order”). In March 2018, Plaintiffs filed a Third Amended Complaint 8 (“TAC”), see Docket No. 107, which added a plaintiff from one additional state, id. at 11. 9 Plaintiffs subsequently sought leave to file a Fourth Amended Complaint (“4AC”), see Docket No. 10 120 (“First Mot. for Leave”), in order to “substitute William Davis, Jr., a member of the putative 11 North Carolina class, in place of the current North Carolina class representative, Steven Ehrke, 12 who is no longer able to participate in this litigation.” First Mot. for Leave at 1. No other change 13 to the complaint was sought. Id. The Court granted the parties’ joint stipulation to the filing of a 14 Fourth Amended Complaint, permitting substitution of the North Carolina class representative. 15 See Docket No. 122. After filing a Fourth Amended Complaint in November 2018, see Docket 16 No. 123, Plaintiffs again sought leave to file a Fifth Amended Complaint in May 2019, see Docket 17 No. 141 (“Second Mot. for Leave”). The purpose behind the request to file a Fifth Amended 18 Complaint was the substitution of “Thomas Szep in place of the current Ohio class representatives, 19 Thomas Gulling and Ronald Jones, who are for personal reasons no longer able to participate in 20 this litigation.” Second Mot. for Leave at 1. No other modification of the Fourth Amended 21 Complaint was sought. Id. 22 Defendant opposed Plaintiffs’ Motion for Leave to File a Fifth Amended Complaint, see 23 Docket No. 153 (“Opposition to 5AC”), on the grounds that “add[ing] an Ohio plaintiff . . . comes 24 too late and would be unfair and prejudicial to GM based on the history of this case and governing 25 legal standards.” Opposition to 5AC at 1. More specifically, GM argued that “[c]hanging the 26 parties and allegations after discovery is closed would deprive GM of the ability to fully defend 27 itself. It would embroil the court again in pleadings and motions practice, upheave the current 1 July 2, 2019, the Court granted Plaintiffs’ Motion for Leave to File a Fifth Amended Complaint. 2 See Docket No. 156. Plaintiffs filed a Fifth Amended Complaint that same day, see Docket No. 3 157, and Defendant subsequently filed a Motion to Dismiss Plaintiff Szep’s Claims in the Fifth 4 Amended Complaint, see Docket No. 158. 5 As noted in the Court’s prior orders, in order to address manageability concerns raised by 6 the Court, the parties agreed that Plaintiffs’ initial motion for class certification would be limited 7 to five bellwether states: California, New Jersey, Ohio, North Carolina, and Texas. See Docket 8 No. 113. A Motion to Certify the Class was filed with the Court on September 3, 2019. See 9 Docket No. 175. A hearing on the issue of class certification and GM’s Motion for Partial 10 Summary Judgment is scheduled to take place on January 16, 2020. See Docket Nos. 175, 184. 11 III. DISCUSSION 12 A. Legal Standard 13 Defendants move to dismiss the claims of Ohio class representative Plaintiff Szep for lack 14 of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) and for failure to state a 15 claim under Federal Rule of Civil Procedure 12(b)(6). MTD at 1–3. Under Rule 12(b)(2), a 16 plaintiff bears the burden of establishing personal jurisdiction. Schwarzenegger v. Fred Martin 17 Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). “The parties may submit, and the court may 18 consider, declarations and other evidence outside the pleadings in determining whether it has 19 personal jurisdiction.” Kellman v. Whole Foods Mkt., Inc., 313 F. Supp. 3d 1031, 1042 (N.D. Cal. 20 2018) (citing Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001)). “Where not directly 21 controverted, plaintiff’s version of the facts is taken as true for the purposes of a 12(b)(2) motion,” 22 and “conflicts between the facts contained in the parties’ [evidentiary submissions] must be 23 resolved in [plaintiff’s] favor.” Unocal Corp., 248 F.3d at 922 (quoting AT&T Co. v. Compagnie 24 Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996)). 25 Federal Rule of Civil Procedure 8(a)(2) requires a complaint to include “a short and plain 26 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A 27 complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil 1 after the Supreme Court’s decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic 2 Corp. v. Twombly, 550 U.S. 544 (2007), a plaintiff’s “factual allegations [in the complaint] ‘must 3 . . . suggest that the claim has at least a plausible chance of success.’” Levitt v. Yelp! Inc., 765 4 F.3d 1123, 1135 (9th Cir. 2014). The court “accept[s] factual allegations in the complaint as true 5 and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. 6 Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But “allegations in a 7 complaint . . . may not simply recite the elements of a cause of action [and] must contain sufficient 8 allegations of underlying facts to give fair notice and to enable the opposing party to defend itself 9 effectively.” Levitt, 765 F.3d at 1135 (internal quotation marks omitted).1 “A claim has facial 10 plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable 11 inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The 12 plausibility standard is not akin to a probability requirement, but it asks for more than a sheer 13 possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted). 14 B. Analysis 15 1. Specific Personal Jurisdiction 16 “Personal jurisdiction must exist for each claim asserted against a defendant.” Action 17 Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004) (citing Data Disc, 18 Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1289 n. 8 (9th Cir.1977)). Since the Supreme 19 Court’s “seminal decision in International Shoe,” courts “have recognized two types of personal 20 jurisdiction: ‘general’ (sometimes called ‘all-purpose’) jurisdiction and ‘specific’ (sometimes 21 called ‘case-linked’) jurisdiction.” Bristol-Myers Squibb Co. v. Superior Court of California, San 22 Francisco Cty., 137 S. Ct. 1773, 1779–80 (2017). 23 “[O]nly a limited set of affiliations with a forum will render a defendant amenable to 24 general jurisdiction.” Id. at 1780 (quoting Daimler AG v. Bauman, 571 U.S. 117, 137 (2014)). 25 Plaintiffs do not contend that the Court has general jurisdiction over GM. A court may exercise 26
27 1 A court “need not . . . accept as true allegations that contradict matters properly subject to 1 general jurisdiction over a corporation in its “place of incorporation . . . [or] principal place of 2 business.” Daimler, 571 U.S. at 137. Plaintiffs note in their Fifth Amended Complaint that GM 3 “is a Delaware limited liability company, with its principal place of business . . . [in] Detroit, 4 Michigan.” 5AC ¶ 227. They also acknowledge that GM is therefore “a citizen of Delaware and 5 Michigan.” Id. Thus, there is no contention that the Court has general jurisdiction over GM. 6 As the Court noted in its previous Order, whether the Court may assert specific jurisdiction 7 over a nonresident defendant “focuses on the relationship among the defendant, the forum, and the 8 litigation.” See SAC Order at 9 (quoting Axiom Foods, Inc. v. Acerchem Int’l, Inc., 874 F.3d 9 1064, 1068 (9th Cir. 2017) (internal quotation marks and citation omitted)). For specific 10 jurisdiction to exist, “the defendant’s suit-related conduct must create a substantial connection 11 with the forum State.” Axiom Foods, 874 F.3d at 1068 (internal quotation marks and citation 12 omitted). Three requirements must be met: “(1) the defendant must either purposefully direct his 13 activities toward the forum or purposefully avail himself of the privileges of conducting activities 14 in the forum; (2) the claim must be one which arises out of or relates to the defendant‘s forum- 15 related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial 16 justice, i.e., it must be reasonable.” Id. (internal quotation marks and citation omitted). 17 In their Complaint, Plaintiffs broadly assert that this Court has (specific) personal 18 jurisdiction over GM “because GM has purposefully availed itself of the privilege of conducting 19 business in the State of California by advertising and selling its manufactured vehicles (including 20 the Class Vehicles) within the State of California. Additionally, GM has maintained systematic 21 and continuous business contacts with the State of California and is registered to conduct business 22 in this State.” 5AC ¶ 22. While these allegations may establish jurisdiction over claims asserted 23 by California resident plaintiffs, GM’s advertisements, sales, and commercial conduct in 24 California may not suffice to furnish personal jurisdiction over out-of-state plaintiffs such as 25 Plaintiff Szep of Ohio. The Complaint does not allege that Mr. Szep purchased his car in 26 California, was injured in California, or otherwise had any connection to GM’s activities in 27 California. To the contrary, the Complaint merely notes that Mr. Szep “is a resident of Mayfield, 1 ¶¶ 155–56. In light of these facts, Plaintiffs appear to concede that there is no independent 2 relationship between Plaintiff Szep’s Ohio state law claims and the State of California. See 3 Plaintiffs’ Opposition to General Motors’ Motion to Dismiss Plaintiff Szep’s Claims (“Opp.”) at 3, 4 Docket No. 161. Instead, Plaintiffs ask the Court—as they have done with prior Complaints—to 5 exercise pendent personal jurisdiction over Mr. Szep’s claims. See id. Defendants challenge that 6 request in the wake of the Supreme Court’s decision in Bristol-Myers. 7 In Bristol-Myers, plaintiffs from around the country sued Bristol-Myers Squibb Company 8 (BMS) in California state court, alleging that its drug Plavix damaged their health and violated, 9 inter alia, California products liability, negligent misrepresentation, and misleading advertising 10 laws. BMS itself was an out-of-state defendant, incorporated in Delaware and headquartered in 11 New York. It sold Plavix in California and engaged in other business activities there, but it “did 12 not develop Plavix in California, did not create a marketing strategy for Plavix in California, and 13 did not manufacture, label, package, or work on the regulatory approval of the product in 14 California.” 137 S.Ct. at 1778. The California Supreme Court had nevertheless reasoned that the 15 exercise of specific jurisdiction over the out-of-state plaintiffs’ claims was reasonable under its 16 “sliding scale approach to specific jurisdiction” under which “the more wide ranging the 17 defendant’s forum contacts, the more readily is shown a connection between the forum contacts 18 and the claim” because the claims by all plaintiffs were “based on the same allegedly defective 19 product and the assertedly misleading marketing and promotion of that product.” Id. at 1779 20 (quotations and citations omitted). 21 The U.S. Supreme Court disagreed. That Court emphasized that the interests to be 22 considered in determining whether personal jurisdiction exists include “the interests of the forum 23 State and of the plaintiff in proceeding with the cause in the plaintiff’s forum of choice,” but that 24 the “primary concern is the burden on the defendant.” Id. at 1780 (quotations and citations 25 omitted). This analysis “obviously requires a court to consider the practical problems resulting 26 from litigating in the forum, but it also encompasses the more abstract matter of submitting to the 27 coercive power of a State that may have little legitimate interest in the claims in question.” Id. As 1 territorial limitations on the power of the respective States,” as “[t]he sovereignty of each 2 State . . . implie[s] a limitation on the sovereignty of all its sister states.” Id. at 1780 (citations and 3 quotations omitted). These federalism concerns underpinned Bristol-Myers. 4 Because of these significant interstate federalism concerns, the Supreme Court rejected the 5 notion that mere factual or legal similarity between the California plaintiffs’ claims and the non- 6 resident plaintiffs’ claims somehow sufficed to create personal jurisdiction. “The mere fact that 7 other plaintiffs were prescribed, obtained, and ingested Plavix in California—and allegedly 8 sustained the same injuries as did the nonresidents—does not allow the State to assert specific 9 jurisdiction over the nonresidents’ claims.” Id. at 1781. Rather, “[w]hat is needed . . . is a 10 connection between the forum and the specific claims at issue.” Id. The plaintiffs could not 11 demonstrate such a connection with respect to the out-of-state plaintiffs because defendant had not 12 done anything related to their claims in California. Accordingly, the Supreme Court held that 13 California state courts lacked specific personal jurisdiction over out-of-state defendants for claims 14 brought by out-of-state plaintiffs, where there were no sufficient contacts between defendants’ 15 conduct in connection with those claims and the forum state, California. Id. at 1782-83. This 16 conclusion was driven by the limitations of state sovereignty. Indeed, before analyzing the lack of 17 a connection between California and the nonresident plaintiffs’ claims, the Supreme Court 18 emphasized that “at times, [the] federalism interest may be decisive” in the personal jurisdiction 19 analysis. Id. at 1780 (quotation omitted). It noted that, “[e]ven if the defendant would suffer 20 minimal or no inconvenience from being forced to litigate before the tribunals of another State; 21 even if the forum State has a strong interest in applying its law to the controversy; even if the 22 forum State is the most convenient location for litigation, the Due Process Clause, acting as an 23 instrument of interstate federalism, may sometimes act to divest the State of its power to render a 24 valid judgment.” Id. at 1780-81 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 25 286, 293 (1980) (alteration in original, emphasis added)). 26 2. The Existence of Federal Question Jurisdiction 27 In its previous Order, the Court exercised pendent personal jurisdiction over other non- 1 examined the Supreme Court’s reasoning in Bristol-Myers and concluded (as courts both before 2 and after the Court’s prior order have done2 that a “categorical extension” of the case’s holding to 3 federal courts was not warranted. Id. at 12. It noted that the Supreme Court’s decision was 4 “animated by unique interstate federalism concerns,” and that “due process analysis differs 5 fundamentally when a case is pending in federal court” (especially “where a federal court presides 6 over litigation involving a federal question”). In that context, concerns about state sovereignty do 7 not arise in the same way. Id. at 12, 13. However, the Court premised much of its decision on the 8 existence of federal question jurisdiction; the Court specifically reserved the question “whether 9 and how Bristol-Myers would apply if jurisdiction arose exclusively on the basis of diversity.” Id. 10 at 13 n.2. 11 It has since become clear that there is no federal question furnishing federal question 12 jurisdiction as it relates to Plaintiff Szep’s claims. For one thing, federal question jurisdiction is 13 not pled by Plaintiffs. See 5AC at 6 (“This Court has diversity jurisdiction over this action . . . .”). 14 In addition, while claims brought under the Magnuson Moss Warranty Act confer federal 15 question jurisdiction, see, e.g., Arutunian v. Mercedes-Benz USA, LLC, No. 16 CV186806DMGRAOX, 2018 WL 6617636, at *3 (C.D. Cal. Dec. 17, 2018) (“the Court has 17 federal question jurisdiction over Plaintiff’s MMWA claims”); Luna v. BMW of N. Am., LLC, No. 18 317CV02067BENKSC, 2018 WL 2328365, at *4 (S.D. Cal. May 22, 2018) (“the Court has 19 federal question jurisdiction over the MMWA claim”), Plaintiff Szep has no viable Magnuson 20 Moss Warranty Act Claim. The Court previously dismissed the express warranty claims of the 21 Ohio Plaintiffs (one possible basis for the MMWA claims), see FAC Order at 16, and Plaintiff 22 Szep has included those express warranty claims only for the purpose of preserving them for 23 2 See, e.g., Fabricant v. Fast Advance Funding, LLC, No. 217CV05753ABJCX, 2018 WL 24 6920667, at *4 (C.D. Cal. Apr. 26, 2018); In re Packaged Seafood Prod. Antitrust Litig., 338 F. Supp. 3d 1118, 1172 (S.D. Cal. 2018); Thomas v. Kellogg Co., No. C13-5136RBL, 2017 WL 25 5256634, at *1 (W.D. Wash. Oct. 17, 2017) (“It is therefore not at all clear that Bristol Myers even applies to this case, filed in federal district court.); Broomfield v. Craft Brew All., Inc., No. 17-CV- 26 01027-BLF, 2017 WL 3838453, at *15 (N.D. Cal. Sept. 1, 2017), on reconsideration in part, No. 17-CV-01027-BLF, 2017 WL 5665654 (N.D. Cal. Nov. 27, 2017) (“The Bristol-Myers majority 27 made clear that “since this decision concerns the due process limits on the exercise of specific 1 appeal, see 5AC at 63 n.40. In addition, the Court previously dismissed the implied warranty 2 claims of the Ohio Plaintiffs (the other possible basis for the MMWA claims), see SAC Order at 3 45, and because Plaintiff Szep pleads an identical implied warranty claim here, compare SAC at 4 171 with 5AC at 178, that claim likewise does not furnish a basis for a viable MMWA claim. 5 Thus, lacking any viable warranty claim, Plaintiff Szep has no viable MMWA claim. 6 Plaintiff Szep has also failed to fulfill the requirements of a cognizable Magnuson Moss 7 Warranty Act class action claim. According to the text of the MMWA statute: 8 No claim shall be cognizable in a suit brought under paragraph (1)(B) of this subsection [pertaining to cases filed in “an 9 appropriate district court of the United States”] –
10 (A) if the amount in controversy of any individual claim is less than the sum or value of $25; 11 (B) if the amount in controversy is less than the sum or 12 value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this 13 suit; or
14 (C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred. 15 16 15 U.S.C. § 2310(c). 17 Because there are only thirty-five named plaintiffs in this case, see 5AC at 2, Plaintiff Szep 18 does not allege a viable MMWA class action claim under § 2310(c). See Pilgrim v. Gen. Motors 19 Co., No. CV 15-8047-JFW (EX), 2019 WL 5779892, at *6 (C.D. Cal. Oct. 4, 2019) (“In this case, 20 there are only fifty-seven named Plaintiffs, which is far less than the number required to allege a 21 cognizable MMWA class action claim. Because Plaintiffs have failed to comply with the 22 requirements of the MMWA, the Court must dismiss Plaintiffs’ MMWA claim.”); MacDougall v. 23 Am. Honda Motor Co., No. SACV1701079AGDFMX, 2017 WL 8236359, at *4 (C.D. Cal. Dec. 24 4, 2017) (“Because Plaintiffs have failed to comply with the internal requirements of the 25 Magnuson-Moss Act—they haven’t named more than 100 plaintiffs—the Court must dismiss this 26 claim.”); Floyd v. Am. Honda Motor Co., No. 2:17-CV-08744-SVW-AS, 2018 WL 6118582, at *4 27 (C.D. Cal. June 13, 2018) (“Plaintiffs have failed to comply with the internal requirements of the 1 claim under the Magnuson-Moss Act is dismissed.”); Patterson v. RW Direct, Inc., No. 18-CV- 2 00055-VC, 2018 WL 6106379, at *2 (N.D. Cal. Nov. 21, 2018) (“Patterson’s claim under the 3 Magnuson-Moss Warranty Act is dismissed with prejudice. A Magnuson-Moss claim is only 4 cognizable on a class-wide basis where ‘the number of named plaintiffs is less than one hundred.’ 5 Because Patterson is the only named plaintiff, that requirement is not satisfied here.” (internal 6 citation omitted)). As a result, there is no reason to distinguish Plaintiff Szep’s MMWA class 7 action claim from his individual claim, and it too, is not viable.3 8 As a result, the Court now must face the question it deferred in its previous Order: 9 “whether and how Bristol-Myers would apply if jurisdiction arose exclusively on the basis of 10 diversity.” SAC Order at 13 n.2. 11 3. The Application of Bristol-Myers in the Context of Diversity Jurisdiction 12 A reasonable argument could be made that the concerns that animated the Supreme Court’s 13 decision in Bristol-Myers do not apply to federal courts sitting in diversity. In particular, the 14 Supreme Court noted that the “primary concern [in assessing personal jurisdiction] is the burden 15 on the defendant.” Bristol-Myers, 137 S. Ct. at 1780 (quotations and citations omitted). This 16 encompasses both “the practical problems resulting from litigating in the forum” and the “more 17 abstract matter of submitting to the coercive power of a State.” Id. Here, where Defendant is 18 already before the Court litigating claims that overlap substantially with the claims over which 19 pendent personal jurisdiction is to be exercised, “the exercise of personal jurisdiction over the non- 20 resident Plaintiffs’ claims in this case will impose only a de minimis burden” on the Defendant. 21 SAC Order at 17. In addition, the Defendant has already submitted to the “coercive power” of the 22 state in which the federal court sits as a result of defending against other claims arising within the 23 same suit. The federalism concerns of having residents of one state submitting to the jurisdiction 24 of another state’s court is also lessened by the fact the federal district court is part of a unitary 25 3 CAFA (which was not pleaded by Plaintiffs, but which is addressed for the sake of exploring all 26 possible bases for jurisdiction) does not confer federal question jurisdiction as to Plaintiff Szep’s claims; even if it applied, it provides for diversity jurisdiction. Floyd, 2018 WL 6118582, at *3 27 (“CAFA is a basis for diversity jurisdiction.”); see also Chufen Chen v. Dunkin' Brands, Inc., No. 1 federal system. 2 However, nearly every court considering the issue has concluded pendent party jurisdiction 3 cannot be exercised by a federal court sitting in diversity. For instance, in Allen v. ConAgra 4 Foods, Inc., No. 3:13-cv-01279-WHO, 2018 WL 6460451, *5-6 (N.D. Cal. Dec. 10, 2018), the 5 court, while withholding judgment “on the question of whether, on the same facts as those 6 presented in Bristol–Myers, that case would apply to a federal court sitting in diversity,” observed 7 that “when it comes to a federal court sitting in diversity . . . [i]f due process were to allow a 8 federal court to assert personal jurisdiction over a purely state law cause of action when a state 9 court could not do the same, problematic dis-uniformity could result.” See In re Packaged 10 Seafood Prod. Antitrust Litig., 338 F. Supp. 3d 1118, 1172 (S.D. Cal. 2018) (“The general 11 consensus post-Bristol-Myers appears to be that because Bristol-Myers dealt with limits on state 12 sovereign power within a federal system, its reasoning is applicable to federal courts sitting in 13 diversity.”); Fitzhenry-Russell v. Dr. Pepper Snapple Grp., Inc., No. 17-CV-00564 NC, 2017 WL 14 4224723, at *4 (N.D. Cal. Sept. 22, 2017) (“The Court finds no merit in the plaintiffs’ first 15 argument that Bristol-Myers does not apply to federal courts. This is because federal courts 16 routinely apply the specific jurisdiction analysis to defendants in cases that are before them solely 17 on the basis of diversity.”); Maeda v. Pinnacle Foods Inc., 390 F. Supp. 3d 1231, 1247 (D. Haw. 18 2019) (“pendent jurisdiction is inapplicable absent a federal claim”). See also, e.g., Molock v. 19 Whole Foods, 297 F. Supp. 3d 114, 125 (D.D.C. 2018) (applying Bristol–Myers where “the 20 federal court sits in diversity and assesses state law claims”); Muir v. Nature’s Bounty (DE), Inc., 21 No. 15 C 9835, 2018 WL 3647115, at *4 (N.D. Ill. Aug. 1, 2018) (“the scope of a federal court’s 22 personal jurisdiction in diversity cases is determined by state law, a federal court sitting in 23 diversity cannot exercise personal jurisdiction—‘pendent’ or otherwise—on that basis either”). 24 Recognizing the growing weight of authority, this Court now holds that Bristol-Myers applies to 25 federal courts sitting in diversity, and thus that the exercise of pendent personal jurisdiction is 26 improper in such a circumstance. 27 The fact that this case is brought as a putative class action extending across numerous 1 overwhelming majority of federal courts have held that Bristol-Myers applies to claims brought by 2 named plaintiffs in class actions. As the court noted in In re Samsung Galaxy Smartphone Mktg. 3 & Sales Practices Litig., 2018 WL 1576457, at *2 (N.D. Cal. Mar. 30, 2018), “Whether Bristol- 4 Myers applies to federal class actions is an open question. However, Plaintiffs identify no 5 authority where a court has determined that Bristol-Myers does not apply to a named plaintiff 6 seeking to represent a statewide class of non-forum residents proceeding under non-forum law.” 7 (internal citations omitted). See also Morrison v. Ross Stores, Inc., No. 18-CV-02671-YGR, 2018 8 WL 5982006, at *4 (N.D. Cal. Nov. 14, 2018) (“The requirement to establish personal jurisdiction 9 [in a class action] must be met as to each named plaintiff’s claim, with respect to each defendant 10 individually”); Gaines v. Gen. Motors, LLC, No. 17CV1351-LAB (JLB), 2018 WL 3752336, at *3 11 (S.D. Cal. Aug. 7, 2018) (“The Court agrees with the many other federal courts that have found no 12 reason Bristol-Myers’ limitation on personal jurisdiction would not apply to named parties in 13 putative class actions.”); Greene v. Mizuho Bank, Ltd., 289 F. Supp. 3d 870, 874 (N.D. Ill. 2017) 14 (“Nothing in Bristol–Myers suggests that it does not apply to named plaintiffs in a putative class 15 action.”); Chufen Chen v. Dunkin’ Brands, Inc., No. 17CV3808CBARER, 2018 WL 9346682, at 16 *6 (E.D.N.Y. Sept. 17, 2018) (holding that Bristol-Myers applies to named Plaintiffs in the class 17 action context). 18 To be sure, as cases cited by Plaintiffs have held, the question concerning a district court’s 19 jurisdiction as it pertains to unnamed plaintiffs in class actions is different from the issue of 20 jurisdiction over named plaintiffs in class actions. See, e.g., Al Haj v. Pfizer Inc., 338 F. Supp. 3d 21 815, 819 (N.D. Ill. 2018) (“Bristol-Myers thus does not address, let alone resolve, whether due 22 process requires that the defendant be subject to specific jurisdiction not only as to the named 23 plaintiff’s claims, but also as to the absent class members’ claims.”); Sotomayor v. Bank of Am., 24 N.A., 377 F. Supp. 3d 1034, 1038 (C.D. Cal. 2019) (“the claims of unnamed class members are not 25 implicated in the question of specific jurisdiction in a class action”); In re Morning Song Bird 26 Food Litig., No. 12CV01592 JAH-AGS, 2018 WL 1382746, at *2 (S.D. Cal. Mar. 19, 2018) 27 (citing Abrams Shell v. Shell Oil Co., 165 F.Supp.2d 1096, 1107 n.5 (C.D. Cal. 2001) for the 1 as to unnamed members of a plaintiff class, it is by now well settled that these requirements to suit 2 || must be satisfied for each and every named plaintiff for the suit to go forward.”). But this is not 3 the issue in this motion. 4 Accordingly, Bristol-Myers applies to federal courts sitting in diversity, and thus, pendent 5 personal jurisdiction does not apply to GM as it relates to the claims of Plaintiff Szep. As a result, 6 || the Court GRANTS Defendant’s Motion to Dismiss Plaintiff Szep’s Claims in the Fifth Amended 7 Complaint. Because the Court finds that it lacks personal jurisdiction over GM as to Plaintiff 8 Szep’s claims, it does not reach the other arguments advanced by Defendant as to why those 9 || claims should be dismissed. 10 IV. CONCLUSION 11 For the reasons explained above, the Court GRANTS Defendant’s Motion to Dismiss 12 || Plaintiff Szep’s Claims in the Fifth Amended Complaint. 13 This order disposes of Docket No. 158. 14 IT IS SO ORDERED. 16
= 17 Dated: December 5, 2019 18 <4 ED M. CHEN 20 United States District Judge 21 22 23 24 25 26 27 28