Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Ford steers clear of CLRA restitution claim, (Aug 11, 2014)

By Greg Hammond, J.D.

Consumers were unable to state a valid California Consumers Legal Remedies Act (CLRA) restitution claim against Ford Motor Co., arising from the rear tailgate appliqué of certain Ford sport utility vehicles (SUVs), which are allegedly prone to cracking. In dismissing the CLRA restitution claim, the federal district court in San Francisco determined that the consumers failed to provide Ford with pre-suit notice, as required under the statute (In re Ford Tailgate Litigation, August 8, 2014, Seeborg, R.).

Background. Consumers filed numerous putative class action lawsuits against Ford for allegedly being aware that rear tailgate appliqué panels were prone to cracking on particular SUVs. The consumers alleged that they suffered economic damages from repair costs and reduced value in their vehicles, and that the defective tailgates posed substantial safety risks. Ford moved to dismiss the consumers’ CLRA, unjust enrichment, and Magnuson-Moss Warranty Act claims. The company also moved to strike three new named plaintiffs in the consumer’s third consolidated amended class action complaint.

CLRA claims. To seek damages under the CLRA, the consumers were required to notify Ford 30 or more days prior to commencing the action for damages that it violated the CLRA, and demand that Ford correct, repair, replace, or otherwise rectify the violation. According to the court, the consumers’ CLRA restitution claim was previously dismissed for failure to provide Ford with the required pre-suit notice. In their third amended complaint, the consumers alleged that they “served Ford with written notice of Ford’s unfair methods of competition and unfair and deceptive acts and practices and a demand for repair and restitution.” However, the court concluded that this allegation was inadequate under the statute, as the record reflected that the consumers’ notice was sent to Ford “well after” the date they commenced their action. Consequently, the CLRA restitution claim was dismissed without leave to amend.

The court noted that its dismissal did not extend to the consumers’ request for injunctive remedy under the CLRA. However, one consumer’s CLRA claims were dismissed in their entirety, due to the tolling of the applicable three-year statute of limitations. The Magnuson-Moss Warranty Act claim also was dismissed without leave to amend for the entire class, as they failed to allege any viable warranty claim under any of the consumers’ states.

Additional plaintiffs. As part of their third amended complaint, the consumers named three additional plaintiffs. Ford moved to strike the additional plaintiffs, arguing that the court did not grant leave to add additional named parties and the consumers never requested to do so. However, the court disagreed, noting that no prejudice would result from the addition, as the three new plaintiffs represent states already present in the case, and additional discovery would not present an undue hardship on Ford. In addition, the consumers adequately demonstrated good cause for the new plaintiffs, as they directly relate to glass shattering and Massachusetts law issues previously argued by Ford. Consequently, the motion to strike was denied.

The case number is 11-CV-2953-RS.

Attorneys: Marvin L. Frank (Murray, Frank & Sailer LLP) for Sally J. Nettleson. Fred J. Fresard (Dykema Gossett PLLC) and Amir M. Nassihi (Shook, Hardy & Bacon LLP) for Ford Motor Co.

Companies: Ford Motor Co.

Cases: StateUnfairTradePractices CaliforniaNews