AIDA MILENA GONZALEZ JASON HAYNIE v. AMERICAN HONDA MOTOR CO INC (2024)

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS [Dkt. 47] WITH LEAVE TO AMEND

I. INTRODUCTION

In this case, Plaintiffs Aida Milena Gonzalez and Jason Haynie, on behalf of themselves and all others similarly situated, bring nationwide claims against Defendant American Hondo Motor Co., Inc.¹ under California law for breach of implied warranty of merchantability, false advertising, violation of the Consumer Legal Remedies Act, Unfair Competition Law, fraud by omission and concealment, breach of contract as third-party beneficiaries, and unjust enrichment, arising from the manufacture, advertising, and sale of model year 2020-2022 Honda Pilot, Passport, and Odyssey vehicles. (See Dkt. 34 [First Amended Complaint, hereinafter “FAC”].) In the alternative, Plaintiffs seek to proceed by way of South Carolina and Alabama classes, under the laws of each state respectively, bringing claims similar to their alleged nationwide claims. (See id.) Now before the Court is Defendant's motion to dismiss. (Dkt. 47 [Mot.].) For the following reasons, Defendant's motion is GRANTED IN PART AND DENIED IN PART WITH LEAVE TO AMEND.²

II. BACKGROUND

This lawsuit arises out of two sets of alleged defects in 2020–2022 Honda Pilots, Odysseys (except the 2020 LX), and Passports: issues related to electrical “infotainment” (“Infotainment Defects”) and issues related to automatic braking systems (“Braking Defects”). (FAC ¶¶ 2–3.) Plaintiffs bring this putative class action for damages and injunctive relief on behalf of themselves and all other persons who purchased or leased vehicles that suffer from the alleged Infotainment and Braking Defects. (Id. ¶ 2.)

In 2020, “Gonzalez went to a Honda dealership to test-drive vehicles and get more information about Honda.” (FAC ¶ 136.) “Based on her in-person research at the Honda dealership, she decided she wanted a similar vehicle, although not brand new,” so in September 2020 she shopped around at other dealers and purchased a “close-to-new” 2020 Honda Pilot with only 1,737 miles in Greenville, South Carolina. (Id. ¶¶ 136–37.)

According to Gonzalez, approximately one year after purchase, Gonzalez's vehicle began to experience multiple malfunctions and defects—specifically: “the vehicle making cracking and popping sounds; the screen going black, which resulted in loss of access to the speedometer, the gas meter, and other safety gauges; the screen flashing erratic patterns; the backup screen not working; Bluetooth and navigation features cutting in and out; intermittent radio access; false negatives on braking and collision mitigation warnings (i.e., the warning lights would not go off when they were supposed to); false positives on braking and collision mitigation warnings (e.g., the screen flashing ‘BRAKE’ when there was no reason to brake); the steering wheel shaking when the brakes deploy without cause; and actual automatic brake implementation when there is no hazard.” (Id. ¶ 138.) Gonzalez alleges specific dates and circumstances in which these malfunctions and defects manifested in her vehicle. (See, e.g., ¶ 149.)

After Gonzalez's vehicle started to experience these malfunctions and defects, Gonzalez visited her local Honda dealer, Vic Baily Honda in Spartanburg, South Carolina, numerous times. (Id. ¶¶ 138–149.) While the audio issues improved after certain repairs, other issues persisted. (Id. ¶ 149.) Since Gonzalez purchased her vehicle in September 2020, she has been unable to drive it as it awaited repairs for a total of 171 days. (Id. ¶ 150.) While she was provided a loaner vehicle, it did not seat her entire family, resulting in her family needing to take two vehicles on outings. (Id. ¶ 152.)

On June 15, 2023, Defendant issued a recall offering free repairs related to the Infotainment Defect. (Id. ¶ 64.) However, Plaintiffs do not allege that Gonzalez ever took advantage of the recall or free repair.

In May 2020, Haynie purchased a new 2020 Honda Pilot in Auburn, Alabama from an authorized Honda dealership, King Honda Car World. (Id. ¶ 161.) By the next month, and over the following three years, “he experienced phantom braking on the highway and at highway speeds, backup camera failures, loud cracking and popping noises over the audio system, and malfunctioning dashboard and radio screens. The Infotainment Defects also rendered the rear entertainment screen useless.” (Id. ¶ 162.) “The Braking Defects manifested approximately 20–22 times. The phantom braking often occurred at highway speeds and would abruptly decelerate Haynie's vehicle from 65 miles per hour to 40 miles per hour in a sudden, hard, and disorienting fashion.” (Id.) Haynie took his vehicle into the dealership for repair approximately twenty times for these issues, but each time, the problems recurred. (Id. ¶ 166.) “Finally, in April 2023, after a dealership had indicated that the car was in good working order, Haynie sold the vehicle, although he subsequently heard that the vehicle continued to have problems.” (Id. ¶ 168.) Because Haynie sold his vehicle before Defendant's recall, Haynie did not take advantage of the free Infotainment Defect repair. (See id. ¶ 64.)

In addition to their personal experiences, Plaintiffs also submit numerous allegations involving Defendants' vehicles and the Infotainment and Braking Defects generally. (FAC ¶¶ 8–20, 38–134.) Many of these allegations involve model year vehicles not at issue in this case.

III. LEGAL STANDARD

Article III of the United States Constitution requires that courts adjudicate only actual cases or controversies. To constitute an actual case or controversy, a plaintiff bringing a case must have standing. The party invoking federal jurisdiction bears the burden of establishing standing. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). To satisfy the standing requirement, a plaintiff must show that (1) she has suffered an injury in fact that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical, (2) the injury is fairly traceable to the defendant's challenged actions, and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180–81 (2000).

Pursuant to Federal Rule of Civil Procedure 12(b)(1), a defendant may seek dismissal of a complaint for lack of subject matter jurisdiction. Challenges under Rule 12(b)(1) “may be facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In a “facial attack, the challenger asserts that the allegations contained in the complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Id. “The district court resolves a facial attack as it would a motion to dismiss under Rule 12(b)(6).” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014).

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a plaintiff's claims. The issue on a motion to dismiss for failure to state a claim is not whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled to offer evidence to support the claims asserted. See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997). Rule 12(b)(6) is read in conjunction with Rule 8(a), which requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2); see Whitaker v. Tesla Motors, Inc., 985 F.3d 1173, 1176 (9th Cir. 2021). When evaluating a Rule 12(b)(6) motion, the district court must accept all material allegations in the complaint as true and construe them in the light most favorable to the non-moving party. See Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1014 (9th Cir. 2012). To survive a motion to dismiss, a complaint must contain sufficient factual material to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A complaint must contain well-pleaded factual allegations, not legal conclusions, that “plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). In keeping with this liberal pleading standard, the district court should grant the plaintiff leave to amend if the complaint can possibly be cured by additional factual allegations. See Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995).

Under Rule 9(b), a party alleging a claim sounding in fraud must “state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b); see Kearns v. Ford Motor Co., 567 F.3d 1120, 1145 (9th Cir. 2009). The party “must set forth what is false or misleading about a statement, and why it is false.” In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994). In other words, a party must plead the “who, what, when, where, and how” of the alleged misconduct. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003); Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997). Rule 9(b) is meant to ensure that fraud allegations are “specific enough to give defendants notice of the particular misconduct so that they can defend against the charge and not just deny that they have done anything wrong.” Kearns, 567 F.3d at 1124.

Under Rule 12(f), “[t]he court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Motions to strike, however, “are generally regarded with disfavor.” Neilson v. Union Bank of Cal., N.A., 290 F.Supp.2d 1101, 1152 (C.D. Cal. 2003). They will generally only be granted if “the matter has no logical connection to the controversy at issue and may prejudice one or more of the parties to the suit.” Rivers v. Cnty. of Marin, 2006 WL 581096, at *2 (N.D. Cal. Mar. 7, 2006). When the moving party cannot adequately demonstrate such prejudice, courts frequently deny motions to strike even when the offending matter technically falls in one or more of the Rule 12(f) categories. Id. When ruling on a Rule 12(f) motion to strike, “the Court takes the plaintiff's allegations as true and must liberally construe the complaint in the light most favorable to the plaintiff.” Go Maps, Inc. v. Ins. Claims Assocs. Agency Inc., 2023 WL 3149267, at *2 (C.D. Cal. Feb. 28, 2023) (quoting Stearns v. Select Comfort Retail Corp., 763 F. Supp. 2d 1128, 1140 (N.D. Cal. 2010)). “If the court is in doubt as to whether the challenged matter may raise an issue of fact or law, the motion to strike should be denied, leaving an assessment of the sufficiency of the allegations for adjudication on the merits.” Martel v. Cadjew, 2011 WL 4386209, at *2 (E.D. Cal. Sept. 20, 2011); see also S.E.C. v. Gendarme Cap. Corp., 2012 WL 346457, at *3 (E.D. Cal. Jan. 31, 2012) (“It is not for the court to ‘resolve disputed and substantial factual or legal issues in deciding a motion to strike.’ ”) (quoting Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010)).

IV. DISCUSSION

Defendant moves to dismiss Plaintiffs' FAC in its entirety on numerous grounds. (Mot. at 2.) To the extent Plaintiffs' claims are presently justiciable, the Court addresses each of Defendant's arguments in turn.

A. Haynie's Standing

Defendant argues Haynie fails to allege he has been sufficiently injured to establish Article III standing. (Mot. at 12–13.) The Court agrees.

As a preliminary matter, Haynie's allegations as they relate to his personal experience are relatively conclusory. He generally describes the defects he allegedly experienced, but, unlike Gonzalez, does not provide any particular examples. (See FAC ¶ 162.) He asserts that he took his vehicle into a dealership for repair many times but provides no details or information on what repairs were attempted, whether he was left without a vehicle or was otherwise inconvenienced, or whether he ever had to spend any money as a result. (Id. ¶ 166.) And critically, he asserts that “[f]inally, in April 2023, after a dealership had indicated that the car was in good working order, Haynie sold the vehicle, although he subsequently heard that the vehicle continued to have problems.” (Id. ¶ 168.) He does not allege that he suffered a loss when he sold the vehicle. To the extent Plaintiffs speculate based on hearsay that Haynie's vehicle “continue[s] to have problems,” those problems do not injure Haynie. See Quackenbush v. Am. Honda Motor Co., Inc., 2021 WL 6116949, at *7 (N.D. Cal. Dec. 27, 2021) (explaining an original vehicle owner may “pass[ ] on” the overpayment related to a defective vehicle to a buyer, leaving the original owner “financially whole”); Licul v. Volkswagen Grp. of Am., Inc., 2013 WL 6328734, at *5 (S.D. Fla. Dec. 5, 2013) (“Marles purchased the Jetta at a price that did not take account of the defect, and she sold the Jetta at a price that did not take account of the defect. She therefore did not suffer the loss of any value in the Jetta that could constitute ‘actual damages.’ ”). Accordingly, Haynie's claims must be dismissed for lack of standing.³

B. Infotainment Defect Claims

Defendant argues Gonzalez's Infotainment Defect claims are neither constitutionally nor prudentially ripe. (Mot. at 7–9; Dkt. 57 [Reply] at 2–5.) The Court agrees that her Infotainment Defect claims are not prudentially ripe.

“To evaluate the prudential component of ripeness, [courts] weigh two considerations: the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.” Wolfson v. Brammer, 616 F.3d 1045, 1060 (9th Cir. 2010) (internal quotation marks and citation omitted). “Prudential considerations of ripeness are discretionary.” Thomas v. Anchorage Equal Rts. Comm'n, 220 F.3d 1134, 1142 (9th Cir. 2000). “Issues are fit for judicial decision when they would not benefit from any further factual development and when the court would be in no better position to adjudicate the issues in the future than it is now.” Elkins v. Am. Honda Motor Co., 2020 WL 4882412, at *5 (C.D. Cal. July 20, 2020) (internal quotation marks and citation omitted). “To meet the hardship requirement, a litigant must show that withholding review would result in direct and immediate hardship and would entail more than possible financial loss.” Stormans, Inc. v. Selecky, 586 F.3d 1109, 1126 (9th Cir. 2009).

Both relevant prudential ripeness considerations weigh in favor of dismissing Gonzalez's Infotainment Defect claims. As to the first factor, the “court will be better positioned to rule on the efficacy and legal sufficiency of Honda's [recall]” once Gonzalez has attempted to take advantage of the recall and the free repair. See Elkins, 2020 WL 4882412, at *5. At this time, Gonzalez has not taken advantage of the relevant recall and obtained the free repair that could resolve the Infotainment Defect. (Id. ¶¶ 64, 109.) Although Gonzalez alleges that “[i]n light of Honda's established pattern of offering purported fixes that do not ultimately resolve the problem, Honda's remedial actions do not satisfy its ongoing obligations to consumers,” (FAC ¶ 109), that is mere speculation. See Sugasawara v. Ford Motor Co., 2019 WL 3945105, at *5 (N.D. Cal. Aug. 21, 2019) (“Plaintiffs' allegation that Ford's proffered remedy is ineffectual is conclusory and speculative.”). In short, Gonzalez “asks the Court to deal in hypotheticals,” which does not serve the interests of justice or judicial economy. See Elkins, 2020 WL 4882412, at *5. In analogous cases, courts have dismissed claims without prejudice when a plaintiff does not avail themselves to a warranty program or recall because the claims are not prudentially ripe. See, e.g., Elkins, 2020 WL 4882412, at *6 (concluding that plaintiffs' defective vehicle claims “will be more definitely presented for sound judgment by the court at a future date”); Guan v. Mercedes-Benz USA, LLC, 2022 WL 17089817, at *5 (N.D. Cal. May 17, 2022) (finding vehicle defect claims “unfit for judicial decision at this time” when plaintiffs did not take advantage of extended warranty and reimbursement program).

As to the second factor, Gonzalez's allegations do not “show that withholding review would result in direct and immediate hardship and would entail more than possible financial loss.” Wolfson, 616 F.3d at 1060. Indeed, Gonzalez does not even clearly allege that her vehicle currently suffers from the Infotainment Defect. Gonzalez concedes that since she most recently received her vehicle from the dealer, “the audio problems have improved.” (FAC ¶ 149.) Nonetheless, Gonzalez alleges “[u]pon information and belief and based on the intermittent nature of the Defects, her Defective Vehicle continues to suffer from the Defects.” (Id. ¶ 21.) Such a conclusory pleading fails to explain whether or not her vehicle continues to experience symptoms associated with the alleged Infotainment Defect. The Court is somewhat perplexed by an allegation made upon information and belief when it is Gonzalez's vehicle—either she has experienced symptoms associated with the alleged Infotainment Defect since the vehicle's last repair or she has not. And even if her vehicle does continue to suffer from the Infotainment Defect, her “claims would be financial in nature.” See Elkins, 2020 WL 4882412, at *6; see also Guan, 2022 WL 17089817, at *5 (finding the plaintiff in a car defect case did not “show[ ] that withholding review would result in direct and immediate hardship and would entail more than possible financial loss”) (internal quotation marks and citation omitted).

C. Braking Defect Claims

Defendant argues that Gonzalez fails to allege the Braking Defect. (Mot. at 9.) The Court disagrees. Gonzalez alleges, in detail, how and when she experienced Braking Defect manifestations. (FAC ¶¶ 143, 149.) For instance, in June 2023, Gonzalez alleges that she was driving on the highway at approximately 70 miles per hour when, without warning and within a matter of seconds, her vehicle braked without cause and dropped to 55 miles per hour. (Id. ¶ 149.) Defendant does not meaningfully rebut that such allegations would normally survive a motion to dismiss. (See Mot. at 9; Reply at 6.) Instead, Defendant essentially disputes that such events ever actually occurred and insinuates that Gonzalez copied her allegations from similar class actions involving Defendant's vehicles. Such an argument is inappropriate at this stage. Defendant points to repair records involving Gonzalez's vehicle that do not mention Gonzalez raising the Braking Defect.⁴ But even were the Court to consider those records, at best they create an inference that Gonzalez may not have experienced the Braking Defect as she now claims because if she had, she would have reported them to the dealership, and the dealership would have made a notation of her report. Such an argument in unavailing at present because in assessing a motion to dismiss, the Court must accept all material allegations in the complaint as true and construe them in the light most favorable to Gonzalez. See Skilstaf, Inc., 669 F.3d at 1014.

D. Pre-Sale Knowledge of the Braking Defect

Defendant argues that Gonzalez's Braking Defect claims under state common law fraud and consumer protection statutes must be dismissed because Gonzalez fails to sufficiently allege that Defendant had pre-sale knowledge of the Braking Defect. (Mot. at i, 10.) The Court agrees. Gonzalez can only hold Defendant liable for failing to disclose the Braking Defect when Gonzalez purchased her vehicle if Defendant was aware of the Braking Defect at that time. See Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1145 (9th Cir. 2012) (“Plaintiffs must allege HP's knowledge of a defect to succeed on their claims of deceptive practices and fraud.”) Here, Gonzalez's pre-sale knowledge allegations are insufficient.

In opposition, Gonzalez points to the following to show Defendant's pre-sale knowledge of the Braking Defect: “(1) consumer's direct complaints to Honda; (2) testing data; (3) Honda's own communications, including technical service bulletins (‘TSBs’); (4) pre-existing litigation involving earlier makes and models with the same infotainment and braking systems; (5) dealership data; and (6) dated, consumer complaints on the NHTSA for Defective Vehicles and earlier makes and models with the same braking systems.” (Opp. at 8–9 [collecting allegations].)

The consumer complaints to Defendant and NHTSA that involve the Braking Defect in the relevant vehicles are relatively few, and Gonzalez does not allege that the number of braking complaints is out of the ordinary relative to the number of vehicles at issue. Such a limited number and scope of complaints are insufficient to create a duty to disclose. See Sloan v. Gen. Motors LLC, 2017 WL 3283998, at *7 (N.D. Cal. Aug. 1, 2017) (citing Williams v. Yamaha Motor Co., 851 F.3d 1015, 1026 (9th Cir. 2017)) (“[T]he Ninth Circuit has held that consumer complaints suffice to establish knowledge only where there were an unusual number of complaints, such that the manufacturer would be on notice of a specific problem.”).

Gonzalez's allegations regarding “testing data” and “dealership data” are entirely speculative, lack specificity, and fail to link alleged testing to the model years at issue in this case. (See, e.g., FAC ¶¶ 13, 41–43, 119.) Such allegations are insufficient to create a duty to disclose. See Grodzitsky v. Am. Honda Motor Co., 2013 WL 690822, at *6 (C.D. Cal. Feb. 19, 2013) (finding “Plaintiffs' generalized assertion that unspecified ‘pre-release testing data’ and ‘aggregate data from Honda dealers’ ” failed to establish a plausible inference of knowledge).

The remainder of Gonzalez's allegations fail because they largely relate to model years not at issue in this case. To get around this, Gonzalez alleges “[u]pon information and belief” that the vehicles in this case suffering from the Braking Defect “used the same or substantially similar defective parts in vehicles produced in prior years which were known to have these same defects.” (FAC at 14.) While Gonzalez points to significant evidence from other class actions based on different vehicles, she fails to connect the dots. That is, she does not explain the factual basis for asserting that the parts at issue for the vehicles in this case are the same or substantially similar as the parts in vehicles at issue in other cases. Accordingly, Gonzalez's allegations fail to establish that Defendant had pre-sale knowledge of the Braking Defect. See Herrera v. Volkswagen Grp. of Am., Inc., 2016 WL 10000085, at *5 (C.D. Cal. Sept. 9, 2016) (dismissing claim based on allegation on information and belief that defendant replaced parts with similarly defective parts for failure to allege factual basis).

E. Choice of Law and Nationwide Allegations

Defendant argues that Gonzalez's California law claims and nationwide class allegations should be dismissed because California's choice-of-law rule mandates that the law of the state where individuals purchased Defendant's vehicles should apply and that material differences across state law preclude the certification of a nationwide class. (Mot. at 13–15; Reply at 12–15.) The Court agrees that California law does not apply to Gonzalez's claims and that the nationwide allegations should be stricken.

First, Gonzalez argues in opposition that California law should apply here by invoking a choice-of-law provision in an “Automobile Dealer Sales and Service Agreement” drafted in November 2002 and printed in April 2008, presumably between Defendant and an independent dealer (Dealmaker of Potsdam, LLC, d/b/a Dealmaker Honda of Potsdam, located in Potsdam, NY), which lacks any alleged relationship to the facts of this case. (Opp. at 15–16; FAC Ex. 2.) Gonzalez argues she can enforce the choice-of-law provision as a third-party beneficiary. Accordingly, Gonzalez must establish “not only (1) that [she is] likely to benefit from the contract, but also (2) that a motivating purpose of the contracting parties is to provide a benefit to [her], and further (3) that permitting [her] to bring [her] own breach of contract action against a contracting party is consistent with the objectives of the contract and the reasonable expectations of the contracting parties.” Goonewardene v. ADP, LLC, 6 Cal. 5th 817, 821 (2019). Gonzalez fails to meet her burden. There is no indication that a dealership with no connection to Gonzalez at all intended to benefit Gonzalez or allow her to bring her own action against Defendant based on the contract.⁵ The Court also notes that in the case from which Gonzalez appears to have taken the document from the docket,⁶ the court did not apply California state law to the entire case. See Banh v. Am. Honda Motor Co., Inc., 2020 WL 4390371, at *6 (C.D. Cal. July 28, 2020) (“Because this case involves seven states' laws on breach of express warranty, the Court begins by clarifying the applicable law.”).

Second, Gonzalez argues that California law applies under California's governmental interest test. (Opp. at 16.) Gonzalez is correct to apply to the governmental interest test, but she arrives at the wrong conclusion. In Mazza v. Am. Honda Motor Co., plaintiffs brought a putative nationwide class action against Honda, asserting claims under California's Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act and for unjust enrichment related to Honda's marketing of its collision mitigation braking system. Mazza v. Am. Honda Motor Co., 666 F.3d 581, 587 (9th Cir. 2012) (overruled on other grounds by Olean Wholesale Grocery Corp. v. Bumble Bee Foods LLC, 31 F.4th 651 (9th Cir. 2022)). The district court certified a nationwide class, and the Ninth Circuit reversed after engaging in a detailed analysis of California's choice-of-law rules. Id. at 590. The Ninth Circuit employed California's three-step governmental interest test. Id. Under that test, assuming a plaintiff can meet his initial burden of showing that application of California law to the claims of each class member would be constitutional, the defendant must show that the relevant laws of the affected jurisdictions are materially different. Id. at 589–90. Then, the defendant must show that the foreign jurisdictions have an “interest in the application of [their] own law under the circumstances of the particular case” such that “a true conflict exists.” Id. at 590. Finally, if they can show that there is a true conflict, the defendant must engage in a comparative impairment analysis and demonstrate that the foreign state's interests in the matter are stronger than California's such that the foreign state's interests “would be more impaired if [their] law[s] were not applied.” Id. After applying that test, the Ninth Circuit held that application of California law to claims arising from transactions outside of California was error, and the district court further erred by certifying a nationwide class on that basis. See id. at 594.

Mazza resolves the choice-of-law analysis here. As an initial matter, Mazza addressed the majority of the claims at issue. Id. at 587. The Ninth Circuit explained that consumer protection laws and unjust enrichment claims vary materially across states. Id. at 591. This is because “[c]onsumer protection laws are a creature of the state in which they are fashioned. They may impose or not impose liability depending on policy choices made by state legislatures or, if legislators left a gap or ambiguity, by state supreme courts.” Id. The Ninth Circuit also held that when automobile sales take place within different jurisdictions, “each state has a strong interest in applying its own consumer protection laws to those transactions.” Mazza, 666 F.3d at 592. And lastly, the Ninth Circuit held “foreign states have a strong interest in the application of their laws to transactions between their citizens and corporations doing business within their state. Conversely, California's interest in applying its law to residents of foreign states is attenuated.” Id. at 594.

Because Gonzalez purchased her vehicle in a state other than California, based on the Ninth Circuit's binding reasoning in Mazza, the Court can only conclude that the Gonzalez cannot proceed under California law. To the extent Gonzalez argues otherwise because “Honda was founded in, is headquartered in, has a testing proving center in, and directs sales, marketing, warranties, and recalls from, California,” (Opp. at 15), the Ninth Circuit and other courts have rejected that argument. See Mazza, 666 F.3d at 590 (applying other states' laws despite the fact that Honda's corporate headquarters was in California, as was the advertising agency that produced the allegedly fraudulent misrepresentations); Hageman v. Hyundai Motor Am., 2024 WL 694378, at *4 (C.D. Cal. Jan. 5, 2024) (rejecting argument that California law should apply based on Hyundai's California headquarters); Davison v. Kia Motors Am., Inc., 2015 WL 3970502, at *3 (C.D. Cal. June 29, 2015) (rejecting argument that California law should apply even though “California has an interest in regulating Kia as Kia's corporate office is located in California.”).

Additionally, in accordance with Mazza, it is appropriate to strike Gonzalez's nationwide class allegations. See Route v. Mead Johnson Nutrition Co., 2013 WL 658251, at *8 (C.D. Cal. Feb. 21, 2013) (“[W]here the matter is sufficiently obvious from the pleadings, a court may strike class allegations.”). Gonzalez argues that the Court should wait until discovery and class certification to assess the viability of her nationwide claims. (Opp. at 14.) But she fails to explain how any factual development could impact the choice-of-law analysis here, and numerous courts, including this one, have held that district courts should apply Mazza at the pleading stage. See, e.g., Woo v. Am. Honda Motor Co., 462 F. Supp. 3d 1009, 1023 (N.D. Cal. 2020) (addressing similar allegations as in this case); Hageman, 2024 WL 694378, at *4; Davison, 2015 WL 3970502, at *2 (“While Mazza was decided at the class certification stage, the principle articulated in Mazza applies generally and is instructive even when addressing a motion to dismiss.”) (internal quotation marks and citation omitted); see also Drake v. Toyota Motor Corp., 2020 WL 7040125, at *3 (C.D. Cal. Nov. 23, 2020) (“Courts in this circuit have overwhelmingly ruled that plaintiffs do not have standing to assert claims from states in which they do not reside and that it is appropriate to address standing in advance of class certification.”) (cleaned up).

F. South Carolina Claims

In the alternative to her California claims, Gonzalez pleads the following claims under South Carolina law: breach of implied warranty of merchantability, violation of the South Carolina Unfair Trade Practice Act (“SCUTPA”), violation of the South Carolina Regulation of Manufacturers, Distributors, and Dealers Act (“MDDA”), fraud by omission and concealment, and unjust enrichment. (FAC 173, ¶¶ 175, 274–340.) Gonzalez also seeks injunctive relief under South Carolina law. (Id. ¶ 318.) The Court addresses each of Defendant's remaining arguments for dismissal in turn.

1. Pre-suit Notice of Alleged Breach of Implied Warranty

Defendant argues Gonzalez's breach of implied warranty of merchantability claim must be dismissed because South Carolina law requires that “the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy,” and Gonzalez did not allege any pre-suit notice. (Mot. at 17 [quoting S.C. Code Ann. § 36-2-607(3)(a)].) In opposition, Gonzalez argues that Rule 3 of the Federal Rules of Civil Procedure eliminates state law pre-suit notice requirements. (Opp. at 18–19.) The Ninth Circuit recently addressed a similar issue, holding that a Washington state law requiring a claimant to file a declaration declining to submit the case to arbitration when filing a medical malpractice suit apply in federal court “conflicts with Rule 3 by adding additional, procedural steps for commencing a suit beyond those that Rule 3 contemplates,” and therefore does not apply in federal court. Martin v. Pierce Cnty., 34 F.4th 1125, 1131–32 (9th Cir. 2022). The Court sees no material difference between Martin and this case, and therefore must follow the Ninth Circuit's binding authority—as such, South Carolina's pre-suit notice rule does not justify dismissal.

2. SCUTPA Class Claim

Defendant argues Gonzalez may not bring a SCUTPA claim on a class wide basis because SCUTPA expressly provides that a person “may bring an action individually, but not in a representative capacity.” (Mot. at 17 [quoting S.C. Code Ann. § 39-5-140].) In opposition, Gonzalez argues that in federal court, Rule 23 of the Federal Rules of Civil Procedure govern and SCUTPA's prohibition on representative claims is preempted it is procedural. (Opp. at 17–18.) However, numerous South Carolina federal courts have concluded otherwise, holding that the class prohibition in SCUTPA's text conveys a substantive right rather than a procedural mechanism. See, e.g., Fejzulai v. Sam's W., Inc., 205 F. Supp. 3d 723, 729 (D.S.C. 2016) (“The Court declines to contravene the express direction of the legislature that created the right in question, and dismisses Plaintiffs' representative SCUTPA claims accordingly.”); In re TD Bank, N.A., 150 F. Supp. 3d 593, 635 (D.S.C. 2015) (explaining that “SCUTPA's class action bar survives Shady Grove”); see also Dema v. Tenet Physician Servs.-Hilton Head, Inc., 383 S.C. 115, 122 (2009) (explaining “[f]ederal courts have recognized that class action suits may not be brought pursuant to SCUTPA” and collecting federal cases); In re Auto. Parts Antitrust Litig., 29 F. Supp. 3d 982, 1013 (E.D. Mich. 2014) (“[T]he Court is persuaded by the post Shady Grove authority cited that ADPs cannot bring their SCUTPA claim on behalf of a putative class.”). The Court agrees with that line of authority—“SCUTPA claimants should not be permitted to transform the nature and scope of the statutory right conferred upon them merely by pleading in federal court pursuant to Rule 23.” Fejzulai, 205 F. Supp. 3d at 729.

3. Duty to Disclose

Defendant argues Gonzalez's claims for violations of SCUTPA, the MDDA, and for fraud by omission and concealment must be dismissed because she was not in a fiduciary or confidential relationship with Defendant, and therefore Defendant had no duty to disclose. (Mot. at 17.) Indeed, Gonzalez alleges specifically that she made the affirmative decision not to buy a new vehicle distributed directly by Defendant. (FAC ¶¶ 136–37.) In opposition, Gonzalez argues only that under South Carolina law, when plaintiffs plausibly allege that a defect implicates vehicle safety, the defendant has a duty to disclose it. (Opp. at 19–20.) The Fourth Circuit, applying South Carolina law in the motor vehicle defect context, rejected this very argument, holding that “the South Carolina courts have made clear that a duty to disclose arises in only three circumstances,” none of which have been alleged here. Jimenez v. DaimlerChrysler Corp., 269 F.3d 439, 447 (4th Cir. 2001). Accordingly, Gonzalez's claims for violations of SCUTPA, the MDDA, and for fraud by omission and concealment must be dismissed.

4. Economic Loss Doctrine

As another basis for the dismissal of Gonzalez's fraud claim, Defendant argues that the South Carolina economic loss doctrine bars Gonzalez's fraud claim. (Mot. at 18; Reply at 18.) Gonzalez argues the economic loss doctrine does not apply here because they have plausibly alleged the defects at issue created safety hazards. (Opp. at 19–20.) The South Carolina Supreme Court has rejected Gonzalez's argument—affirming summary judgment on fraud claims under the economic loss doctrine in a case in which the alleged defect caused vehicles to catch fire, a clear safety hazard. Sapp v. Ford Motor Co., 386 S.C. 143, 145, 150 (2009) (describing defect as “the cruise control stopped working, and the truck caught fire shortly after Sapp parked”); see also In re Takata Airbag Prod. Liab. Litig., 464 F. Supp. 3d 1291, 1309 (S.D. Fla. 2020) (explaining scope of South Carolina's economic loss doctrine). For this reason, too, Gonzalez's fraud claim must be dismissed.

5. Unjust Enrichment

Citing South Carolina law, Defendant argues that Gonzalez's unjust enrichment claim must be dismissed because “Plaintiffs do not plausibly allege that she conferred any benefit on AHM.” (Mot. at 16; see also Reply at 17.) In opposition, Gonzalez argues that “[p]rivity is not required for a showing of unjust enrichment under California law” and that “inferences” drawn from the FAC “suggest that Honda got indirect benefits from selling the Defective Vehicles.” (Opp. at 21.)

To recover on an unjust enrichment claim under South Carolina law, “a plaintiff must show: (1) a benefit conferred upon the defendant by plaintiff; (2) realization of that benefit by the defendant; and (3) retention by the defendant of the benefit under conditions that make it unjust for it to retain the benefit.” In re Auto. Parts Antitrust Litig., 29 F. Supp. 3d at 1026 (citing Ellis v. Smith Grading & Paving, Inc., 294 S.C. 470, 474–75 (Ct. App. 1988)). Gonzalez specifically alleges that she intentionally chose not to buy a new vehicle, which would clearly benefit Defendant—a distributor of new Honda vehicles—and instead purchased a used vehicle. (FAC ¶¶ 136–37.) Gonzalez has not sufficiently alleged that she conferred a benefit upon Defendant.

6. Injunctive Relief

Defendant argues that Gonzalez lacks standing to seek declaratory and injunctive relief because she failed to allege that she faces any threat of future harm from misleading representations or advertising. (Mot. at 20.) In opposition, Gonzalez argues that she “still owns her vehicle and as such has claims for injunctive and declaratory relief as described in the FAC.” (Opp. at 22.) Gonzalez appears to concede that she lacks standing for “injunctive or declaratory relief for misleading representations or false advertising based on [a] lack of allegations of threat of future harm,” but goes on to assert that Gonzalez would have standing “regarding injunctive and declaratory relief for other claims, including warranty and remediation solutions.” (Id. at 22–23.) But as Defendant points out, Gonzalez's requested injunction seems to pertain to only the alleged false advertising and failure to disclose. (See FAC ¶¶ 243, 305, 306–318.) As alleged, Gonzalez lacks standing to seek the declaratory and injunctive relief she requests. See Plotts v. Am. Honda Motor Co., 2023 WL 4843342, at *4 (C.D. Cal. June 9, 2023) (“Plaintiffs point to no allegations of a threat of future harm from misleading representations or advertising, so they lack standing for such injunctive and declaratory relief.

G. Leave to Amend

“The standard for granting leave to amend is generous.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 701 (9th Cir. 1988). “Federal Rule of Civil Procedure 15(a) provides that a trial court shall grant leave to amend freely ‘when justice so requires.’ ” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000). “It is black-letter law that a district court must give plaintiffs at least one chance to amend a deficient complaint, absent a clear showing that amendment would be futile.” Nat'l Council of La Raza v. Cegavske, 800 F.3d 1032, 1041 (9th Cir. 2015) (emphases added). “Amendment is futile if the claim sought to be added is not viable ․” Hooper v. Shinn, 985 F.3d 594, 622 (9th Cir. 2021). The Court cannot say that it would be impossible for Plaintiffs to allege facts in their complaint sufficient to survive dismissal. Accordingly, the dismissed claims will be dismissed with leave to amend.

V. CONCLUSION

For the foregoing reasons, Defendant's motion to dismiss is GRANTED IN PART AND DENIED IN PART. Defendant's motion to dismiss regarding Haynie's claims is GRANTED WITH LEAVE TO AMEND for lack of standing. Similarly, Defendant's motion to dismiss regarding Gonzalez's claims based on the Infotainment Defect is GRANTED WITH LEAVE TO AMEND because those claims are not prudentially ripe. Defendant's motion to dismiss regarding Gonzalez's claims under SCUTPA and the MDDA, for fraud and concealment, for breach of contract as third-party beneficiaries, for unjust enrichment, and for injunctive relief is GRANTED WITH LEAVE TO AMEND. Defendant's motion to dismiss regarding Gonzalez's California and nationwide class action claims is GRANTED, and the claims are STRICKEN. Defendant's motion to dismiss regarding Gonzalez's breach of implied warranty of merchantability claim is DENIED. If Plaintiffs elect to file an amended complaint addressing the deficiencies identified in this order they shall do so by May 6, 2024. In addition to the “clean” version of the second amended complaint, such a filing shall also include a “redlined” version clearly indicating all changes. Plaintiffs may not add new causes of action or new parties without a stipulation or leave of the Court. If Plaintiffs do not file an amended complaint by May 6, 2024, Defendant shall file an answer by May 20, 2024.

FOOTNOTES

1.   Plaintiffs voluntarily dismissed their claims against Honda Motor Co., Ltd. (See Dkt. 53.)

2.   Having read and considered the papers the parties presented, the Court finds this matter appropriate for disposition without a hearing. See Fed. R. Civ. P. 78; Local Rule 7-15. Accordingly, the hearing set for March 11, 2024, at 1:30 p.m. is hereby vacated and off calendar. The parties' stipulation to continue the hearing on this matter is DENIED AS MOOT. (See Dkt. 60.)

3.   The Court does not address Haynie's allegations further because the Court finds that Haynie lacks Article III standing, and the Court lacks jurisdiction over his claims.

4.   Because the Court does not rely on the documents for which Defendant requests judicial notice, Defendant's request for judicial notice is DENIED AS MOOT. (See Dkt. 29-3.)

5.   For the same reasons, Gonzalez cannot sue for breach of the Automobile Dealer Sales and Service Agreement. (See FAC at 161–62 [alleging breach of contract as third-party beneficiaries].)

6.   The header of the FAC's Exhibit 2 suggests that the document was originally filed in CV 19-05984-RGK (ASx) on January 15, 2020.

CORMAC J. CARNEY UNITED STATES DISTRICT JUDGE