Wadeea v. Mercedes-Benz USA, LLC

Opinion

1 2 3 4

7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9

10 MASHID WADEEA, individually and on Case No.: 24-cv-01587-H-DDL 11 behalf of all others similarly situated, 12 ORDER DENYING DEFENDANT’S Plaintiff, MOTION TO DISMISS 13 v. 14 MERCEDES-BENZ USA, LLC, a

15 Delaware Corporation, and DOES 1

through 10, inclusive, 16 [Doc. No. 8.] Defendant. 17

18 On July 11, 2024, Plaintiff Mashid Wadeea (“Plaintiff”) filed a class action 19 complaint against Mercedes-Benz USA, LLC (“MBUSA”) in the Superior Court of 20 California, County of San Diego. (Doc. No. 1-2, Compl.) On September 6, 2024, MBUSA 21 removed Plaintiff’s complaint to the United States District Court for the Southern District 22 of California. (Doc. No. 1.) On September 27, 2024, MBUSA filed a motion to dismiss 23 the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a 24 claim. (Doc. No. 8.) On November 18, 2024, Plaintiff filed a response to MBUSA’s 25 motion to dismiss. (Doc. No. 17.) On November 25, 2024, MBUSA filed a reply. (Doc. 26 No. 18.) On December 2, 2024, the Court took the matter under submission. (Doc. No. 27 19.) For the reasons below, the Court denies MBUSA’s motion to dismiss. 28 // 1 Background 2 The following factual background is taken from the allegations in Plaintiff’s 3 complaint. Plaintiff is a resident of California. (Compl. ¶ 12.) MBUSA is a Delaware 4 corporation with its headquarters in Atlanta, Georgia. (Id. ¶¶ 14–15.) MBUSA 5 manufactures and sells automobiles. (Id. ¶ 15.) Plaintiff brings this action against MBUSA 6 on behalf of persons who purchased Mercedes-Benz S-Class vehicles of model years 2021 7 through 2024 (“Class Vehicles”) in California. (Id. ¶ 1.) 8 On October 29, 2022, Plaintiff purchased a 2023 Mercedes-Benz S580V4, new, for 9 a total consideration of $178,028.08. (Id. ¶ 33.) Plaintiff’s Class Vehicle was 10 manufactured by MBUSA and came with an express warranty. (Id. ¶ 35.) The express 11 warranty provided that, if a defect developed during the warranty period, Plaintiff would 12 be provided repair services at an authorized dealership. (Id.) The Class Vehicles suffer 13 from a defect affecting the 21-inch AMG wheels that causes the tires to bubble along the 14 sidewall, leak air, and blow out while driving. (Id. ¶¶ 34, 37–43.) Between December 5, 15 2022 to March 22, 2024, Plaintiff brought her vehicle to an authorized dealership for repair 16 services due to problems caused by the defect at least six times. (Id. ¶¶ 37–44.) Plaintiff’s 17 vehicle was never adequately repaired or replaced and she does not believe her vehicle is 18 safe for normal operation. (Id. ¶¶ 44-45, 130.) 19 Beginning in mid-2022, consumers complained about the defect affecting the Class 20 Vehicles on internet forums and social media accounts monitored by MBUSA. (Id. 21 ¶ 74-75.) MBUSA’s authorized dealers were aware of the defect as early as 2022 and 22 reported incidents of tire blowouts resulting from the defect directly to MBUSA. (Id. ¶ 76.) 23 MBUSA has issued recalls on other vehicles it manufactures for similar tire issues but has 24 not issued a recall for tires installed on the Class Vehicles. (Id. ¶¶ 77–80.) 25 On July 11, 2024, Plaintiff filed a class action complaint against Mercedes-Benz in 26 the Superior Court of California, County of San Diego, alleging claims for: (1) violations 27 of California’s Song Beverly Consumer Warranty Act (“Song Beverly Act”), California 28 Civil Code §§ 1790 et seq.; (2) violations of California’s Unfair Competition Law 1 (“UCL”), California Business & Professional Code §§ 17200 et seq.; (3) breach of express 2 warranty; (4) breach of implied warranty; (5) unjust enrichment; and (6) fraudulent 3 concealment. (Compl. ¶¶ 128–222.) MBUSA moves pursuant to Federal Rule of Civil 4 Procedure 12(b)(6) to dismiss Plaintiff’s complaint in its entirety for failure to state a claim. 5 Discussion 6 I. Legal Standard for a Rule 12(b)(6) Motion to Dismiss 7 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal 8 sufficiency of the pleadings and allows a court to dismiss a complaint if the plaintiff has 9 failed to state a claim upon which relief can be granted. See Conservation Force v. Salazar, 10 646 F.3d 1240, 1241 (9th Cir. 2011) (citing Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 11 2001)). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading that states a claim 12 for relief contain “a short and plain statement of the claim showing that the pleader is 13 entitled to relief.” The function of this pleading requirement is to give the defendant fair 14 notice of the claim is its grounds. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) 15 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). 16 A complaint will survive a Rule 12(b)(6) motion to dismiss if it contains “enough 17 facts to state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial 18 plausibility when the plaintiff pleads factual content that allows the court to draw the 19 reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 20 Iqbal, 556 U.S. 662, 678 (2009). Dismissal for failure to state a claim is proper where the 21 claim “lacks a cognizable legal theory or sufficient facts to support a cognizable legal 22 theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008); 23 see Los Angeles Lakers, Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017). In 24 reviewing a Rule 12(b)(6) motion to dismiss, a district court must “accept the factual 25 allegations of the complaint as true and construe them in the light most favorable to the 26 plaintiff.” Los Angeles Lakers, 869 F.3d at 800 (quoting AE ex rel. Hernandez v. Cty. of 27 Tulare, 666 F.3d 631, 636 (9th Cir. 2012)). 28 // 1 II. Analysis 2 A. Plaintiff Adequately Pleads a Defect 3 MBUSA moves to dismiss the complaint in its entirety, arguing that Plaintiff has 4 failed to properly plead a defect in the first instance. (Doc. No. 8-1 at 12-13.) MBUSA 5 asserts that Plaintiff’s description of the defect is vague and that the tire problems at issue 6 could have been caused by ordinary driving behavior or road conditions and, thus, Plaintiff 7 has not pled a defect with sufficient particularity. Id. 8 To allege a defect, the complaint must contain sufficient allegations to provide fair 9 notice and must plausibly suggest entitlement to relief. Mosqueda v. Am. Honda Motor 10 Co., Inc., 443 F. Supp. 3d 1115, 1126 (Mar. 6, 2020). While a plaintiff “must describe the 11 alleged defect in sufficient detail” to survive a motion to dismiss, the plaintiff “may seek 12 the specific mechanical details of the defect during discovery.” Tappana v. Am. Honda 13 Motor Co., Inc., 609 F. Supp. 3d 1078, 1084 (C.D. Cal. July 5, 2022). Generally, 14 allegations describing the problems caused by the defect are sufficient. See Mosqueda, 15 442 F. Supp. 3d at 1127 (collecting cases). 16 Plaintiff has identified a specific size and type of tire that she alleges contains the 17 defect. (Compl. ¶¶ 33, 41.) She alleges the defect causes inexplicable tire blowouts, 18 leaking air, bubbling along the side wall, and unpredictable handling. (Id. ¶¶ 37–44.) She 19 also alleges these problems occurred within the first few months of ownership. (Id.) She 20 supports her contention that these tire issues are caused by a defect by detailing the 21 complaints of several other consumers reporting the same problems. (Id. ¶¶ 48–56.) These 22 allegations are sufficient to plead a defect. See, e.g., Mosqueda, 443 F. Supp. 3d at 1127 23 (finding allegations of problems caused by automatic braking system, combined with 24 numerous NHTSA complaints detailing the same issues, sufficient to plead a defect). 25 Accordingly, the Court denies the motion to dismiss the complaint on this basis. 26 B. Fraud Based Claims 27 Defendant argues that Plaintiff has not sufficiently pled her claims sounding in fraud. 28 (Doc. No. 8-1 at 14-21.) “A claim for fraud based on concealment or omission requires 1 that: (1) the defendant must have concealed or suppressed a material fact; (2) the defendant 2 must have been under a duty to disclose the fact to the plaintiff; (3) the defendant must 3 have intentionally concealed or suppressed the fact with intent to defraud the plaintiff; (4) 4 the plaintiff must have been unaware of the fact and would have acted otherwise if he had 5 known of the concealed or suppressed fact; and (5) as a result of the concealment or 6 suppression of the fact, the plaintiff sustained damage.” In re Ford Motor Co. DPS6 7 Powershift Transmission Prod. Liab. Litig., 2019 WL 3000646, at *5 (C.D. Cal. May 22, 8 2019). Allegations of fraud must set forth “the who, what, when, where, and how of the 9 misconduct charged.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) 10 (internal quotation marks omitted). 11 a. Rule 9(b) Particularity 12 MBUSA argues that Plaintiff’s UCL and fraudulent concealment claims should be 13 dismissed because Plaintiff has not met the heightened particularity requirement of Federal 14 Rule of Civil Procedure 9(b). (Doc. No. 8-1 at 14, 19.) Plaintiff argues that her claims 15 sounding in fraud are brought on a theory of omission and are thus subject to a relaxed 16 standard of pleading. (Doc. No. 17 at 14–15.) 17 A claim based on a nondisclosure or omission is a claim for misrepresentation in a 18 cause of action for fraud, and it must be pleaded with particularity under Rule 9(b). Kearns, 19 567 F.3d at 1127. Generally, a party must allege the who, what when, where, and how of 20 the misconduct alleged with specificity. See Swartz v. KPMG LLP, 476 F.3d 756, 764 21 (9th Cir. 2007). When a claim is based on allegations of fraudulent omission, “Rule 9(b)’s 22 ‘who, what, when, where, and how’ test must be applied while ‘mindful of the [] inherent 23 limitations of an omission claim.’” Gamez v. Toyota Motor Sales, U.S.A., Inc., 2024 WL 24 86320, at *14 (E.D. Cal. Jan. 8, 2024) (quoting In re Vizio, Inc., Consumer Priv. Litig., 25 238 F. Supp. 3d 1204, 1229 (C.D. Cal. 2017)). This approach recognizes that, in fraudulent 26 omission cases, “the relevant facts are known only to the defendants.” Moore v. Mars 27 Petcare US, Inc., 966 F.3d 1007, 1020 (9th Cir. 2020). To plead a claim for fraud by 28 omission, a plaintiff “must both ‘describe the content of the omission’ and ‘where the 1 omitted information should or could have been revealed.’” Tappana v. Am. Honda Motor 2 Co., Inc., 609 F. Supp. 3d 1078, 1088 (C.D. Cal. 2022). 3 Plaintiffs sufficiently plead their fraud by omission claims. Plaintiff has alleged that 4 there is a defect. See supra Section II.A. Plaintiff has also alleged that she purchased her 5 vehicle new and that no information in the public domain disclosed the existence of the 6 defect, including the existence of a recall related to the defect. (Compl. ¶¶ 86, 80.) Plaintiff 7 also alleges that she would not have purchased or paid as much for the vehicle had the 8 defect been disclosed. (Id. ¶¶ 70–71.) “In short, the ‘who’ is [MBUSA], the ‘what’ is [its] 9 knowledge of a defect, the ‘when’ is prior to the sale of [the vehicle], and the ‘where’ is 10 the various channels of information through which [MBUSA] sold [the vehicle].” 11 MacDonald v. Ford Motor Co., 37 F. Supp. 3d 1087, 1098 (Mar. 31, 2014); see also Gamez, 12 2024 WL 86320, at *15 (quoting MacDonald for the same and collecting cases). 13 b. Pre-Sale Knowledge 14 MBUSA argues that Plaintiff’s claims sounding in fraud should be dismissed 15 because Plaintiff fails to plead that MBUSA had knowledge of the defect at the time of 16 sale. (Doc. No. 8-1 at 15.) “To be liable for a failure to disclose, a defendant must have 17 pre-sale knowledge of the defect.” Sloan v. Gen. Motors LLC, 287 F. Supp. 3d 840, 865 18 (N.D. Cal. Feb. 7, 2018). Plaintiff alleges she purchased her vehicle in October 2022. 19 (Compl. ¶ 33.) Plaintiff alleges several instances of consumer complaints concerning 20 defective S-Class vehicle tires on online forums and MBUSA’s social media pages dating 21 back to mid-2022 and alleges MBUSA monitors these information channels. (Id. ¶¶ 74– 22 75.) Plaintiff also alleges MBUSA’s dealerships were aware of the defect in S-Class 23 vehicles of model year 2022 and had reported it to MBUSA. (Id. ¶ 76.) Finally, Plaintiff 24 alleges MBUSA has issued recalls for similar defects in certain of its 2018 model year 25 vehicles. (Id. ¶ 77.) Taken together, Plaintiffs allege facts sufficient to support a plausible 26 inference that MBUSA had the requisite pre-sale knowledge of the defect. See, e.g., 27 Gamez, 2024 WL 86320, at *13–14 (finding plaintiffs’ allegations of pre-sale knowledge 28 1 sufficient when they include multiple sources of information where defendant likely 2 learned of the defect). 3 c. Active Concealment 4 MBUSA argues that Plaintiff’s fraudulent concealment claim should be dismissed 5 because Plaintiff does not allege facts showing that MBUSA took affirmative steps to 6 conceal the defect. (Doc. No. 8-1 at 20–21.) “[T]o state a claim for active concealment,” 7 a plaintiff “must allege specific affirmative acts” a defendant took in “hiding, concealing, 8 or covering up the matters complained of.” Herron v. Best Buy Co. Inc., 924 F. Supp. 2d 9 1161, 1176 (E.D. Cal. Feb. 14, 2013). “Mere nondisclosure does not constitute active 10 concealment.” Id. In Herron, the court found a conclusory assertion that the defendant 11 “actively concealed material facts” from plaintiff was insufficient to show active 12 concealment. Id. By contrast, courts have found that allegations of nondisclosure paired 13 with allegations of “denials of free servicing or repairs of defective parts sufficient to 14 survive a motion to dismiss.” Cho v. Hyundai Motor Co., Ltd., 636 F. Supp. 3d 1149, 1166 15 (C.D. Cal. Oct. 21, 2022). 16 Plaintiff’s complaint details several instances where Plaintiff and other consumers 17 brought the vehicles to authorized dealerships and were told that “nothing [was] wrong” 18 and the only recourse was to “replace/switch to different tire size at [their] expense.” 19 (Compl. ¶ 55; see also Compl. ¶¶ 36–56, 214.) As in Cho, these allegations are sufficient 20 to survive the pleadings stage. See Cho, 636 F. Supp 3d at 1166. 21 d. Duty of Disclosure 22 MBUSA argues that Plaintiff does not allege facts showing that MBUSA owed 23 Plaintiff a duty to disclose the defect. (Doc. No. 8-1 at 17–19.) “Under California law, 24 there are four circumstances in which an obligation to disclose may arise.” Smith v. Ford 25 Motor Co., 749 F. Supp. 2d 980, 987 (N.D. Cal. 2010). These include “(1) when the 26 defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had 27 exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant 28 actively conceals a material fact from the plaintiff; and (4) when the defendant makes 1 partial representations but also suppresses some material fact.” Falk v. Gen. Motors Corp., 2 496 F. Supp. 2d 1088, 1094 (N.D. Cal. 2007). Under California law, a defect that occurs 3 during the warranty period is a material fact if Plaintiff alleges that “the defect ‘would have 4 caused [them] to not purchase the car if [it] had been disclosed.’” Sloan v. Gen. Motors 5 LLC, 287 F. Supp. 3d 840, 869 (N.D. Cal. 2018) (quoting Apocada v. Whirlpool Corp., 6 2013 WL 6477821, at *7 (C.D. Cal. Nov. 8, 2013)). 7 Here, Plaintiff has alleged that a defect occurred during the express warranty period 8 that would have caused her to not purchase the car if it had been disclosed. (Compl. ¶¶ 37, 9 71.) As the Court has already determined that Plaintiff sufficiently pleads active 10 concealment and MBUSA’s pre-sale knowledge of the defect, Plaintiff’s allegations are 11 sufficient to show that MBUSA owed a duty to Plaintiff to disclose the defect. 12 e. Economic Loss Rule 13 MBUSA argues that the economic loss rule bars Plaintiff’s fraudulent concealment 14 claim because she “has not alleged any injury other than monetary damages.” (Doc. No. 15 8-1 at 21.) Plaintiff argues that the economic loss rule does not apply because Plaintiff 16 alleges intentional tortious conduct on the part of MBUSA that was independent of 17 contractual obligations. (Doc. No. 17 at 19.) 18 Under California law, a plaintiff may assert a cause of action for fraudulent 19 concealment “based on conduct occurring in the course of a contractual relationship, if the 20 elements of the cause of action can be established independently of the parties’ contractual 21 rights and obligations and the tortious conduct exposes the plaintiff to a risk of harm 22 beyond the reasonable contemplation of the parties when they entered into the contract.” 23 Rattagan v. Uber Techs., Inc., 17 Cal. 5th 1, 38 (2024). 24 MBUSA asserts that Plaintiff’s fraudulent concealment claim is not independent of 25 the contractual rights under the express warranty because the warranty excludes tire 26 damage. (Doc. No. 18 at 11.) This argument is grounded in a disputed factual assertion 27 and, so, the Court declines to apply the economic loss rule to Plaintiff’s fraudulent 28 concealment claim at this stage. See infra Section II.G. Plaintiff has adequately pled its 1 claims sounding in fraud. Accordingly, the Court denies the motion to dismiss as to those 2 claims. 3 C. Breach of Implied Warranty Claim 4 MBUSA moves to dismiss Plaintiffs’ implied warranty claims. (Doc. No. 8-1 at 23– 5 25.) MBUSA argues that Plaintiff fails to plead (1) that the vehicle was not merchantable 6 and (2) that Plaintiff stands in vertical privity with MBUSA. Id. The Court will address 7 each argument in turn. 8 a. Merchantability 9 MBUSA argues Plaintiff has not pled facts that establish that the vehicle was not fit 10 for its ordinary purpose. (Doc. No. 8-1 at 23). MBUSA asserts that because Plaintiffs do 11 not plead that the defect rendered her vehicle “incapable of providing transportation,” she 12 has not successfully pled breach of implied warranty. Id. 13 To state a claim under California Commercial Code § 2314 for a breach of the 14 implied warranty of merchantability, a consumer must demonstrate that the good is not “fit 15 for the ordinary purposes for which such goods are used.” Cal. Com. Code § 2314(2)(c). 16 In the context of vehicles: 17 The law is clear that to be fit for its ordinary purpose, a vehicle must be “in safe condition and substantially free of defects.” Isip v. Mercedes–Benz USA, 18 LLC, 155 Cal. App. 4th 19, 27, 65 Cal. Rptr. 3d 695 (2007). Moreover, it 19 must provide “reliable” transportation. Brand v. Hyundai Motor Am., 226 Cal. App. 4th 1538, 1547, 173 Cal. Rptr. 3d 454 (2014) (quotation omitted). 20 Thus, three factors related to vehicle merchantability are safety, reliability, 21 and substantial freedom from defects. 22 In re MyFord Touch Consumer Litig., 291 F. Supp. 3d 936, 945–46 (N.D. Cal. 2018) 23 (footnote omitted). 24 Plaintiff alleges that, due to the defect, the vehicle “handle[s] unpredictably,” the 25 tires “blowout while driving,” and that she cannot “safely rely on the vehicle for normal 26 operation.” (Compl. ¶¶ 38, 43, 45.) At this stage of the case, Plaintiffs have alleged 27 sufficient facts regarding the tire defect’s impact on the safety and reliability of the vehicle 28 that could show that they were unfit for their ordinary purpose. 1 b. Privity 2 MBUSA argues that Plaintiff’s breach of implied warranty claim should be 3 dismissed because Plaintiff is not in vertical privity with MBUSA, a car manufacturer who 4 did not directly sell the vehicle to her. (Doc. No. 8-1 at 24.) MBUSA limits this argument 5 to Count IV of Plaintiff’s complaint, the breach of implied warranty claim brought under 6 California Commercial Code § 2314. (Doc. No. 18 at 14.) 7 To state a claim under California Commercial Code § 2314, the plaintiff “must stand 8 in vertical contractual privity with the defendant.” Clemens v. DaimlerChrysler Corp., 534 9 F.3d 1017, 1023 (9th Cir. 2008). California, however, has recognized an exception to the 10 vertical privity requirement where the plaintiff consumer is an intended third-party 11 beneficiary of the contract for sale of a good between a manufacturer and a dealer. See 12 Gilbert Fin. Corp. v. Steelform Contracting Co., 82 Cal. App. 3d 65, 69–70, 145 Cal. Rptr. 13 448 (Cal. Ct. App. 1978) (finding that consumer could sue subcontractor for breach of 14 implied warranty as a third-party beneficiary of subcontractor’s implied warranty to 15 general contractor). In Toyota Motor Corp., the court concluded that plaintiffs were the 16 intended beneficiaries of any implied warranty of merchantability between Toyota and its 17 auto dealers because Toyota intended for the dealers to sell its cars to consumers. 890 F. 18 Supp. 2d 1210, 1222 (C.D. Cal. Sept. 12, 2011). And in MyFord Touch Consumer 19 Litigation, the court concluded the third-party beneficiary exception set out in Gilbert 20 “remains viable under California law.” 291 F. Supp. 3d at 984 (finding third-party 21 beneficiary exception to privity requirement applied to plaintiff who purchased a car from 22 a dealership and subsequently brought suit against the manufacturer for a defect). 23 Plaintiff concedes that she is not in vertical privity with MBUSA but argues that a 24 third-party beneficiary exception applies because she was the intended beneficiary of an 25 implied warranty between MBUSA and its authorized dealers. (Doc. No. 17 at 23–24.) 26 MBUSA responds that the Ninth Circuit’s decision in Clemens v. DaimlerChrysler 27 Corporation forecloses a third-party beneficiary exception. (Doc. No. 18 at 14.) But the 28 third-party beneficiary is cognizable under California law and Clemens does not state 1 otherwise. See MyFord Touch, 291 F. Supp. 3d at 1222 (noting the Clemens decision does 2 not address Gilbert or the third-party beneficiary exception). The Court concludes that 3 there is an issue of fact as to whether Plaintiff was an intended beneficiary of the implied 4 warranty between MBUSA and its dealers such that the third-party beneficiary exception 5 would apply. Accordingly, the Court denies the motion to dismiss as to the breach of 6 implied warranty claim. 7 D. Breach of Express Warranty 8 MBUSA argues that Plaintiff’s express warranty claim must be dismissed because 9 her description of the terms of the warranty is inaccurate. (Doc. No. 8-1 at 21; Doc. No. 10 18 at 13.) MBUSA also asserts the claim should be dismissed because Plaintiff did not 11 allege that a dealership determined “repair or replacement was necessary” and because the 12 express warranty does not cover damage to tires resulting from “pothole impact, curb 13 impact, or from other objects/road hazards.” (Doc. No. 8-1 at 22.) Finally, MBUSA asserts 14 that the express warranty claim and the UCL claim should be dismissed because the express 15 warranty disclaims design defects. (Doc. No. 8-1 at 23.) All of these arguments rely on 16 factual assertions derived from documents the Court has declined to take judicial notice of. 17 See infra Section II.G. These factual assertions are contrary to the allegations in the 18 complaint and are better suited to consider on a motion for summary judgment.1 Intri-Plex 19 Tech., Inc. v Crest Grp., Inc., 499 F.3d 1048, 1052 (9th Cir. 2007); Los Angeles Lakers, 20 869 F.3d at 800. Accordingly, the Court denies the motion to dismiss as to the breach of 21 express warranty claim. 22 23 24 1 In addition to improperly introducing facts outside the complaint, MBUSA’s arguments repeatedly ignore the commonsense import of Plaintiff’s allegations. Plaintiff did, in fact, allege that she took her 25 vehicle to an authorized dealership at least six times and her tire was replaced at least one time. (Compl. ¶ 44, 41.) She also does not allege her tires were damaged by impact or road hazards. Rather, she alleges 26 the tires inexplicably blew out, bubbled along the side wall, and failed to hold air. (Compl. ¶¶ 37-43.) Finally, the Court notes that Plaintiff did not specifically allege a design defect in her complaint, rather, 27 Plaintiff has alleged “symptoms that may be attributable to material or workmanship defects.” Falk v. 28 Nissan N. Am., Inc., 2018 WL 2234303, at *2 (N.D. Cal. May 16, 2018). 1 E. Equitable Claims 2 MBUSA argues that Plaintiff’s UCL and unjust enrichment claims must be 3 dismissed pursuant to Ninth Circuit precedent in Sonner v. Premier Nutrition Corporation2 4 because Plaintiff fails to plead a lack of an adequate remedy at law. (Doc. No. 8-1 at 25.) 5 Plaintiff argues that the determination of whether Plaintiff lacks an adequate remedy at law 6 need not be decided at the pleadings stage. (Doc. No. 17 at 28.) MBUSA responds that 7 Plaintiff’s complaint contains no allegations that would entitle her to equitable relief. (Doc. 8 No. 18 at 15.) 9 “In order to entertain a request for equitable relief, a district court must have 10 equitable jurisdiction, which can only exist under federal common law if the plaintiff has 11 no adequate legal remedy.” Guzman v. Polaris Indus. Inc., 49 F.4th 1308, 1313 (9th Cir. 12 2022) (citing Sonner, 971 F.3d at 843–844). A party must establish that they lack an 13 adequate remedy at law before a federal court may make a determination on the merits as 14 to an equitable claim for restitution. Sonner, 971 F.3d at 844. 15 It is also true, however, that a party may plead legal and equitable claims in the 16 alternative. Fed. R. Civ. P. 8(d)(2); see also Lopez v. Abbot Labs., 2023 WL 2656627, at 17 *4 (S.D. Cal. Mar. 27, 2023). Sonner does not hold otherwise, nor does it mandate that 18 district courts dismiss claims for equitable relief at the pleadings stage. See Murphy v. 19 Olly Public Benefit Corp., 651 F. Supp. 3d 1111, 1129 (N.D. Cal. 2023) (“A number of 20 district court cases since Sonner have concluded that it has minimal application at the 21 pleading stage.” (collecting cases)). Indeed, legal remedies may later prove to be 22 inadequate after the benefit of discovery. Eason v. Roman Catholic Bishop of San Diego, 23 424 F. Supp. 3d 1276, 1282 (S.D. Cal. 2019). 24 Here, Plaintiff seeks prospective injunctive relief via its UCL claim and restitution 25 via its unjust enrichment claim. (Compl. ¶¶ 173, 209.) Plaintiff alleges that MBUSA has 26 yet to issue a recall for the defect at issue and that MBUSA was unjustly enriched from 27

28 1 concealing the defect, necessitating the requested equitable relief. (Compl. ¶¶ 31, 205– 2 206.) This is sufficient at the pleadings stage. See Lopez, 2023 WL 2656627, at *4; Souter 3 v. Edgewell Personal Care Co., 2022 WL 485000, at *13 (S.D. Cal. Feb. 16, 2022). 4 MBUSA’s contention that equitable relief is precluded here is better suited on a motion for 5 summary judgment, when the Court and the parties will have the benefit of discovery. 6 Accordingly, the Court denies the motion to dismiss as to Plaintiff’s claims for equitable 7 relief. 8 F. Unjust Enrichment Claim 9 MBUSA argues that Plaintiff’s unjust enrichment claim must be dismissed because 10 Plaintiff has pled the existence of an express contract. (Doc. No. 8-1 at 27.) Plaintiff 11 argues that they are permitted to plead an unjust enrichment claim in the alternative to their 12 breach of contract claims. (Doc. No. 17 at 30.) Generally, a party “may state as many 13 separate claims or defenses as it has, regardless of consistency.” Fed. R. Civ. P. 8(d). The 14 Court therefore declines at this stage of the litigation to dismiss Plaintiff’s unjust 15 enrichment claim. 16 G. Judicial Notice 17 Finally, in conjunction with its motion to dismiss, MBUSA requests that the Court 18 take judicial notice of a 2022 New Vehicle Limited Warranty (“NVLW”). (Doc. No. 8-2 19 at 2.) MBUSA claims the NVLW is applicable to the vehicle at issue. Id. Plaintiff disputes 20 the authenticity of the NVLW. (Doc. No. 17 at 19–21.) MBUSA, in its reply in support 21 of its motion to dismiss, also requests that the Court take judicial notice of the Operator’s 22 Manual for Mercedes-Benz S-Class vehicles. (Doc. No. 18-1 at 2–3.) Plaintiff argues that 23 judicial notice of the Operator’s Manual would be improper because it is not incorporated 24 into the complaint and because the accuracy of its content is reasonably subject to dispute. 25 (Doc. No. 20 at 4–6.) 26 In general, the scope of review on a motion to dismiss for failure to state a claim is 27 limited to “allegations contained in the pleadings, exhibits attached to the complaint, and 28 matters properly subject to judicial notice.” Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th 1 Cir. 2007). Federal Rule of Evidence 201 allows a court to take judicial notice of facts that 2 are either “(1) generally known within the territorial jurisdiction of the trial court; or (2) 3 capable of accurate and ready determination by resort to sources whose accuracy cannot 4 reasonably be questioned.” Fed. R. Evid. 201(b). The Court may also consider additional 5 documents under the “incorporation by reference” doctrine so long as “the plaintiff’s claim 6 depends on the contents of a document, the defendant attaches the document to its motion 7 to dismiss, and the parties do not dispute the authenticity of the document, even though the 8 plaintiff does not explicitly allege the contents of that document in the complaint.” Knievel 9 v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). 10 While Plaintiff’s claims are based on the existence of an express warranty between 11 Plaintiff and MBUSA, Plaintiff disputes the authenticity of the specific NVLW attached to 12 MBUSA’s motion to dismiss. (Doc. No. 17 at 19-20.) The NVLW in question is not 13 signed and does not otherwise contain information to allow the Court to conclude that it 14 was applicable to Plaintiff’s vehicle beyond MBUSA’s own assertion. (Doc. No. 8-3.) 15 Further, the NVLW states that it applies to model year 2022 vehicles, whereas Plaintiff 16 alleges her vehicle was of model year 2023. (Id.; Compl. ¶ 33.) 17 The Operator’s Manual is not incorporated in Plaintiff’s complaint. Plaintiff does 18 not refer to the content of the Operator’s Manual in the complaint and it does not form the 19 basis of the Plaintiff’s claims. Further, MBUSA makes no showing that the accuracy of 20 the Operator’s Manual cannot be reasonably questioned beyond its own conclusory 21 assertions. Accordingly, the Court denies MBUSA’s request to take judicial notice of the 22 NVLW and the Operator’s Manual and has not considered factual assertions that MBUSA 23 has made regarding their contents. 24 // 25 // 26 // 27 // 28 // 1 Conclusion 2 For the reasons above, the Court denies MBUSA’s motion to dismiss. Accordingly, 3 || MBUSA is ordered to file an answer to the complaint within thirty (30) days of this order. 4 IT IS SO ORDERED. 5 |} DATED: December 6, 2024 lu 6 [haat HUFF, ge 7 UNITED STATES DISTRICT COURT 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28