DAVID W. ICHEL (pro hac vice - Gibbs Law Group · JONAS SUGARMAN and QUANG LE, on behalf of themselves and all others similarly situated, Plaintiffs, v. DUCATI NORTH AMERICA, INC.,

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-NOT. OF MOT., MOT. & MP&A ISO MOT. TO DISMISS OR STRIKE CASE NO. CV 10-5246-JF (PSG)

DAVID W. ICHEL (pro hac vice)[email protected] ELIZABETH McGARRY (pro hac vice)[email protected] M. McLAUGHLIN (pro hac vice)[email protected] THACHER & BARTLETT LLP425 Lexington AvenueNew York, New York 10017Telephone: (212) 455-2000Facsimile: (212) 455-2502

SIMONA G. STRAUSS, [email protected] P. BLAKE, [email protected] THACHER & BARTLETT LLP2550 Hanover StreetPalo Alto, California 94304Telephone: (650) 251-5000Facsimile: (650) 251-5002

Attorneys for DefendantDUCATI NORTH AMERICA, INC.

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

JONAS SUGARMAN and QUANG LE, on behalfof themselves and all others similarly situated,

Plaintiffs,

v.

DUCATI NORTH AMERICA, INC.,

Defendant.

Case No. CV 10-5246-JF (PSG)

DEFENDANT DUCATI NORTHAMERICA, INC.’S NOTICE OFMOTION AND MOTION TODISMISS UNDER RULES 12(b)(6)AND 9(b) OR, ALTERNATIVELY,TO STRIKE CLASS ALLEGATIONSUNDER RULES 12(f) AND23(d)(1)(D); MEMORANDUM OFPOINTS AND AUTHORITIES INSUPPORT THEREOF

Date: April 22, 2011Time: 9 a.m.Judge: Honorable Jeremy D. FogelCourtroom: 3, 5th Floor

[Filed Concurrently With: BlakeDeclaration; Request for Judicial Notice;[Proposed] Order]

Case5:10-cv-05246-JF Document37 Filed02/14/11 Page1 of 29

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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ............................................................................................................ ii

NOTICE OF MOTION AND MOTION .......................................................................................... 1

MEMORANDUM OF POINTS AND AUTHORITIES .................................................................. 1

PRELIMINARY STATEMENT....................................................................................................... 1

SUMMARY OF ALLEGATIONS ................................................................................................... 3

ARGUMENT .................................................................................................................................... 5

I. PLAINTIFFS’ BURDEN AT THE PLEADING STAGE........................................ 5

II. PLAINTIFFS’ CLAIMS FOR BREACH OF EXPRESS WARRANTY FAIL....... 6

III. COUNT III SHOULD BE DISMISSED BECAUSE PLAINTIFFS HAVENOT ALLEGED A VIOLATION OF THE IMPLIED COVENANT OFGOOD FAITH AND FAIR DEALING IN ANY EXPRESS WARRANTY......... 11

IV. PLAINTIFFS FAIL TO STATE A CLAIM UNDER THE CLRA AND UCL ..... 12

A. No Allegation Of Pre-Sale Knowledge ....................................................... 12

B. Claims That Ducati’s Actions Under Its Repair Or Replace WarrantyWere Insufficient Cannot Support A CLRA Or UCL Claim ...................... 15

C. No Duty To Disclose Is Alleged ................................................................. 16

D. No Reliance On Any Ducati Representation Or Omission Is Alleged ....... 18

V. FLORIDA RESIDENT SUGARMAN’S CLRA AND UCL CLAIMSSHOULD BE DISMISSED .................................................................................... 18

VI. PLAINTIFFS’ PURPORTED CLASS ALLEGATIONS SHOULD BESTRICKEN ............................................................................................................. 20

A. The Proposed Class Is Not Ascertainable by Reference to ObjectiveCriteria......................................................................................................... 20

B. Plaintiffs’ Putative Class Allegations Raise PredominantlyIndividualized Issues ................................................................................... 21

CONCLUSION ............................................................................................................................... 24


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TABLE OF AUTHORITIES

Page(s)

Federal Cases

Anunziato v. eMachines, Inc.,402 F. Supp. 2d 1133 (C.D. Cal. 2005)........................................................................................... 8

Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ................................................................................. 5, 12

Baba v. Hewlett-Packard Co. (“Baba I”),No. 09-5946, 2010 WL 2486353 (N.D. Cal. June 16, 2010) ............................................ 13, 15, 18

Baba v. Hewlett-Packard Co. (“Baba II”),No. 09-5946, 2011 WL 317650 (N.D. Cal. Jan. 28, 2011) ....................................................... 6, 14

Baggett v. Hewlett-Packard Co.,No. 07-0667, 2009 WL 3178066 (C.D. Cal. Sept. 29, 2009)...................................................15-16

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ..................................................................... 5, 15

Berenblat v. Apple, Inc.,No. 08-4969, 2010 WL 1460297 (N.D. Cal. Apr. 9, 2010) (Fogel, J.) .................. 13-14, 14-15, 18

Boland, Inc. v. Rolf C. Hagen (USA) Corp.,685 F. Supp. 2d 1094 (E.D. Cal. 2010)......................................................................................... 18

Brothers v. Hewlett-Packard Co.,No. 06-2254, 2007 WL 485979 (N.D. Cal. Feb. 12, 2007) ............................................................ 8

Daniels-Hall v. National Educ. Ass’n,No. 08-35531, 2010 WL 5141247 (9th Cir. Dec. 20, 2010) ....................................................... 4, 5

Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147 (1982).................................................................... 20

Hoey v. Sony Elecs. Inc., 515 F. Supp. 2d 1099 (N.D. Cal. 2007)................................................ 15

Hovsepian v. Apple, Inc.,No. 08-5788, 2009 WL 5069144 (N.D. Cal. Dec. 17, 2009) (Fogel, J.)....................... 6, 20, 21, 22

Ice Cream Distributors of Evansville, LLC v. Dreyer’s Grand Ice Cream, Inc.,No. 09-5815, 2010 WL 3619884 (N.D. Cal. Sept. 10, 2010) ................................................. 19, 20

In re Bridgestone/Firestone, Inc., 288 F.3d 1012 (7th Cir. 2002) ................................................ 23

In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 174 F.R.D. 332 (D.N.J. 1997) ........... 23

In re Hitachi Telev. Optical Block Cases,No. 08-1746, 2011 WL 9403 (S.D. Cal. Jan. 3, 2011).................................................................. 23

In re HP Inkjet Printer Litig.,No. 05-3580, 2008 WL 2949265 (N.D. Cal. July 25, 2008) (Fogel, J.) (unpublished) .......... 23, 24

In re Paxil Litig., 212 F.R.D. 539 (C.D. Cal. Jan. 13, 2003) ........................................................ 21


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In re Pharm. Indus. Av’g Wholesale Price Litig., 230 F.R.D. 61 (D. Mass. 2005) ...................... 23

Johnson v. Hewlett-Packard Co.,No. 09-3596, 2010 WL 2680772 (N.D. Cal. July 6, 2010)........................................................... 20

J. P. Morgan & Co., Inc. v. Superior Court,113 Cal. App. 4th 195 (2003)........................................................................................................ 18

Kearns v. Ford Motor Co.,567 F.3d 1120 (9th Cir. 2009)................................................................................................... 6, 12

KEMA, Inc. v. Koperwhats,658 F. Supp. 2d 1022 (N.D. Cal. 2009) ........................................................................................ 16

Kent v. Hewlett-Packard Co.,No. 09-5341, 2010 WL 2681767 (N.D. Cal. July 6, 2010) (Fogel, J.) ......................7-8, 12, 15, 18

Klein v. Earth Elements, Inc.,59 Cal. App. 4th 965 (1997).......................................................................................................... 12

Kowalsky v. Hewlett-Packard Co.,No. 10-2176, 2010 WL 5141869 (N.D. Cal. Dec. 13, 2010) .......................................................... 8

Long v. Hewlett Packard and Co. (“Long I”),No. 06-2816, 2006 WL 4877691 (N.D. Cal. July 27, 2007)......................................................... 14

Long v. Hewlett-Packard Co. (“Long II”),No. 06-2816, 2007 WL 2994812 (N.D. Cal. Dec. 21, 2006) .......................................................... 8

Morgan v. Harmonix Music Sys., Inc.,No. 08-5211, 2009 WL 2031765 (N.D. Cal. July 7, 2009)............................................... 16, 18, 20

Oestreicher v. Alienware Corp., 544 F. Supp. 2d 964 (N.D. Cal. 2008) ...............12, 13, 14, 16-17

Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985)................................................................. 23

Sanders v. Apple Inc., 672 F. Supp. 2d 978 (N.D. Cal. 2009) (Fogel, J.) ....................... 6, 9, 20, 21

Schwarzkopf v. Intern. Business Machines, Inc.,No. 08-2715, 2010 WL 1929625, at *9 (N.D. Cal. May 12, 2010) .............................................. 23

Stearns v. Select Comfort Retail Corp. (“Stearns I”),No. 08-2746, 2009 WL 1635931 (N.D. Cal. June 5, 2009) (Fogel, J.)............... 6, 7, 20, 21, 22, 23

Stearns v. Select Comfort Retail Corp. (“Stearns II”),No. 08-2746, 2010 WL 2898284 (N.D. Cal. July 21, 2010) (Fogel, J.) .......................... 6-7, 20-21

Tietsworth v. Sears, Roebuck and Co. (“Tietsworth I”),No. 09-288, 2009 WL 1363548 (N.D. Cal. May 14, 2009) (Fogel, J.)........................................... 9

Tietsworth v. Sears, Roebuck and Co. (“Tietsworth II”),No. 09-0288, 2009 WL 3320486 (N.D. Cal. Oct. 13, 2009) (Fogel, J.) ............................14, 17-18

Tietsworth v. Sears, Roebuck and Co. (“Tietsworth III”),720 F. Supp. 2d 1123 (N.D. Cal. 2010) (Fogel, J.) ..........................................16, 17-18, 20, 21, 22


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Tidenberg v. Bidz.com, Inc.,No. 08-5553, 2009 WL 605249 (C.D. Cal. Mar. 4, 2009) ............................................................ 19

Usher v. Greenpoint Mortg. Funding, Inc.,No. 10-0952, 2010 WL 4983468 (E.D. Cal. Dec. 2, 2010) .......................................................... 11

Util. Consumers’ Action Network v. Powernet Global Comm.,No. 06-1773, 2006 U.S. Dist. LEXIS 78546 (S.D. Cal. Oct. 20, 2006) ....................................... 24

Federal Statutes & Regulations

42 U.S.C. § 7541(a)(3) .................................................................................................................. 11

40 C.F.R. § 86.408-78 ..............................................................................................................10-11

Federal Rules

Fed. R. Civ. P. 9(b)...............................................................................................................1, 2, 5-6

Fed. R. Civ. P. 12(b)(6) ................................................................................................................... 1

Fed. R. Civ. P. 12(f) .................................................................................................................. 1, 20

Fed. R. Civ. P. 23(c)(1)(A)............................................................................................................ 20

Fed. R. Civ. P. 23(d)(1)(D) ....................................................................................................... 1, 20

State Cases

Am. Online, Inc. v. Super. Ct., 90 Cal. App. 4th 1 (2001) ............................................................ 19

Careau & Co. v. Security Pac. Bus. Credit, Inc., 222 Cal. App. 3d 1371 (1990)......................... 11

Carey v. Select Comfort Corp.,No. 27 CV 04-015451, 2006 WL 871619 (Minn. Dist. Ct. Jan. 30, 2006)..................................8-9

Daugherty v. Am. Honda Motor Co., 144 Cal. App. 4th 824 (2006)...................................... 13, 18

Polzin v. Chrysler Group LLC,No. A09-405, 2010 WL 2035617 (Minn. Ct. App. May 25, 2010) ................................................ 7

State Statutes

Cal. Bus. & Prof. Code § 17200, et seq .......................................................................................... 1

Cal. Civ. Code § 1750, et seq. ......................................................................................................... 1

Cal. Civ. Code § 1770(a)............................................................................................................... 16


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NOTICE OF MOTION AND MOTION

PLEASE TAKE NOTICE that on April 22, 2011 at 9:00 a.m., or as soon thereafter as the

matter may be heard before the Honorable Jeremy D. Fogel in Courtroom 3, 5th Floor, 280 South

1st Street, San Jose, CA 95113, Defendant Ducati North America, Inc. (“Ducati”) shall and hereby

does move, pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b) for an order dismissing

with prejudice the First Amended Complaint filed by plaintiffs Jonas Sugarman and Quang Le or,

alternatively, for an order striking all purported class allegations from the First Amended

Complaint pursuant to Federal Rules of Civil Procedure 12(f) and 23(d)(1)(D). This Motion is

based on this Notice of Motion and Motion, the annexed Memorandum of Points and Authorities,

the accompanying Declaration of Stephen P. Blake, the accompanying Request for Judicial

Notice, any papers filed in reply, the argument of counsel, all the records and files in this action,

and such additional matters that the Court may deem proper.

MEMORANDUM OF POINTS AND AUTHORITIES

PRELIMINARY STATEMENT

Plaintiffs Jonas Sugarman and Quang Le, purchasers of two models of Ducati motorcycles,

seek to represent a putative nationwide class of every person who during an eight-year period

purchased or leased any of Ducati’s 24 different models of motorcycles that were equipped with

16 different types of custom-molded thermoplastic fuel tanks. Plaintiffs allege that Ducati

breached its express warranty obligations and the implied covenant of good faith and fair dealing,

and violated the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200, et

seq., and Consumers Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750, et seq., by selling

motorcycles equipped with such tanks when it “knew or should have known” and “actively

concealed” that the plastic used in the tanks “is incompatible with the motorcycles’ fuel.” Am.

Compl. ¶¶ 2-3, 80. These claims are fatally flawed as a matter of law, and should be dismissed

with prejudice.

First, plaintiffs’ express warranty claims fail because, according to the Amended

Complaint’s allegations, Ducati has complied with its warranty obligations. A repair or

replacement, as appropriate in the circumstances presented, is the exclusive remedy provided for


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any purported defect in material and workmanship occurring during the warranty period. The

Amended Complaint acknowledges that when any owner or lessee of a Ducati-warranted

motorcycle presents Ducati with a fuel tank experiencing a problem, as a matter of express

warranty and good customer service, it is Ducati’s policy to replace the fuel tank or repair the

problem at no cost to the customer. Id. ¶¶ 2, 26, 57. Indeed, Ducati promptly replaced the fuel

tanks and repaired the motorcycles owned by each of the plaintiffs when they were presented to

Ducati dealers, fully honoring its express warranty in each case. Id. ¶¶ 31, 36. Plaintiffs thus

received exactly what was warranted. Plaintiffs also nowhere allege, as they must for an express

warranty claim, that in purchasing their motorcycles they relied on any specific provision in the

Ducati Limited Warranty or Emissions Warranty.

Plaintiffs’ CLRA and UCL claims should be dismissed for several independent reasons.

Contrary to law, plaintiffs allege that Ducati violated the these statutes simply by selling them

motorcycles that experienced a fuel tank problem during the warranty period. Plaintiffs’ statutory

claims depend on the allegation, stated in entirely conclusory terms, that Ducati failed to disclose a

known defect in the fuel tanks on the motorcycles purchased by plaintiffs. But the Amended

Complaint lacks any specific facts suggesting that Ducati knew or believed that the tanks were

defective at the time of plaintiffs’ purchases, and lacks even one alleged representation by Ducati

about the tanks. This absence of any allegation of misrepresentation by Ducati falls far short of

the heightened pleading requirements applicable to plaintiffs’ CLRA and UCL claims under Fed.

R. Civ. P. 9(b). Moreover, the statutory claims cannot rest on allegations of nondisclosure where

no contrary affirmative representation by Ducati has been alleged and plaintiffs have not alleged

that they—or even one member of the putative class—have experienced any safety issue relating

to their tanks. No accidents or bodily injury claims have ever been reported to Ducati related to a

fuel tank by either plaintiffs or any other person, and plaintiffs do not allege otherwise.1

1 Plaintiff Sugarman’s CLRA and UCL claims should be dismissed with prejudice for theadditional reason that he is a Florida resident, and has not alleged any relevant contact withCalifornia, barring assertion of California consumer protection law claims by him.


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In addition, plaintiffs’ class allegations should be stricken on the pleadings because the

proposed class simply cannot be certified. Plaintiffs’ assertion of their claims as a putative

nationwide, all-model, eight-year class action multiplies exponentially the inadequacies of the

conclusory allegations of the Amended Complaint. The proposed class is hopelessly overbroad,

proposing as members every owner or lessee of any model Ducati motorcycle anywhere in the

United States (alleged to number “approximately 50,000” (Am. Compl. ¶ 40)), irrespective of the

many necessary individual inquiries, including whether such persons experienced any problem

with their tanks, ever sought a warranty repair or replacement, or received a fully satisfactory

warranty repair or replacement and therefore did not suffer any injury at all. For these reasons, the

purported class fails to satisfy the requirement that class membership be objectively ascertainable

without individualized inquiry. In addition, no class could be certified because the statutory and

common law claims asserted present myriad individualized factual and legal questions that must

be litigated and resolved on a customer-by-customer basis under the laws of multiple jurisdictions.

SUMMARY OF ALLEGATIONS

Named Plaintiffs’ Allegations. Ducati is a California corporation with its headquarters in

Cupertino, California. Ducati markets and sells motorcycles, and provides, among other things,

“warranty service of Ducati motorcycles sold within the United States.” Am. Compl. ¶ 7.

Plaintiff Sugarman is a Florida resident, and alleges that in April 2009 he purchased a 2009

Ducati 1198S motorcycle from the Ducati Miami dealership in Miami Gardens, Florida. Id. ¶¶ 5,

29. Sugarman makes no specific allegations regarding what, if anything, he reviewed, considered,

or relied on when deciding to purchase his motorcycle. He alleges that approximately five months

after his purchase, he “noticed that his fuel tank was deforming,” and “[o]ver the next month or

two . . . that fuel was leaking from the fuel tank.” Id. ¶ 30. He alleges that he took his motorcycle

to the Ducati Miami Dealership, which replaced his tank under the Limited Warranty (defined

below) at no cost to him. Id. ¶ 31. Sugarman also alleges that “[w]ithin a few months” the

replacement tank “was also deforming” and that he “is concerned that the same problems he has

experienced” will recur. Id. ¶ 32. He does not allege that Ducati would not repair any problem, or

that his motorcycle has ever experienced any safety issue.


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Plaintiff Le is a California resident, and alleges that in August 2007 he purchased a 2007

Ducati SportClassic 1000 Special Edition motorcycle from the Southern California Triumph

Ducati dealership. Id. ¶¶ 6, 34. Le too makes no specific allegations regarding what, if anything

he reviewed, considered, or relied on when deciding to purchase his motorcycle. He alleges that

in April or May 2009 he noticed that his fuel tank was “wobbling while he was riding,” saw that

the tank was “bulging,” and took the motorcycle to the Southern California Triumph Ducati

dealership, “where his fuel tank was replaced under warranty with another fuel tank made of the

same plastic material.” Id. ¶¶ 35-36. According to Le, in September 2010—after his motorcycle

was outside the two-year warranty period (id. ¶ 34, 54)—he “noticed that the fuel tank was again

deforming and coming loose,” and he took the motorcycle back to the dealership, which repaired

the issue by “shimm[ing]” the fuel tank, i.e., “by adding washers to the fuel tank mounts.” Id. ¶

37. Le also does not allege that Ducati would not repair any problem, or that his motorcycle has

experienced any safety issue.

Ducati’s Limited Warranty. Each Ducati motorcycle comes with a written two-year

Limited Warranty (the “Limited Warranty”).2 Am. Compl. ¶ 54. The Limited Warranty provides:

[F]or a period of [two years] from the date of initial retail purchase from anauthorized Ducati motorcycle dealer that each new Ducati motorcycle shall befree, under normal use and maintenance, from any defect in material andworkmanship, subject to [enumerated] conditions, exclusions, obligations andlimitations.

2 Plaintiffs neither attach the Limited Warranty nor allege all of its relevant termsnotwithstanding its importance to their claims and the repeated references to it in theAmended Complaint. However, this Court “may consider evidence on which the‘complaint “necessarily relies” if: (1) the complaint refers to the document; (2) thedocument is central to the plaintiff’s claim; and (3) no party questions the authenticity ofthe copy attached to the 12(b)(6) motion.’” Daniels-Hall v. National Educ. Ass’n, No. 08-35531, 2010 WL 5141247, at *3 (9th Cir. Dec. 20, 2010) (citations omitted). The twowritten express warranties relied on in the Amended Complaint—the “Limited Warranty”and the “Emissions Warranty”—are attached to the Declaration of Stephen P. Blake(“Blake Decl.”) filed herewith, and Ducati has concurrently filed a request that the Courttake notice of these exhibits.

Ducati’s Limited Warranty was updated in or around 2007. Both plaintiffs should begoverned by the updated Limited Warranty contained in Exhibit A to the BlakeDeclaration, as plaintiff Sugarman purchased his motorcycle in 2009 and plaintiff Lepurchased his in 2007. However, Exhibit B to the Blake Declaration contains the earlierversion in case any claims are asserted under this prior Limited Warranty. Each version issubstantially identical as to all terms relevant to this motion.


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Blake Decl. Ex. A; see also id. Ex. B. Critically, the Limited Warranty expressly states that the

“exclusive” remedies for “[a]ny material or workmanship found to be defective by Ducati” within

the warranty term is that such defect shall, as appropriate, “be repaired or replaced without charge

for parts and/or labor” at an authorized Ducati dealer. Blake Decl. Ex. A; see also id. Ex. B

(“remedied without charge for parts and/or labor”). Ducati’s Limited Warranty thus is a “repair or

replace” warranty that does not promise a perfect motorcycle for all time, but rather states that

within the warranty period Ducati will, at no cost to the customer, provide any necessary and

covered repairs. Indeed, the Limited Warranty disclaims, in all-capital letters, liability “for any

other expense, loss or damage.” Blake Decl. Ex. A; see also id. Ex. B. The Limited Warranty

also excludes coverage for, inter alia, motorcycles in competitions, misused or altered in a manner

not recommended or approved in writing by Ducati, lack of reasonable and proper maintenance,

and any inconvenience, loss of use or transport of the motorcycle to the dealer. Blake Decl. Ex.

A.; see also id. Ex. B. It also conspicuously states that any implied warranties are limited to the

express terms of the Limited Warranty. Blake Decl. Ex. A; see also id. Ex. B.

ARGUMENT

I. PLAINTIFFS’ BURDEN AT THE PLEADING STAGE

Dismissal is appropriate under Fed. R. Civ. P. 12(b)(6) if plaintiffs fail to proffer “enough

facts to state a claim to relief that is plausible on its face,” Bell Atl. Corp. v. Twombly, 550 U.S.

544, 570 (2007), or lack a “cognizable legal theory.” Stearns v. Select Comfort Retail Corp.

(“Stearns II”), No. 08-2746, 2010 WL 2898284, at *7 (N.D. Cal. July 21, 2010) (Fogel, J.)

(citations omitted). While well-pleaded allegations of material fact are assumed to be true, courts

need not accept as true allegations that are conclusory, unwarranted deductions or unreasonable

inferences. See Daniels-Hall, 2010 WL 5141247, at *3. “Where a complaint pleads facts that are

‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and

plausibility of entitlement to relief.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting

Twombly, 550 U.S. at 557).

Moreover, the heightened requirements of factual particularity mandated by Fed. R. Civ. P.

9(b) apply to CLRA and UCL claims based on alleged non-disclosure of a known product defect


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by the defendant. Baba v. Hewlett-Packard Co. (“Baba II”), No. 09-5946, 2011 WL 317650, at

*2, *4 (N.D. Cal. Jan. 28, 2011) (Rule 9(b) applies where such claims are premised on allegations

“that [company] knew of but concealed the [alleged] defect and made false representations about

the [product] and warranty”). To satisfy Rule 9(b), a plaintiff must allege the “who, what, when,

where, and how of the misconduct alleged.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1126 (9th

Cir. 2009). General pleadings alleging only conclusory allegations of concealment and non-

disclosure “do not come close to satisfying the pleading requirements of Rule 9(b).” Stearns v.

Select Comfort Retail Corp. (“Stearns I”), No. 08-2746, 2009 WL 1635931, at *9 (N.D. Cal. June

5, 2009) (Fogel, J.).

Courts will dismiss claims with prejudice in cases alleging product defect where the

plaintiffs’ claim is foreclosed as a matter of law. See, e.g., Hovsepian v. Apple, Inc., No. 08-5788,

2009 WL 5069144, at *3, *4 (N.D. Cal. Dec. 17, 2009) (Fogel, J.) (dismissing CLRA and UCL

claims without leave to amend).

II. PLAINTIFFS’ CLAIMS FOR BREACH OF EXPRESS WARRANTY FAIL

Counts I and II, for breach of express warranty, should be dismissed for at least three

reasons: (a) no breach of warranty is alleged because, according to the Amended Complaint’s

allegations, Ducati is, in accordance with the terms of its Limited Warranty, providing the

promised repair or replacement remedy to any customer (including the named plaintiffs) whose

tank experiences an issue; (b) plaintiffs fail to plead any specific term of the alleged warranty that

has been breached; and (c) plaintiffs have not alleged reliance on the Limited Warranty in

purchasing their motorcycles. In addition, Count II—predicated on Ducati’s Emissions

Warranty—is inapplicable to the claim of defect alleged here.

First, plaintiffs’ express warranty claim must be dismissed because the Amended

Complaint’s allegations acknowledge that Ducati is honoring its obligation under its Limited

Warranty to provide a “repair or replacement” by repairing or replacing during the warranty period

any tank that experiences a problem at no cost to the customer. See Am. Compl. ¶¶ 2, 26, 57. “A

claim for breach of express warranty requires an actual breach,” Sanders v. Apple Inc., 672 F.

Supp. 2d 978, 988 (N.D. Cal. 2009) (Fogel, J.) and “is measured by[] the terms of that warranty.”


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Stearns II, 2010 WL 2898284, at *12. Here, the exclusive remedy for any customer who

experiences a defect in material or workmanship during the warranty period is to obtain warranty

repairs or replacement from an authorized Ducati dealer. See Blake Decl. Ex. A. An exclusive

remedy contained in a warranty, such as a “repair or replace” remedy, will be enforced unless it

fails of its essential purpose, which occurs only in the limited circumstance where “enforcement of

the limited remedy would essentially leave plaintiff with no remedy at all.” Stearns I, 2009 WL

1635931, at *5 (emphasis in original); see also Polzin v. Chrysler Group LLC, No. A09-405, 2010

WL 2035617, at *2 (Minn. Ct. App. May 25, 2010) (“[I]f a ‘seller repairs the goods each time a

defect arises, a repair-and-replacement clause does not fail of its essential purpose.’”) (citations

omitted). Here, Ducati’s Limited Warranty is a “repair or replace” warranty that does not promise

a perfect bike, but rather a repair or, at Ducati’s discretion, a replacement if necessary to address

the manifestation of any defect in materials or workmanship. See, e.g., Blake Decl. Ex. A; see

also Kent v. Hewlett-Packard Co., No. 09-5341, 2010 WL 2681767, at *8 (N.D. Cal. July 6, 2010)

(Fogel, J.) (seller “did not guarantee that the operation of the [product] would be ‘uninterrupted or

error-free.’ Instead, [seller] warranted that it would offer repairs, replacements, or refunds in the

event that defects did manifest during the warranty period”).

Plaintiffs have failed to allege that any conduct by Ducati breached any term of the

Limited Warranty. According to the Amended Complaint, Ducati replaced the fuel tanks and

repaired the motorcycles owned by each of the plaintiffs when they presented them to their Ducati

dealers, fully honoring its warranty in each case. Am. Compl. ¶¶ 2, 26, 57. Nor do plaintiffs

allege that Ducati refused to repair or replace the tank of any putative class member who may have

experienced a covered issue and requested a warranty repair or replacement from a Ducati dealer.

Instead, plaintiffs merely allege—contrary to the plain language of the Limited Warranty and

governing law—that a repair or replace warranty entitles them to a different type of fuel tank

altogether than Ducati provided. Id. ¶ 4.

A seller of a product “is not liable for breach of express warranty merely because a product

manifests recurring failures during (or after) the warranty period. Rather, the question is whether

Plaintiffs sought repairs, refunds, or replacements and, if so, whether [seller] responded


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appropriately under the warranty.” Kent, 2010 WL 2681767, at *6; Long v. Hewlett-Packard Co.

(“Long II”), No. 06-2816, 2007 WL 2994812, at *4 (N.D. Cal. Dec. 21, 2006) (“a plaintiff cannot

maintain a breach of warranty claim under California law for a product that is repaired within the

warranty period and fails again months after the warranty has expired”). Plaintiffs’ allegations

track those of the plaintiffs in Long II, who also alleged that the fix provided by seller under a

repair or replace warranty for an issue occurring in-warranty “was inadequate because [seller]

merely substituted one defective [component] for another.” Long II, 2007 WL 2994812, at *4.

The court determined that under an express warranty promising (as here) that components “will be

free from defects in materials and workmanship” for a fixed period, the seller “fulfilled its

warranty promises” by providing plaintiff with a product that was “fully operable” during the

warranty period. Id. at *5. That is, although a warranted component failed during the warranty

period, seller “tendered an adequate repair” as a matter of law because the product “was again

fully operable when [seller] returned it to [plaintiff].” Id. “The allegation that the new

[replacement part] malfunctioned again several months outside the warranty period is immaterial

to [plaintiff’s] breach of express warranty claim.” Id. at *5.

Similarly, in Brothers v. Hewlett-Packard Co., No. 06-2254, 2007 WL 485979, at *4 (N.D.

Cal. Feb. 12, 2007), the court rejected plaintiff’s assertion that an in-warranty repair of the product

was “inadequate” because seller allegedly “replac[ed] a defective part with another defective

part,” and the same defect reoccurred outside the warranty period. The court dismissed a claim of

breach of express warranty to repair or replace during the warranty period where, as here, it was

undisputed the allegedly defective component was replaced during the warranty period. Id.

(“replacement or repair of malfunctioning components during the life of the warranty is exactly

what the Limited Warranty provides”).3 As detailed above, Ducati did not warrant any particular

3 See also Kowalsky v. Hewlett-Packard Co., No. 10-2176, 2010 WL 5141869, at *13 (N.D.Cal. Dec. 13, 2010) (“Nor can Plaintiff state a claim under the theory that Defendantbreached its express warranties by continuing to offer replacement [products] that it knewto be defective” where the complaint “does not plausibly allege that [defendant] had priorknowledge of a widespread design defect.”); Anunziato v. eMachines, Inc., 402 F. Supp. 2d1133, 1141 (C.D. Cal. 2005) (dismissing breach of warranty claim where plaintiff allegedan in-warranty repair “simply masked the problem until after the express warranty hadallegedly expired” and that the alleged defect was “continuing in nature”); Carey v. SelectComfort Corp., No. 27 CV 04-015451, 2006 WL 871619, at *5 (Minn. Dist. Ct. Jan. 30,


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design or guarantee that no part on its motorcycles would ever contain a defect; Ducati warranted

only that any issues would be remedied during the warranty period. Plaintiffs’ warranty claim is

therefore precluded as a matter of law, and should be dismissed with prejudice.

Second, “[t]o plead an action for breach of express warranty under California law, a

plaintiff must allege . . . the exact terms of the warranty.” Sanders, 672 F. Supp. 2d at 986–87.

Plaintiffs have alleged only a summary description of the warranty here, that Ducati “extends an

express warranty under which ‘it guarantees all its bikes for a period of 24 months from

registration, with unlimited mileage.’” Am Compl. ¶ 54. This kind of summary of the warranty

does not satisfy the requirement that the exact terms allegedly breached be pleaded. Tietsworth v.

Sears, Roebuck and Co. (“Tietsworth I”), No. 09-288, 2009 WL 1363548, at *2 (N.D. Cal. May

14, 2009) (Fogel, J.) (allegation that “parts and workmanship were warranted to be ‘free from

defects for’” fixed period “failed to allege the exact terms of the warranty” and therefore failed to

state a claim).

Third, plaintiffs nowhere allege—as they must—that in purchasing their motorcycles they

reasonably relied on a particular statement in Ducati’s Limited Warranty or even on the existence

of a warranty. Id. (dismissing express warranty claim for failure to plead “facts establishing

[plaintiff’s] reasonable reliance on the warranty”); Sanders, 672 F. Supp. 2d at 988 (dismissing

express warranty claim because plaintiff “fail[ed] to allege reasonable reliance on any specific

representations” seller made concerning the product). Plaintiffs strain to approximate reliance by

alleging that Ducati’s “2-year standard express warranty is heavily touted by Ducati,” and that

plaintiffs generally “were aware of” such warranty, and after the purchase plaintiffs registered

their motorcycle with Ducati to take advantage of the warranty. Am. Compl. ¶ 55. Plaintiffs do

not even offer this “aware of” allegation as to the Emission Warranty, providing an additional

basis for dismissal of Count II. Their vague “aware of” allegation concerning the Limited

2006) (holding that “[a]s long as the seller repairs the goods each time a defect arises, arepair and replacement clause does not fail of its essential purpose” and dismissingpurported nationwide class action based on premise that defect would recur becauseplaintiff acknowledged that seller “has offered to send out replacement pieces” and therewere no allegations “that the express warranty will not be honored”).


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Warranty does not meet the applicable pleading standard, because neither plaintiff alleges that he

actually read the warranty (or received any pre-purchase representation from Ducati), much less

that he was aware of any specific representation during the Limited Warranty period.

Nor do the allegations of the Amended Complaint remotely support plaintiffs’ attempt to

allege a breach of Ducati’s Emission Warranty (Count II) contained in the Owner’s Manual for

their motorcycles. The Emission Warranty provides, in pertinent part, that each Ducati

motorcycle:

A) is designed, built and equipped so as to conform at the time of initial retailpurchase with all applicable regulations of the United States EnvironmentalProtection Agency and California Air Resources Board; and

B) is free from defects in material and workmanship which cause such motorcycleto fail to conform with applicable regulations of the United States EnvironmentalProtection Agency or the California Air Resources Board for a period of use of30,000 kilometers (18,641 miles), or 5 (five) years from the date of initial retaildelivery.” . . . .

Blake Decl. Exs. C & D (emphasis added). Like the Limited Warranty, the remedies

under the Emissions Warranty are also limited to repair and replacement:

The liability of Ducati under this Emission Control Systems Warranty is limitedsolely to the remedying of defects in material or workmanship by an authorizedDucati motorcycle dealer at its place of business during customary business hours.This warranty does not cover inconvenience or loss of use . . . . Ducati shall notbe liable for any other expenses, loss or damage, whether direct, incidental,consequential or exemplary arising in connection with the sale or use of orinability to use the Ducati motorcycle for any purpose . . . .

Id.

But the Amended Complaint nowhere alleges any emissions problems on the plaintiffs’

motorcycles. Plaintiffs attempt to recast their fuel tank defect allegations as a breach of the

Emission Warranty by asserting, in wholly conclusory terms, that the alleged “incompatibility” of

the fuel tanks with the fuel utilized causes the entire “fuel system” on every Ducati motorcycle to

violate “EPA regulations by resulting in an unsafe condition . . . .” Am. Compl. ¶ 65. But the sole

EPA regulation they cite (id. ¶ 64) does not support plaintiffs’ construct. It states that “[a]ny

system installed on or incorporated in a new motorcycle to enable such vehicle to conform to

standards imposed by this subpart . . . [s]hall not in its operation, function, or malfunction result in


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any unsafe condition . . . .” 40 C.F.R. § 86.408-78, subpart E (emphasis added). The “standards

imposed by this subpart” are emissions standards. Id. The governing statute provides that “[t]he

cost of any part, device or component . . . that is designed for emission control . . . the failure of

which shall not interfere with the normal performance of the vehicle . . . shall be borne or

reimbursed at the time of replacement by the vehicle manufacturer.” 42 U.S.C. § 7541(a)(3)

(emphasis added). A part that is “designed for emission control” is defined precisely as “a

catalytic converter, thermal reactor, or other component installed on or in a vehicle for the sole or

primary purpose of reducing vehicle emissions (not including those vehicle components that were

in general use prior to model year 1968 and the primary function of which is not related to

emission control).” Id. (emphasis added). Plaintiffs do not allege (nor could they) that a fuel

tank—the primary purpose of which is to hold fuel and which was in general use prior to 1968—is

a part installed “for the sole or primary purpose of reducing vehicle emissions.”

Moreover, the Amended Complaint does not allege that Ducati has failed to repair or

replace any fuel tank with a problem brought into a Ducati dealer. To the contrary, Plaintiffs

allege that Ducati has replaced or repaired any tanks presenting a problem, thus fully honoring any

warranty claim even assuming arguendo that the Emissions Warranty applies. See Am. Compl. ¶¶

2, 26, 57.

III. COUNT III SHOULD BE DISMISSED BECAUSE PLAINTIFFS HAVE NOTALLEGED A VIOLATION OF THE IMPLIED COVENANT OF GOOD FAITHAND FAIR DEALING IN ANY EXPRESS WARRANTY

The implied covenant of good faith and fair dealing “is limited to assuring compliance

with the express terms of the contract, and cannot be extended to create obligations not

contemplated by the contract.’” Usher v. Greenpoint Mortg. Funding, Inc., No. 10-0952, 2010

WL 4983468, at *9 (E.D. Cal. Dec. 2, 2010) (citations omitted); see also Careau & Co. v. Security

Pac. Bus. Credit, Inc., 222 Cal. App. 3d 1371, 1395 (1990) (“[i]f the allegations do not go beyond

the statement of a mere contract breach and, relying on the same alleged acts, simply seek the

same damages or other relief already claimed in a companion contract cause of action, they may

be disregarded as superfluous as no additional claim is actually stated”).


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Here, plaintiffs’ claim for breach of the implied covenant (Count III) simply restates under

a different label the same inadequate allegations advanced in Counts I and II as purported breaches

of express warranty. Moreover, the express warranties invoked by plaintiffs provide explicitly

that the statements of warranty therein “are exclusive and in lieu of all other remedies,”

foreclosing reliance on implied terms. Blake Decl. Exs. A, B, C & D. The Limited Warranty

states that “any implied warranties are limited to the express terms of the Limited Warranty.” Id.

Ex. A. Because plaintiffs’ claim for breach of the implied covenant is, at best, “superfluous,”

Count III should be dismissed with prejudice.

IV. PLAINTIFFS FAIL TO STATE A CLAIM UNDER THE CLRA AND UCL

A. No Allegation Of Pre-Sale Knowledge

Plaintiffs’ CLRA and UCL claims fail at the threshold because plaintiffs have failed to

make any allegation—much less allegations with the particularity required by Rule 9(b)—that

Ducati knew that an alleged misstatement or omission was false and intended to deceive plaintiffs

at the time of sale. See Kent, 2010 WL 2681767 at *7 (“CLRA proscribes active

misrepresentations about the standard, quality, or grade of goods”) (emphasis added); Klein v.

Earth Elements, Inc., 59 Cal. App. 4th 965, 969–70 (1997) (no UCL violation for “unintentional

distribution of [defective or] unmerchantable” product). The Ninth Circuit has held that CLRA

and UCL claims of nondisclosure that are “couched in general pleadings alleging [defendant’s]

intent to conceal from customers . . . do not satisfy the heightened pleading requirements of Rule

9(b).” Kearns, 567 F.3d at 1127. Here, plaintiffs attempt to brush aside the particularity

requirements for allegations of pre-sale knowledge of a purported defect by doing exactly what the

U.S. Supreme Court, the Ninth Circuit, and this Court have recently reaffirmed is prohibited—

using conclusory terms like “long known or should have known” (Am. Compl. ¶ 20), “exclusive

access to information” (id. ¶ 21), “actively concealed” (id. ¶ 80), and “exclusive knowledge”

(id.)—without alleging facts that “plausibly establish” such conclusions. Iqbal, 129 S. Ct. at 1951;

see also Kearns, 567 F.3d at 1124; Oestreicher v. Alienware Corp., 544 F. Supp. 2d 964, 974

(N.D. Cal. 2008).


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To avoid dismissal, plaintiffs must allege much more than conclusory statements. They

must provide specific facts showing that Ducati knew or believed that the tanks were defective

before plaintiffs purchased their motorcycles, and that Ducati concealed that information “in [the]

transaction[s]” that resulted in plaintiffs’ purchases. Daugherty v. Am. Honda Motor Co., 144 Cal.

App. 4th 824, 837 n.6 (2006); see also Baba v. Hewlett-Packard Co. (“Baba I”), No. 09-5946,

2010 WL 2486353, at *7 (N.D. Cal. June 16, 2010) (dismissing CLRA and UCL claims where

complaint lacked specific “averments that [defendant] knew of the alleged defects at the time

[plaintiffs] purchased their [products] or contacted customer support”). The Amended Complaint

lacks even a single specific “who/what/where/when/why/how” detail concerning Ducati’s alleged

knowledge of the alleged defect. Plaintiffs attempt to bootstrap the required pre-sale knowledge

of a purported tank issue by asserting, in wholly conclusory terms, that Ducati has “concealed the

incompatibility” of plastic tanks with motorcycle fuel by implementing “repair practices” under

the Limited Warranty under which it installs “a replacement tank made of the same incompatible

material.” Am. Compl. ¶¶ 24, 26. As a matter of law, even if these allegations were sufficiently

specific, they do not address Ducati’s pre-sale knowledge.

In Oestreicher, the court dismissed with prejudice CLRA and UCL claims based on stock

allegations—all repeated here—that defendant had “exclusive knowledge;” “actively concealed

the defect by failing to disclose;” and “intended to defraud in order to increase its own profits.”

544 F. Supp. 2d at 974; see also Am. Compl. ¶¶ 20, 21, 80. This Court observed that “allegations

of this nature . . . could be made about any alleged design defect in any manufactured product.

The heightened pleading requirements of Rule 9(b) were designed to avoid exactly this situation.”

Id. As in Oestreicher, plaintiffs have failed to specify any factual basis to support their

conclusions that Ducati had “exclusive knowledge” of the alleged tank issue or that it “actively

concealed” such information to induce plaintiffs to purchase their motorcycles. See Am. Compl. ¶

80. Numerous courts, including this Court, agree that such boilerplate allegations warrant

dismissal. See, e.g., Berenblat v. Apple, Inc., No. 08-4969, 2010 WL 1460297, at *5–10 (N.D.

Cal. Apr. 9, 2010) (Fogel, J.) (dismissing claim under all three UCL prongs where, as here, the

“key alleged omissions and misrepresentations include[d] failing to inform consumers of the


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defect and continuing to sell a product that [defendant] knew to contain a defect that would cause

the product to malfunction”); Tietsworth v. Sears, Roebuck and Co. (“Tietsworth II”), No. 09-

0288, 2009 WL 3320486, at *4, *7, *9 (N.D. Cal. Oct. 13, 2009) (Fogel, J.) (rejecting CLRA and

UCL concealment allegations based on “conclusory” and “general allegations of ‘exclusive

knowledge as the manufacturer’ and active concealment of a defect,” because if sufficient it

“would mean that any unsatisfied customer could make a similar claim every time a product

malfunctioned”).

Allegations of knowledge based on comments allegedly posted by Ducati customers on a

National Highway Traffic Safety Administration (“NHTSA”) website are equally inadequate.

Am. Compl. ¶ 19. Courts have consistently rejected such allegations, stating that “[r]andom

anecdotal examples of disgruntled customers posting their views on websites at an unknown time

is not enough to impute knowledge upon defendants.” Oestreicher, 544 F. Supp. 2d at 974 n.9.4

Here, Plaintiff has not identified any comment that was posted prior to the date either plaintiff

purchased his motorcycle, or any basis to support its credibility. Moreover, plaintiffs’ use of these

postings (which they allege have been entered since 2006—before either plaintiff purchased his

motorcycle (Am. Compl. ¶ 22)) is incompatible with their contention that Ducati had “exclusive

knowledge” at the time of their purchases. Random comments on third-party websites are

insufficient as a matter of law to support a claim that Ducati knowingly sold plaintiffs a

motorcycle with a defective tank, because they say nothing at all about Ducati’s knowledge of the

alleged defect. See Berenblat, 2010 WL 1460297, at *9 (dismissing UCL claim, because even

defendant’s removal of “a thread of 350+ complaints about the [alleged] defect on [defendant’s

consumer] website . . . merely establish[es] the fact that some consumers were complaining” and

4 See also Baba II, 2011 WL 317650, at *3 (scores of “anecdotal complaints without datesor any other information are insufficient to allege that [defendant] possessed knowledge ofthe putative defect”); Kent, 2010 WL 2681767, at *8 (“a series of online postings thatcomplain of [product] failures” must be disregarded where plaintiffs “do not allege that[defendant] knew of these complaints at the time” of sale); Long v. Hewlett Packard andCo. (“Long I”), No. 06-2816, 2006 WL 4877691, at *1, *3 (N.D. Cal. July 27, 2007)(allegations that company learned of the defect through thousands of calls and byconducting thousands of repairs related to the alleged defect were insufficient to supportclaim that company “knew about the relevant defects (and made misrepresentations) whenPlaintiffs in particular purchased their [product]”) (emphasis added).


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“are insufficient to show that [defendant] had knowledge that the [product] in fact was defective

and sought to conceal that knowledge from consumers”).5

B. Claims That Ducati’s Actions Under Its Repair Or Replace Warranty WereInsufficient Cannot Support A CLRA Or UCL Claim

Plaintiffs’ CLRA and UCL claims principally rely on the allegation that Ducati failed to

meet its warranty obligations by “installing a replacement fuel tank that uses the same defective

plastic material.” Am. Compl. ¶ 87. As a threshold matter, plaintiffs cannot pursue these statutory

claims based on post-sale performance under a warranty. See Baba I, 2010 WL 2486353, at *7

(dismissing CLRA and UCL claims, ruling that “alleged post-transaction behavior . . . is irrelevant

to the question of whether [defendant] made false statements to plaintiffs before or during their

respective transactions which induced them to purchase” the product).

Courts have consistently rejected attempts, as here, to transform a contractual dispute about

performance under the terms of a Limited Warranty into a CLRA or UCL claim. See, e.g., Baba I,

2010 WL 2486353, at *4 (“[T]he failure to fulfill promises under a limited warranty is simply a

contractual breach that does not become actionable under CLRA without proof of more, such as

the fact that the defendant sold a product it was aware was defective.”); Kent, 2010 WL 2681767,

at *8 (same); Hoey v. Sony Elecs. Inc., 515 F. Supp. 2d 1099, 1104 (N.D. Cal. 2007) (CLRA claim

based on warranty was an impermissible attempt “to bootstrap [the manufacturer’s] express

warranty into a representation that the [products] are defect-free”). Moreover, any plaintiff who

has received the “benefit of the bargain” under its warranty has not “lost money or property” and

5 Similarly, plaintiffs’ assertion that “chemical principles well known in the industry” (Am.Compl. ¶ 3) and “[s]tandard pre-release field testing would have revealed the problem” (id.¶ 20) (emphasis added) prior to sale are nothing more than ipse dixit conclusions thatcannot withstand a motion to dismiss. Twombly, 550 U.S. at 557. Plaintiffs do not allegeany facts regarding Ducati’s manufacturing or testing processes at the time of plaintiffs’purchases, what the results of those processes were, or how that information supposedlygave Ducati actual knowledge that every fuel tank on every model was defective. Kent,2010 WL 2681767, at *8 (rejecting such testing allegations because “they do not allegeany specific facts to support their claim: they do not explain how the [products] in suitwere inadequately manufactured or what testing was done or should have been doneinstead”).


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therefore lacks standing. Baggett v. Hewlett-Packard Co., No. 07-0667, 2009 WL 3178066, at

*9–10 (C.D. Cal. Sept. 29, 2009).

The Amended Complaint alleges nothing more than that plaintiffs disagree with the way

Ducati performed its “repair or replace” obligations under the Limited Warranty. Am. Compl.

¶¶ 2, 27. Plaintiffs do not identify any non-warranty representation that Ducati made to them

regarding their motorcycles. Nor do they allege that Ducati has engaged in any conduct aside

from its alleged failure to provide a different kind of replacement tank than it provided. This is

nothing more than an alleged breach of a contractual warranty (which allegation is itself deficient

for the independent reasons discussed at § II, supra), wholly lacking particularized allegation of

some additional “deceptive act[] or practice,” Cal. Civ. Code § 1770(a), and cannot support a

CLRA or UCL claim. See, e.g., KEMA, Inc. v.Koperwhats, 658 F. Supp. 2d 1022, 1033 (N.D.

Cal. 2009).

C. No Duty To Disclose Is Alleged

Plaintiffs’ allegation that Ducati concealed facts from plaintiffs about the existence of an

alleged issue with plastic fuel tanks installed on its motorcycles fails for the additional reason that

the Amended Complaint alleges no facts that would support a duty to disclose under the CLRA or

UCL.

A duty to disclose arises only in two situations: (1) where the alleged concealed fact is

“contrary to a representation actually made by the defendant” and, (2) where the “defendant was

obliged to disclose” the defect because it presented a safety issue. Oestreicher, 544 F. Supp. 2d at

969; Morgan v. Harmonix Music Sys., Inc., No. 08-5211, 2009 WL 2031765, at *4 (N.D. Cal. July

7, 2009) (“According to all relevant case law, defendants are only under a duty to disclose a

known defect in a consumer product when there are safety concerns associated with the product’s

use.”). The Amended Complaint does not identify a single affirmative representation by Ducati

about the fuel tank’s quality or characteristics, much less a material representation made with

knowledge of its falsity. See Tietsworth v. Sears, Roebuck and Co. (“Tietsworth III”), 720 F.

Supp. 2d 1123, 1137 (N.D. Cal. 2010) (Fogel, J.) (misrepresentation must “directly” relate to

allegedly defective component or part); Oestreicher, 544 F. Supp. 2d at 973 (dismissing CLRA


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and UCL claims where, as here, “Plaintiff has provided no specific statement or absolute

characteristic regarding” the relevant product component).

Plaintiffs cannot avoid dismissal by sprinkling the Amended Complaint with conclusory

allegations that the purported fuel tank issue described in their pleading poses a safety risk to

consumers. See, e.g., Am. Compl. ¶¶ 2, 4, 28, 58. First, neither plaintiff alleges that his

motorcycle has actually experienced any injury or safety problem resulting from his fuel tank, and

consequently neither plaintiff has standing to assert such any claims based on the nondisclosure of

the alleged safety defect. See Tietsworth II, 2009 WL 3320486, at *5.

Second, despite proposing a putative class that includes every owner and lessee of any

model Ducati motorcycle for eight years, plaintiffs’ conclusory assertion of safety “risks,”

“hazards,” and “implications” (Am. Compl. ¶¶ 4, 15, 24), is not supported by an allegation, even

on information and belief, of even one instance of personal injury or safety-related incident

resulting from the fuel tank issue described in the Amended Complaint. As this Court has

recognized, a plaintiff must plead specific facts to make a credible safety claim as a basis for

imposing a disclosure obligation under the CLRA and UCLA. In Tietsworth II, this Court

analyzed the standard for pleading UCL and CLRA claims based on alleged fraudulent omissions

relating to a purported “safety defect,” and refused to credit a bald allegation—repeated here—of

“unsafe conditions” (Am Compl. ¶¶ 2, 28), or the argument—also repeated here—that alleging the

potential for “safety hazards” is sufficient to trigger a duty of disclosure. 2009 WL 3320486, at *5

(rejecting “duty to disclose” in absence of specific factual allegations that any named plaintiff or

putative class member actually experienced the alleged “safety defect” purportedly posing “a

serious personal safety risk” and “threatening very severe bodily injury”); see also Tietsworth III,

720 F. Supp. 2d at 1134 (same; rejecting safety-based disclosure obligation on motion to dismiss

and finding “[p]laintiffs lack standing to pursue a claim based on the nondisclosure of the alleged

safety defect”).


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As in Tietsworth, plaintiffs simply employ the “safety risk” label (e.g., Am. Compl. ¶ 4),

but allege no supporting events or facts, much less that they or any putative class member were

personally injured or suffered damage to other property. This is insufficient.6

D. No Reliance On Any Ducati Representation Or Omission Is Alleged

The Amended Complaint fails to state claims under the CLRA and UCL for the additional

reason that it contains no allegation that plaintiffs (or any other consumer) relied on any

misrepresentation or omission by Ducati. See Baba I, 2010 WL 2486353, at *5 (dismissing

CLRA and UCL claims where the complaint failed to allege reliance on any representations to

plaintiffs “before or during their respective transactions” and improperly focused on defendant’s

post-transaction manner of addressing the alleged defect). As demonstrated supra, the allegation

that plaintiffs “were aware of” the warranty falls far short of showing, with particularity, that

plaintiffs relied on any specific promise, as is required to state a CLRA or UCL claim and to meet

the heightened particularity requirements of Rule 9(b). See Kent, 2010 WL 2681767, at *9, *12.

V. FLORIDA RESIDENT SUGARMAN’S CLRA AND UCL CLAIMS SHOULD BEDISMISSED

California law has a presumption against the extraterritorial application of the State’s

statutes. See J. P. Morgan & Co., Inc. v. Superior Court, 113 Cal. App. 4th 195, 221 (2003) (“a

court should not ordinarily construe a statute as regulating occurrences outside the state unless a

contrary intention is clearly shown”). The CLRA and UCL were neither designed nor intended to

authorize claims of non-California residents arising from conduct occurring outside of California.

6 Plaintiffs’ failure to allege facts creating duty to disclose is fatal to their claim under allthree prongs of the UCL. Because the CLRA claim is meritless, it cannot be a basis for aUCL claim under the “unlawful prong.” Kent, 2010 WL 2681767, at *10. Additionally, amere alleged breach of a warranty is not “unlawful” under the UCL. Boland, Inc. v. RolfC. Hagen (USA) Corp., 685 F. Supp. 2d 1094, 1111 (E.D. Cal. 2010) (“California courtshave held that a breach of contract is not itself ‘unlawful’ conduct for purposes ofCalifornia’s UCL.”). Nor can a claim under the UCL’s “fraudulent” prong survive where,as shown above, Ducati made no affirmative representations regarding the tanks, and noactionable omission or duty to disclose is alleged. Berenblat, 2010 WL 1460297, at *8–9;Morgan, 2009 WL 2031765, at *5. Plaintiffs’ allegations also do not constitute a violationof the “unfair” prong because the non-disclosure of a fact that a defendant was not boundto disclose does not result in a “substantial injury.” See Daugherty, 144 Cal. App. 4th at839; Morgan, 2009 WL 2031765, at *5.


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See, e.g., Ice Cream Distributors of Evansville, LLC v. Dreyer’s Grand Ice Cream, Inc., No. 09-

5815, 2010 WL 3619884, at *8 (N.D. Cal. Sept. 10, 2010) (“UCL ‘does not apply to actions

occurring outside of California that injure non-residents’”) (collecting cases); Am. Online, Inc. v.

Super. Ct., 90 Cal. App. 4th 1, 14–15 (2001) (CLRA is a “legislative embodiment of a desire to

protect California consumers”).

Plaintiff Sugarman is a Florida resident (Am. Compl. ¶ 5) who purchased his motorcycle in

Florida (id. ¶ 29); and at his request obtained a replacement tank at a Miami Ducati dealership (id.

¶ 31). No specific conduct giving rise to the claims alleged here is alleged to have occurred in

California, and any purported economic injury arising from Sugarman’s receiving a replacement

tank that he contends was inadequate occurred where he requested and obtained the warranty

replacement: Florida. There is no allegation that (i) Sugarman’s motorcycle was manufactured in

California; (ii) that the parties had any expectation that California law would apply to any future

dispute when Sugarman purchased and serviced his motorcycle in Florida; or (iii) that any specific

conduct regarding his fuel tank took place in California.

Courts have consistently rejected attempts by non-residents to create a California “hook”

based on the California location of corporate headquarters combined with conclusory allegations

as are made here that the decision to undertake the challenged conduct “emanated” from

California. As one court recently noted:

Apparently, Plaintiff believes that because [defendant’s] principal place ofbusiness is in California . . . the Court can presume that any false and misleadingstatements emanated from California. But the bulk of authority counsels againstmaking such an assumption. Although the fact that [defendant] does business inCalifornia gives California personal jurisdiction over [defendant], the SupremeCourt has specifically admonished that the existence of personal jurisdiction overa defendant does not alone permit application of the forum law to the claims ofnonresident plaintiffs.

Tidenberg v. Bidz.com, Inc., No. 08-5553, 2009 WL 605249, at *4 (C.D. Cal. Mar. 4, 2009).

If Sugarman’s allegations were sufficient to apply California law to his claims, then

California law could be applied whenever a company is incorporated or headquartered in


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California. This is not the law.7 Accordingly, Sugarman’s CLRA and UCL claims (Counts IV

and V) should be dismissed with prejudice.

VI. PLAINTIFFS’ PURPORTED CLASS ALLEGATIONS SHOULD BE STRICKEN

“Under Rules 23(c)(1)(A) and 23(d)(1)(D), as well as pursuant to Rule 12(f), this Court

has authority to strike class allegations prior to discovery if the complaint demonstrates that a class

action cannot be maintained.” Tietsworth III, 720 F. Supp. 2d at 1146. The U.S. Supreme Court

has endorsed a critical examination of class allegations at the pleading stage, stating that

“[s]ometimes the issues are plain enough from the pleadings to determine whether the interests of

absent parties are fairly encompassed within the named plaintiffs’ claim.” Gen. Tel. Co. of Sw. v.

Falcon, 457 U.S. 147, 160 (1982). Courts in this district have adhered to this guidance, and will

strike class pleadings when it is clear the proposed class cannot be certified. See Tietsworth III,

720 F. Supp. 2d at 1146–48; Hovsepian, 2009 WL 5069144, at *6.

A. The Proposed Class Is Not Ascertainable by Reference to Objective Criteria

A threshold prerequisite to any proposed class is that membership in the proposed class be

presently “ascertainable” by reference to objective criteria so that a court can determine without

individualized inquiries whether a particular individual is a member of the class and thus has

standing. See, e.g., Hovsepian, 2009 WL 5069144, at *2. “[N]o class may be certified that

contains members lacking Article III standing . . . . The class must therefore be defined in such a

way that anyone within it would have standing.” Sanders, 672 F. Supp. 2d at 991 (citation

omitted). Courts have repeatedly stricken class allegations where the proposed class definition

was too broad and contained class members who did not have standing. See, e.g., Stearns II, 2010

WL 2898284, at *20 (striking class allegations because “the class does not exclude persons who

already have received refunds or replacement parts or who have not suffered any damages at all”

7 See Ice Cream Distributors of Evansville, 2010 WL 3619884, at *8 (dismissing non-resident’s UCL claim because “bare allegation” does not “suggest that the fraudulentstatements were prepared in and emanated from California”); Johnson v. Hewlett-PackardCo., No. 09-3596, 2010 WL 2680772, at *4 (N.D. Cal. July 6, 2010) (same); Morgan,2009 WL 2031765, at *2 (dismissing non-resident’s CLRA claim against defendantheadquartered in California where, as here, “complaint fails to allege what conduct of thedefendants, if any, that violated the CLRA took place in California or how [non-resident]was injured in California”).


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and is thus “not ascertainable.”); Hovsepian, 2009 WL 5069144, at *6 (striking class allegations

where “the class is not ascertainable because it includes members who have not experienced any

problems with [relevant product]. Such members have no injury and no standing to sue.”);

Tietsworth III, 720 F. Supp. 2d at 1146; Sanders, 672 F. Supp. 2d at 991.

The class proposed here, on its face, fails these standards. The Amended Complaint

describes the putative class indiscriminately as “[a]ll persons who purchased a Ducati motorcycle

with a plastic fuel tank within the United States.” Am. Compl. ¶¶ 1, 38. That eight-year, all-

model, all-fuel tank class definition is completely unbounded, sweeping in all Ducati customers

regardless of whether they have actually experienced (1) any fuel tank problem; (2) a problem

within the applicable warranty period, but received a repair or replacement under the Limited

Warranty; or (3) problems after the expiration of a warranty period, and so have no claim for

breach of that warranty. Equally fundamentally, plaintiffs have not alleged any facts from which

the Court could reasonably infer that the alleged defect has manifested in a significant percentage

of putative class members’ tanks. See, e.g., id. ¶¶ 18, 27 (alleging only how the alleged defect may

manifest).8

B. Plaintiffs’ Putative Class Allegations Raise Predominantly IndividualizedIssues

As this Court observed in striking class action allegations on the pleadings in a consumer

action, “[c]ourts routinely hold that both fraud and warranty claims are difficult to maintain on a

nationwide basis and rarely are certified.” Sanders, 672 F. Supp. 2d at 991; see also Tietsworth

III, 720 F. Supp. 2d at 1146 (concluding on motion to strike that “express warranty claims are

improper for class treatment” because such “claims involve elements that are individual to each

purported class member”). This Court has stricken class allegations on the pleadings where, as

here, the claims necessitate individualized factual and legal inquiries. See, e.g., Tietsworth III, 720

F. Supp. 2d at 1147–48, at *20; Stearns I, 2009 WL 1635931, at *19.

8 These shortcomings also necessitate striking the class allegations because plaintiffs’ claimsare not typical of the claims of the members of the putative class. See, e.g., In re PaxilLitig., 212 F.R.D. 539, 549 (C.D. Cal. Jan. 13, 2003).


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On its face, the Amended Complaint establishes that class certification cannot be obtained

here because the statutory and common law claims asserted present highly individualized factual

and legal questions that must be litigated and resolved on a customer-by-customer basis under the

laws of multiple jurisdictions, precluding a finding of class cohesiveness or predominance of

common questions. Plaintiffs have proposed a nationwide class of every person in the United

States who during an eight-year period purchased or leased any of Ducati’s 24 different models of

motorcycles equipped with 16 different custom molded thermoplastic fuel tanks, with different

conditions of use and with different warranty claims experiences. At a minimum, the claims of

each putative class member will require individual adjudication of:

(1) whether each customer’s fuel tank actually experienced the problem alleged in theAmended Complaint;

(2) if so, the nature of the customer’s fuel and any additive use, and whether thecustomer’s improper use or care of the motorcycle, inappropriate fuel use,motorcycle modifications, extreme environmental conditions or causes other thanfuel tank expansion due to normal fuel caused the problem;

(3) whether any such problem occurred within the warranty period, and if so, whetherany warranty exclusions are applicable (such as any motorcycle used incompetitions);

(4) whether each customer sought warranty service from an authorized Ducati dealer,and if so, whether the warranty repair or replacement provided by Ducati for eachsuch consumer was satisfactory, and whether that customer has presented anyfurther problems not corrected by Ducati; and

(5) whether the claims of each customer in this eight year class period are timelyunder applicable statute of limitations periods.

These required individual adjudications foreclose class certification. See, e.g., Tietsworth III, 720

F. Supp. 2d at 1147–48, at *20; Stearns I, 2009 WL 1635931, at *19; Hovsepian, 2009 WL

5069144, at *6.

Moreover, the unmanageable variety of individual issues presented is significantly

compounded by plaintiffs’ proposed nationwide class. Against decisive authority, plaintiffs assert

(Am. Compl. ¶¶ 46-50) that all claims of the putative nationwide class may be pursued under

California law simply because Ducati is headquartered there and plaintiffs have alleged—in

wholly conclusory terms that flout Rule 9(b)—that “the core decision not to disclose the fuel tank

incompatibility” was made there. This is incorrect. Before a nationwide class can invoke the law


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of a particular state, that state’s law must both (1) not conflict with the law of another jurisdiction

that has an interest in the case, and (2) “have a ‘significant contact or significant aggregation of

contacts’ to the claims asserted by each member of the plaintiff class . . . in order to ensure that the

choice of [the forum state’s] law is not arbitrary or unfair.” Phillips Petroleum Co. v. Shutts, 472

U.S. 797, 821–22 (1985). Plaintiffs’ complaint fails on both scores.

First, “there are material conflicts between” (i) “California’s warranty laws and the

warranty laws of the other states,” and (ii) “California’s consumer protection laws and the

consumer protection laws of the other forty-nine states.” In re Hitachi Telev. Optical Block Cases,

No. 08-1746, 2011 WL 9403, at *6 (S.D. Cal. Jan. 3, 2011); see also Stearns I, 2009 WL

1635931, at *19 (striking class allegations in UCL and CLRA action because of, inter alia,

“discrepancies in applicable state laws” and “the elements of proof with respect to the property

damage alleged . . . likely will vary significantly among class members”). Second, plaintiffs have

not alleged a “significant” contact with California supporting application of California law to non-

residents. As this Court has noted, “[e]ach plaintiff’s home state has an interest in protecting its

consumers from in-state injuries caused by foreign corporations and in delineating the scope of

recovery for its citizens under its own laws.” In re HP Inkjet Printer Litig., No. 05-3580, 2008

WL 2949265, at *6 (N.D. Cal. July 25, 2008) (Fogel, J.) (unpublished) (quoting In re Ford Motor

Co. Ignition Switch Prods. Liab. Litig., 174 F.R.D. 332, 348 (D.N.J. 1997)).9 That is, “[i]f

recovery for breach of warranty or consumer fraud is possible, the injury is decidedly where the

consumer is located, rather than where the seller maintains its headquarters.” In re

Bridgestone/Firestone, Inc., 288 F.3d 1012, 1018 (7th Cir. 2002); In re Pharm. Indus. Av’g

Wholesale Price Litig., 230 F.R.D. 61, 83 (D. Mass. 2005) (“Courts have generally rejected

application of the law of a defendant’s principal place of business to a nationwide class.”).

9 Because In re HP Inkjet Printer Litig. is an unpublished decision, Ducati does not cite it asbinding precedent, but instead brings it to the Court’s attention so that the Court mayconsider its reasoning in addressing the issue. Cf. Schwarzkopf v. Intern. BusinessMachines, Inc., No. 08-2715, 2010 WL 1929625, at *9 (N.D. Cal. May 12, 2010) (Fogel,J.) (“consider[ing] the legal reasoning of the two [unpublished] cases as persuasiveauthority”).


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For the majority portion of the putative class that does not reside in California and

purchased a Ducati motorcycle during the proposed class period, plaintiffs do not plead that these

non-residents had any contact with California, let alone a “significant contact.” Util. Consumers’

Action Network v. Powernet Global Comm., No. 06-1773, 2006 U.S. Dist. LEXIS 78546, at *16

(S.D. Cal. Oct. 20, 2006) (striking class allegations for proposed nationwide UCL class;

“[a]pplying the forum state’s laws to parties located beyond the state’s borders, who have no

relationship with the forum state, would abrogate the parties’ rights under the Due Process and

Full Faith and Credit [C]lauses”). Accordingly, plaintiffs’ class allegations should be stricken

with prejudice. See In re HP Inkjet Printer Litig., 2008 WL 2949265, at *7 (“A proposed

amendment to a class allegation may be deemed futile where even with the amendment class

certification should be denied.”).

CONCLUSION

For all of these reasons, Ducati respectfully requests that the Court dismiss all of plaintiffs’

claims with prejudice or, alternatively, strike all purported class allegations from the Amended

Complaint with prejudice, together with such other and further relief as the Court deems just and

proper.

Dated: February 14, 2011 SIMPSON THACHER & BARTLETT LLP

By /s/David W. Ichel (pro hac vice)Mary Elizabeth McGarry (pro hac vice)Joseph M. McLaughlin (pro hac vice)425 Lexington AvenueNew York, New York 10017Telephone: (212) 455-2000Facsimile: (212) 455-2502

Simona G. Strauss, 203062Stephen P. Blake, 2600692550 Hanover StreetPalo Alto, California 94304Telephone: (650) 251-5000Facsimile: (650) 251-5002

Attorneys for DefendantDUCATI NORTH AMERICA, INC.


Documents

DAVID W. ICHEL (pro hac vice - Gibbs Law Group · JONAS SUGARMAN and QUANG LE, on behalf of themselves and all others similarly situated, Plaintiffs, v. DUCATI NORTH AMERICA, INC.,