DC01-#411961-v1-Tailgate -- SJ Brief FINALfiles.courthousenews.com/2015/11/16/ford summary judgment motion.pdf · defendant ford motor company’s motion for summary judgment; case

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DEFENDANT FORD MOTOR COMPANY’S MOTION FOR SUMMARY JUDGMENT; CASE NO. 11-cv-2953-RS

Amir Nassihi (State Bar No. 235936)SHOOK, HARDY & BACON L.L.P.One Montgomery, Suite 2700San Francisco, California 94104Telephone: (415) 544-1900Facsimile: (415) [email protected]

John M. Thomas (State Bar No. 266842)DYKEMA GOSSETT PLLC2723 South State Street, Suite 400Ann Arbor, MI 48104Telephone: (734) 214-7660Facsimile: (734) [email protected]@dykema.com

Terri S. Reiskin (Admitted Pro Hac Vice)Eric C. Tew (Admitted Pro Hac Vice)DYKEMA GOSSETT PLLC1300 I Street, N.W. Suite 300 WestWashington, D.C. 20005Telephone: 202-906-8600Facsimile: [email protected]@dykema.com

Attorneys for Defendant Ford Motor Company

UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

IN RE FORD TAILGATE LITIGATION Case No. 11-CV-2953-RS

NOTICE OF MOTION, MOTION ANDMEMORANDUM OF POINTS ANDAUTHORITIES IN SUPPORT OFDEFENDANT FORD MOTORCOMPANY’S MOTION FOR SUMMARYJUDGMENT AS TO THE CLAIMS OFTHE CALIFORNIA, NEW JERSEY, ANDFLORIDA PLAINTIFFS

Judge: Hon. Richard SeeborgHEARING DATE: JULY 30, 2015, 1:30 P.M.

Case 3:11-cv-02953-RS Document 224 Filed 04/30/15 Page 1 of 36

mailto:[email protected]



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NOTICE OF MOTION AND MOTION

TO THIS COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that on July 30, 2015, at 1:30 p.m. or as soon thereafter as the

matter may be heard, in Courtroom 3 (17th Floor) of the above-entitled court, located at 450 Golden

Gate Avenue, San Francisco, California, Defendant Ford Motor Company (“Ford”) will, and hereby

does, move this Court pursuant to Fed. R. Civ. P. 56 for an Order granting summary judgment in

favor of Ford on all of the individual claims of Plaintiffs James Denning, Al Morelli, Sally

Nettleton, Spencer Ware, Brian Martin, and Zane Dery. Ford’s request is based on this Notice of

Motion and Motion, the accompanying Memorandum of Points and Authorities, the Declaration of

Eric C. Tew, the Declaration of Steven MacLean, Ph.D., P.E., the Declaration of Bruce Pound,

Ph.D., the Joint Declaration of David Harless, Ph.D. and George Hoffer, Ph.D., and such argument

as may be presented to the Court at the time of the hearing.

WHEREFORE, Ford respectfully requests that this Court enter an Order granting summary

judgment in Ford’s favor on all the claims of Plaintiffs James Denning, Al Morelli, Sally Nettleton,

Spencer Ware, Brian Martin, and Zane Dery, and dismissing Plaintiffs’ claims with prejudice.


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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES............................................................................................................... v

INDEX OF ATTACHMENTS AND ABBREVIATIONS ............................................................... ix

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

SUMMARY JUDGMENT STANDARD ............................................................................................1

I. SUMMARY JUDGMENT SHOULD BE GRANTED FOR FORD ON ALLOF THE CLAIMS OF THE CALIFORNIA PLAINTIFFS. .............................................2

A. Facts Relating To The California Plaintiffs...............................................................2

B. Plaintiffs’ Secret Warranty Claim Fails As A Matter Of Law BecauseThere Is No Evidence That Ford Had Any “Adjustment Program.”.........................3

C. Summary Judgment Should Be Granted On Plaintiffs’ CLRA Claim. .....................5

1. Ford Had No Duty To Disclose ...........................................................................5

a. There Is No Evidence Ford Knew At The Time Of Sale Of Any SafetyRisks Associated With A Cracked Applique.................................................6

b. The Evidence Shows That A Cracked Appliqué Does Not Pose AnyUnreasonable Safety Risks Even Today......................................................11

2. Denning Cannot Prove That He Would Have Seen A Disclosure.....................13

3. Morelli Does Not Have Standing Under The CLRA.........................................14

D. Summary Judgment Should Be Granted For Ford On Plaintiffs’ UCL Claims ......15

1. There Is No Evidence Of Any Fraudulent, Unfair Or Unlawful Practices........15

2. Denning And Nettleton Cannot Prove Reliance. ...............................................16

E. Summary Judgment Should Be Granted On Plaintiffs’ Claims For RestitutionUnder The UCL. .....................................................................................................16

II. SUMMARY JUDGMENT SHOULD BE GRANTED FOR FORD ON WARE ANDMARTIN’S CLAIMS UNDER THE NEW JERSEY CONSUMER FRAUD ACT .......17

A. Facts Relating To The New Jersey Plaintiffs ..........................................................17

B. Ford Had No Duty To Disclose The Alleged Defect. .............................................18

C. Plaintiffs’ Claims Fail Because The Undisclosed Information Was Not Material..22

III. SUMMARY JUDGMENT SHOULD BE GRANTED ON DERY’S CLAIM UNDERTHE FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT. ................23

A. Facts Relating to Plaintiff Zane Dery ......................................................................23


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B. Summary Judgment Should Be Granted On Dery’s FDUTPA Claim BecauseHe Had Knowledge Of The Alleged Defect Before Purchasing His Vehicle .........23

C. Dery Cannot Prove That He Sustained Actual Damages Under FDUTPA.............24

CONCLUSION...................................................................................................................................25


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TABLE OF AUTHORITIES

Page(s)

Federal Cases

Alban v. BMW of N. Am., LLC,2010 U.S. Dist. LEXIS 94038 (D.N.J. Sept. 8, 2010) ......................................................19, 20, 21

Anderson v. Liberty Lobby,477 U.S. 242 (1986)........................................................................................................................2

Avedisian v. Mercedes-Benz USA, LLC,43 F. Supp. 3d 1071 (C.D. Cal. 2014) ................................................................................6, 11, 16

Celotex Corp. v. Cattrett,477 U.S. 317 (1986)........................................................................................................................1

Cholakyan v. Mercedes-Benz USA, LLC,796 F. Supp. 2d 1220 (C.D. Cal. 2011) ..........................................................................................4

Cirulli v. Hyundai Motor Co.,2009 U.S. Dist. LEXIS 125139 (C.D. Cal. June 12, 2009) ............................................................5

Corrosion Proof Fittings v. EPA,947 F.2d 1201 (5th Cir. 1991) ......................................................................................................12

Corson v. Toyota Motor Sales, U.S.A., Inc.,2013 U.S. Dist. LEXIS 63260 (C.D. Cal. Apr. 24, 2013) ..............................................................4

Crouch v. Johnson & Johnson Consumer Cos.,2010 U.S. Dist. LEXIS 37517 (D.N.J. Apr. 15, 2010) .................................................................22

Daniel v. Ford Motor Co.,2013 U.S. Dist. LEXIS 80638 (E.D. Cal. June 7, 2013) ..................................................13, 14, 16

Duffy v. Samsung Elecs. Am., Inc.,2007 U.S. Dist. LEXIS 14792 (D.N.J. Mar. 2, 2007).............................................................19, 21

Ewert v. eBay, Inc.,2010 U.S. Dist. LEXIS 108838 (Sept. 30, 2010) .........................................................................14

In re Ford Motor Co. E-350 Van Prods. Liab. Litig.,2010 U.S. Dist. LEXIS 68241 (D.N.J. July 9, 2010)........................................................14, 17, 24

Glass v. BMW of N. Am., LLC,2011 U.S. Dist. LEXIS 149199 (D.N.J. Dec. 29, 2011).........................................................19, 21

Glauberzon v. Pella Corp.,2011 U.S. Dist. LEXIS 38138 (D.N.J. Apr. 5, 2011) .......................................................19, 20, 21


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Groupion, LLC v. Groupon, Inc.,859 F. Supp. 2d 1067 (N.D. Cal. 2012)........................................................................................17

Hensley-Maclean v. Rosen,2014 U.S. Dist. LEXIS 48591 (N.D. Cal. Apr. 7, 2014) ............................................................5, 9

Hokto Kinoko Co. v. Concord Farms,810 F. Supp. 2d 1013 (C.D. Cal. 2011) ..........................................................................................2

Maniscalco v. Brother Intern. Corp.,627 F. Supp. 2d 494 (D.N.J. 2009)...............................................................................................20

Marchante v. Sony Corp. of Am.,2011 U.S. Dist. LEXIS 139564 (S.D. Cal. Dec. 5, 2011) ..........................................................5, 7

Mazur v. eBay, Inc.,257 F.R.D. 563 (N.D. Cal. 2009)..................................................................................................14

FTC v. Mylan Labs., Inc.,62 F. Supp. 2d 25 (D.D.C. 1999)..................................................................................................24

Nafar v. Hollywood Tanning Sys., Inc.,2010 U.S. Dist. LEXIS 65183 (D.N.J. June 30, 2010).................................................................22

Nelson v. Nissan North Am., Inc.,2014 U.S. Dist. LEXIS 175382 (D.N.J. Dec. 19, 2014).................................................................7

Nobile v. Ford Motor Co.,2011 U.S. Dist. LEXIS 26766 (D.N.J. Mar. 14, 2011)...........................................................19, 21

Noble v. Porsche Cars N. Am., Inc.,694 F. Supp. 2d 333 (D.N.J. 2010).........................................................................................19, 21

Person v. Google, Inc.,2007 U.S. Dist. LEXIS 22499 (Mar. 16, 2007)............................................................................14

Pop's Pancakes, Inc. v. NuCO2, Inc.,251 F.R.D. 677 (S.D. Fla. 2008)...................................................................................................24

Skeen v. BMW of N. Am., LLC,2014 U.S. Dist. LEXIS 9256 (D.N.J. Jan. 24, 2014)..............................................................19, 21

Smith v. Ford Motor Co.,462 Fed. App’x 660 (9th Cir. 2011) .................................................................................4, 5, 6, 16

Smith v. Ford Motor Co.,749 F. Supp. 2d 980 (N.D. Cal. 2010)................................................................................9, 14, 15

Suddreth v. Mercedes-Benz, LLC,2011 U.S. Dist. LEXIS 126237 (D.N.J. Oct. 31, 2011) ...............................................................20


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Tatum v. Chrysler Group, LLC,2011 U.S. Dist. LEXIS 32362 (D.N.J. Mar. 28, 2011).................................................................19

Wilson v. Kruschen,668 F.3d 1136 (9th Cir. 2012) .............................................................................................. passim

Withers v. eHarmony, Inc.,2011 U.S. Dist. LEXIS 155543 (C.D. Cal. Mar. 4, 2011)................................................13, 14, 16

Zepeda v. PayPal, Inc.,777 F. Supp. 2d 1215 (N.D. Cal. 2011)........................................................................................14

State Cases

Colgan v. Leatherman Tool Group, Inc.,135 Cal. App. 4th 663 (2006) .......................................................................................................17

Egwuatu v. South Lubes, Inc.,976 So. 2d 50 (Fla. Dist. Ct. App. 2008) ......................................................................................24

Kia Motors Am. Corp. v. Butler,985 So. 2d 1133 (Fla. Dist. Ct. App. 2008) ............................................................................23, 24

Korea Supply Co. v. Lockheed Martin Corp.,29 Cal.4th 1134 (2003) ...........................................................................................................15, 16

In re Lead Paint Litigation,924 A.2d 484 (N.J. 2007) .............................................................................................................21

Mirkin v. Wasserman,858 P.2d 568 (Cal. 1993)..............................................................................................................13

Perkins v. DaimlerChrysler Corp.,890 A.2d 997 (N.J. App. 2006) ....................................................................................................19

Porsche Cars N. Am., Inc. v. Diamond,140 So. 3d 1090 (Fla. Dist. Ct. App. 2014) ..................................................................................23

Rollins, Inc. v. Butland,951 So. 2d 860 (Fla. Dist. Ct. App. 2006) ....................................................................................25

Sinclair v. Merck & Co., Inc.,948 A.2d 587 (N.J. 2008) .............................................................................................................21

Thiedemann v. Mercedes-Benz USA, LLC,872 A.2d 783 (N.J. 2005) .................................................................................................18, 19, 22

State Statutes

Cal. Bus. & Prof. Code § 17200 .........................................................................................................15


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Cal. Civ. Code § 1761.........................................................................................................................14

Cal. Civ. Code § 1795.90..................................................................................................................3, 4

Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. Ann. §§ 501.201-213, etseq. ................................................................................................................................................23

New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-2 ...............................................................22

New Jersey Product Liability Act, N.J. Stat. Ann. 2A:58C-1 ............................................................21


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INDEX OF ATTACHMENTS AND ABBREVIATIONS

ATTACHMENT ABBREVIATION

Declaration of Eric C. Tew in Support ofDefendant Ford Motor Company’s Motion forSummary Judgment as to the Claims of theCalifornia, New Jersey, and Florida Plaintiffs

Tew Decl.

Exhibit 1: Deposition of Sally Nettleton (Aug.20, 2013)

Nettleton

Exhibit 2: Deposition of James Denning (Aug.21, 2013)

Denning

Exhibit 3: Deposition of Alfred C. Morelli(Aug. 22, 2013)

Morelli

Exhibit 4: Technical Service Bulletin 05-24-2(NTL1 000007-9)

Tew Decl. Ex. 4

Exhibit 5: Deposition of Brian Bauer (Aug.26, 2014)

Bauer

Exhibit 6: Deposition of Vladimir Beltran(Sept. 10, 2014)

Beltran

Exhibit 7: Deposition of Gerald Bissi (Aug. 1,2014)

Bissi

Exhibit 8: Deposition of Charles Kopeika(Aug. 2, 2013)

Kopeika

Exhibit 9: Deposition of William Curtiss(Aug. 7, 2014)

Curtiss

Exhibit 10: Deposition of Aaron Halonen(Nov. 22, 2013)

Halonen

Exhibit 11: Deposition of Thomas Herline(Sep. 6, 2013)

Herline


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Exhibit 12: Deposition of Joseph Watson(Oct. 3, 2014)

Watson

Exhibit 13: Deposition of David Walters (Oct.24, 2014)

D. Walters

Exhibit 14: Deposition of Shawn Walters(Nov. 5, 2014)

S. Walters

Exhibit 15: Deposition of Kevin Ricks (Aug.28, 2013)

Ricks

Exhibit 16: Deposition of David Yu (Sep. 23,2014)

Yu

Exhibit 17: Deposition of Henry Chamberlain(Jan. 15, 2015)

Chamberlain

Exhibit 18: Deposition of Phil Evenhouse(Sep. 15, 2014)

Evenhouse

Exhibit 19: Deposition of Gerald Forbes (Jan.27, 2015)

Forbes

Exhibit 20: NTL5 000292-352 Tew Decl. Ex. 20

Exhibit 21: NTL 0002659, NTL 0002669 Tew Decl. Ex. 21

Exhibit 22: NTL 0009284, NTL 0009291 Tew Decl. Ex. 22

Exhibit 23: NTL 0002766 Tew Decl. Ex. 23

Exhibit 24: Declaration of Spencer Cowley(Redacted)

Tew Decl. Ex. 24

Exhibit 25: Deposition of Spencer Ware (Sep.17, 2013)

Ware


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Exhibit 26: Deposition of Brian Martin (Sep.10, 2014)

Martin

Exhibit 27: Deposition of Zane Dery (Sep. 25,2013)

Dery

Exhibit 28: Exhibit 23 to the Deposition ofJoseph Watson

Tew Decl. Ex. 28

Declaration of Steven MacLean, Ph.D., P.E. MacLean Decl.

Declaration of Bruce Pound, Ph.D. Pound Decl.

Joint Declaration of David W. Harless, Ph.D.and George E. Hoffer, Ph.D.

Harless & Hoffer Decl.


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MEMORANDUM OF POINTS AND AUTHORITIES

Plaintiffs seek to hold Ford Motor Company (“Ford”) liable for statutory fraud because Ford

did not tell them at the time of sale of their 2002-2005 model year vehicles that a plastic trim piece

known as a liftgate appliqué might develop a crack after being driven for many years and tens of

thousands of miles. Plaintiffs’ fraud theories, if accepted, would require manufacturers to

affirmatively disclose to consumers everything they know might (but probably will not) go wrong

with any of their products at any time in the entire life of the product. But Plaintiffs’ theories are not

viable under the laws of any jurisdiction, including the three at issue here: California, New Jersey,

and Florida. No product manufacturer routinely discloses all of the defects it has repaired under

warranty, even though it knows that those same defects might (or might not) occur in the same

product sold to other purchasers, either during or after the warranty period, nor does anyone expect

such a disclosure. The claims asserted by Plaintiffs in this case are utterly inconsistent with these

realities of universally accepted commercial practice. Because their claims fail under state law for

this and a variety of other reasons detailed below, summary judgment should be granted for Ford on

the individual claims of California Plaintiffs Sally Nettleton, James Denning, and Al Morelli, New

Jersey Plaintiffs Spencer Ware and Brian Martin, and Florida Plaintiff Zane Dery.1

SUMMARY JUDGMENT STANDARD

The party moving for summary judgment bears the initial burden of establishing “the

absence of a genuine issue of material fact.” Celotex Corp. v. Cattrett, 477 U.S. 317, 323 (1986).

The burden then shifts to the adverse party, who must “go beyond the pleadings and by [the

movant’s] own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’

designate ‘specific facts showing that there is a genuine issue for trial.’” Id. at 324. Evidence that

“is merely colorable . . . or is not significantly probative” does not defeat summary judgment.

Anderson v. Liberty Lobby, 477 U.S. 242, 249 (1986). Rather “[a] non-moving party who has the

burden of proof at trial must present enough evidence that a ‘fair-minded jury could return a verdict

1 The parties stipulated that Plaintiffs’ class certification motion would be limited to their claimsunder California, New Jersey and Florida law, and that full discovery would proceed only as tothese three states. (ECF 111.) Ford’s summary judgment motion is directed to the individual claimsof the six named Plaintiffs in these three states.


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for the [opposing party] on the evidence presented.’” Hokto Kinoko Co. v. Concord Farms, 810 F.

Supp. 2d 1013, 1021 (C.D. Cal. 2011) (quoting Anderson, 477 U.S. at 255).

I. SUMMARY JUDGMENT SHOULD BE GRANTED FOR FORD ON ALL OF THECLAIMS OF THE CALIFORNIA PLAINTIFFS.

A. Facts Relating To The California Plaintiffs

Sally Nettleton purchased a used 2003 Ford Explorer on November 28, 2003. (Nettleton

48:18-23.) The vehicle had 21,192 miles on it at the time of purchase and had previously been part

of the Hertz rental car fleet. (Nettleton 44:22-45:7, 53:10-17.) Prior to purchasing the Explorer,

Nettleton did not do any research, did not review a sales brochure or any other written materials,

and does not recall seeing any particular advertisements. (Id. 54:14-55:7-21.) The appliqué on her

vehicle cracked in February 2008, when the vehicle was five years old and had 92,000 miles on it.

(Nettleton 110:9-112:15.) The dealership declined to repair the appliqué under warranty because

both the new vehicle warranty and extended warranty had expired. (Id. 111:24-112:15.) Nettleton

followed up with two letters to Ford asking that Ford cover the cost of the repair, or part of it, but

Ford declined. (Id. 115:6-10, 118:25-119:5.) Nettleton never fixed the appliqué, and has now been

driving the car for more than 7 years since the crack occurred. (Id. 119:24-120:7.) The liftgate glass

on Nettleton’s vehicle has never broken, nor has any part of the appliqué fallen off. (Id. at 123:2-

12.)

Plaintiff James Denning purchased a new 2004 Explorer on March 12, 2004. (Denning 23:9-

11; 32:16-20.) Prior to purchasing the Explorer, Denning did not do any research and did not see or

review any materials from Ford, such as the sales brochure, the owner’s manual, the warranty guide,

or the scheduled maintenance guide. (Id. 42:10-20; 47:10-16; 95:4-8; 141:24-143:16; 164:11-14.).

Denning did not consider the potential future costs of repairs and maintenance when purchasing the

Explorer. (Id. 37:18-24.) The appliqué on Denning’s Explorer cracked in August 2011, when the

vehicle was more than seven years old and had approximately 109,000 miles on it. (Id. 69:8-21,

80:1-13.) The vehicle was well past any applicable warranty coverage, so Denning paid $438 to

have the appliqué repaired. (Id. 71:22-24.) The liftgate glass on his vehicle has never fallen out or

come loose. (Id. 103:7-22.) Aside from the cracked appliqué, Denning has been happy with his


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Explorer and plans to keep it. (Id. 168:10-17.)

Al Morelli purchased a new 2003 Explorer on September 6, 2003. (Morelli 102:8-18.)

Morelli uses the vehicle in his real estate brokerage and property management businesses. (Id.

20:25-21:6; 28:11-16.) He depreciates the vehicle as a business expense on his taxes, and also takes

a deduction for all mileage related to business trips. (Id. 28:17-32:11.) Unlike Nettleton and

Denning, Morelli did “a lot of research” and “looked at a lot of different” websites to compare the

overall reliability ratings between the Explorer and other vehicles prior to purchase. (Id. 78:14-20;

82:25-84:19.) Morelli did most of his research on various third-party websites, although he also

looked at the Ford website to see what features and options were available on the Explorer. (Id.

81:2-17.) The appliqué on Morelli’s Explorer cracked in August 2011, when the vehicle was

approximately eight years old and had 54,000 miles on it. (Id. 52:19-25.) Ford denied his request to

cover the cost of repair because his vehicle was out of warranty. (Id. 125:8-23.) Morelli has not had

the appliqué repaired, other than putting some “foam-type material” in the crack himself. (Id. 64:3-

20.) Despite having a cracked appliqué since 2011, his liftgate glass has never shattered, nor has the

appliqué fallen off. (Id. 120:23-121:2.)

B. Plaintiffs’ Secret Warranty Claim Fails As A Matter Of Law Because There IsNo Evidence That Ford Had Any “Adjustment Program.”

Plaintiffs have failed to put forth any evidence that Ford has ever had any “adjustment

program” for appliqué repairs, much less that the cracked appliqué “substantially” affects the

vehicles’ durability, reliability or performance, as required by Cal. Civ. Code § 1795.90(d).2

Plaintiffs make the conclusory allegation in the TCAC that Ford’s Technical Service Bulletins

(“TSBs”) relating to repair of the appliqué “were part of a program set forth by Ford where Ford’s

dealers would repair the defective tailgates free of charge only when certain undisclosed conditions

were met” and “that this program expanded and/or extended the original warranty.” (TCAC ¶ 354.)

At the same time, however, Plaintiffs admit that the TSBs specifically state that appliqué repairs

2 An “adjustment program” is defined as a “program or policy that expands or extends theconsumer’s warranty beyond its stated limit or under which a manufacturer offers to pay for all orany part of the cost of repairing, or to reimburse consumers for all or any part of the cost ofrepairing, any condition that may substantially affect vehicle durability, reliability, or performance.Cal. Civ. Code § 1795.90(d).


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were “Eligible under the provisions of bumper to bumper warranty coverage.” (TCAC ¶¶ 69-73;

Tew Decl. Ex. 4.) In other words, the only “condition” for a free repair was that it occur during the

three-year/36,000 mile warranty period. The plain language of the TSBs did not “expand or extend”

the warranty beyond its stated limits, but instead expressly limited coverage to the terms of the

warranty.

In Corson v. Toyota Motor Sales, U.S.A., Inc., 2013 U.S. Dist. LEXIS 63260 (C.D. Cal. Apr.

24, 2013), the court rejected a secret warranty claim for the same reasons. Plaintiffs brought a

putative class action alleging that certain Toyota vehicles had a defectively designed power steering

system. Id. at *2. Toyota had issued a TSB to address the issue, pursuant to which the vehicle owner

was responsible for the repair cost unless the vehicle was within the 3 year/36,000 mile warranty.

Id. at *4. Plaintiffs asserted a secret warranty law claim on the basis that the TSB constituted an

“adjustment program.” Id. at *14. The court dismissed plaintiffs’ secret warranty claim, because the

“Plaintiffs’ allegation that the voluntary procedure would be paid for by the consumer unless the

Vehicle’s 36 month/36,000 mile warranty is in effect undermines their allegation that the TSB

extended warranty coverage beyond the original period or constituted an adjustment program.” Id.

at *17; see also Cholakyan v. Mercedes-Benz USA, LLC, 796 F. Supp. 2d 1220, 1240 (C.D. Cal.

2011) (dismissing secret warranty claim because the “plain language of the TSB” made clear that

the repair was only covered if the vehicle was still under warranty). Similarly, the TSBs issued by

Ford expressly limit coverage to the terms of the warranty.

Nor can Plaintiffs’ claim survive based on their mere allegation that “in some situations,

Ford agreed to pay or give reimbursements for repairs to the tailgates.” (TCAC ¶ 355). Both

Nettleton and Morelli requested that Ford pay for repairs to their appliqués, but Ford denied their

requests because their vehicles were out of warranty. (Nettleton 108:19-112:15; Morelli 125:8-23.)

And even if there were evidence that Ford agreed to reimburse some customer’s repair costs outside

of warranty “in some situations,” such case-by-case decisions do not constitute an “adjustment

program” as a matter of law. Cal. Civ. Code § 1795.90(d) (“‘Adjustment program’ does not include

ad hoc adjustments made by a manufacturer on a case-by-case basis.”); see also Smith v. Ford

Motor Co., 462 Fed. App’x 660, 664 (9th Cir. 2011) (affirming summary judgment for Ford


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because ad hoc, case-by-case adjustments did not constitute an adjustment program); Cirulli v.

Hyundai Motor Co., 2009 U.S. Dist. LEXIS 125139, at *16 (C.D. Cal. June 12, 2009) (same).

Accordingly, summary judgment should be granted for Ford on Plaintiffs’ secret warranty claim.

C. Summary Judgment Should Be Granted On Plaintiffs’ CLRA Claim.

Ford is entitled to summary judgment on Denning’s and Morelli’s CLRA claims3 because

Ford had no duty to disclose the alleged defect. In addition, Denning cannot prove reliance because

his testimony shows that that he would not have seen any disclosure, and Morelli has no standing to

assert a CLRA claim because he purchased his vehicle for business purposes.

1. Ford Had No Duty To Disclose.

In cases involving an alleged product defect “California courts have generally rejected a

broad obligation to disclose,” because to hold otherwise “‘would eliminate term limits on

warranties, effectively making them perpetual or at least for the ‘useful life’ of the product.’”

Wilson v. Kruschen, 668 F.3d 1136, 1141 (9th Cir. 2012) (citation omitted). Indeed, the Plaintiffs’

experiences in this case exemplify this concern, as the appliqué did not crack until the vehicles were

well past the warranty period, which is why the Court has already dismissed all of their express and

implied warranty claims. Thus, the rule in California is that “a manufacturer’s duty to consumers is

limited to its warranty obligations absent either an affirmative misrepresentation or a safety issue.”

Id. at 1141; Smith v. Ford Motor Co., 462 Fed. App’x at 663 (holding that there is no duty to

disclose under the CLRA unless the alleged defect “constitute(s) a safety concern”). Plaintiffs do

not allege that Ford made any misrepresentations, so their claims ultimately rest on proof of a safety

defect.

To show that Ford had a duty to disclose, Plaintiffs must prove that Ford had knowledge of

the safety defect at the time of sale because “a manufacturer has ‘no duty to disclose facts of which

it was unaware’” and the CLRA does not impose a post-sale duty to warn. Marchante v. Sony Corp.

of Am., 2011 U.S. Dist. LEXIS 139564, at *10 (S.D. Cal. Dec. 5, 2011) (citation omitted); Hensley-

Maclean v. Rosen, 2014 U.S. Dist. LEXIS 48591, at *25 (N.D. Cal. Apr. 7, 2014) (holding that it is

3 The Court previously dismissed Nettleton’s CLRA claim based on the statute of limitations. (ECF182, at 9.) To the extent that Nettleton asserts a fraudulent conduct claim under the UCL, that claimfails because Ford had no duty to disclose for all of the reasons set forth herein.


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only “the defendant’s pre-sale representations and omissions that matter under the CLRA” and

rejecting plaintiffs’ post-sale duty to warn claim under the CLRA). The mere awareness of a defect

is not enough. Rather, Plaintiffs must prove that Ford knew of a direct causal connection between

the alleged defect and the alleged safety hazard. Wilson, 668 F.3d at 1144 (affirming dismissal of

CLRA claim because plaintiffs had not shown “a sufficient nexus between the alleged design defect

and the alleged safety hazard”). Moreover, speculative safety concerns that are unsupported by the

evidence are insufficient as a matter of law to give rise to a duty to disclose. Smith, 462 Fed. App’x

at 663 (“We agree with the district court that the ‘safety’ concerns raised by plaintiffs were too

speculative, as a matter of law, to amount to a safety issue giving rise to a duty of disclosure.”).

Finally, the alleged defect must pose an “unreasonable safety hazard.” Wilson, 668 F.3d at 1143.

The risk of insignificant or minor injuries, even where such injuries actually have occurred to a

“substantial number of people,” does not constitute an “unreasonable safety hazard.” See Avedisian

v. Mercedes-Benz USA, LLC, 43 F. Supp. 3d 1071, 1078-79 (C.D. Cal. 2014) (granting summary

judgment because “no reasonable factfinder could find that the injuries resulting from the [alleged

defect] are severe enough to present an unreasonable safety hazard”). Plaintiffs cannot satisfy each

of these elements.

a. There Is No Evidence Ford Knew At The Time Of Sale Of AnySafety Risks Associated With A Cracked Appliqué.

The latest iteration of Plaintiffs’ safety allegations is that the crack in the appliqué allows

water to enter, which can cause corrosion of a metal studplate that sits beneath it, which in turn

allegedly makes the liftgate glass “more susceptible to breaking and shattering,” and can also result

in inadvertent unlatching of the liftgate glass. (ECF 215, at 2.)4 Plaintiffs also assert that the

appliqué can detach completely, and if the appliqué comes off or the glass breaks on the highway, it

results in “vehicle-related road debris” (“VRRD”). (Id.) As discussed below, Plaintiffs’ purported

experts have failed to show that any of these theories have merit. But the Court need not even reach

that issue. Summary judgment should be granted because there is no evidence whatsoever that Ford

4 A detailed description of the design of the liftgate assembly, including a schematic, is set forth inthe Declaration of Steven MacLean, Ph.D., P.E. (MacLean Decl. ¶ 10 & Figs. 1-2.)


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had any knowledge when these vehicles were sold in the 2002 to 2005 model years that a cracked

appliqué created any safety risks at all, much less any unreasonable risks.

Plaintiffs appear to concede that Ford had no actual knowledge of any safety defect, instead

claiming that Ford “should have known,” but failed to “conduct any testing to determine if the

Cracked Tailgate Problem led to any safety risks.” (ECF No. 215, at 20.) In so doing, Plaintiffs

improperly attempt to impose a negligence standard for their statutory fraud claims. See Nelson v.

Nissan North Am., Inc., 2014 U.S. Dist. LEXIS 175382, at *10 (D.N.J. Dec. 19, 2014) (“[T]he

failure to test a product is not actionable under either [the UCL or CLRA]. To accept [plaintiff’s]

argument would be to misinterpret the statutes as encompassing negligent conduct.”). In any event,

Plaintiffs have failed to show that Ford knew, or even “should have known,” of the safety risks they

allege. Every Ford employee who was asked testified that the cracked appliqué was not a safety

defect. (Bauer 127:6-14; Beltran 60:20-61:5; Bissi 210:23-25; Kopeika 216:14-16; Curtiss 217:15-

218:24; Halonen 138:16-22, 141:12-15; Herline 211:4-14; Watson 182:4-8.) The same is true of the

witnesses from Dura and Lacks, Ford’s suppliers for the appliqué and liftgate assembly. (D. Walters

116:21-117:2; S. Walters 151:18-24.) Moreover, Ford’s Automotive Safety Office reviewed the

TSBs relating to appliqué repairs, copies of which were also provided to the National Highway

Traffic Safety Administration (“NHTSA”), and no safety concerns were raised. (Bissi 70:20-71:9;

Herline 106:2-15; Ricks 160:5-18; Yu 7:10-14.) This is fatal to Plaintiffs’ CLRA claim because it is

Ford’s knowledge—not the hindsight “knowledge” of Plaintiffs’ experts a decade or more later—

that is at issue. See Wilson, 668 F.3d at 1146 (holding that plaintiff’s evidence failed to show that

the defendant was “aware that the defect posed a safety hazard”); Marchante, 2011 U.S. Dist.

LEXIS 139564, at *11 (holding that while defendant knew of the defect, plaintiffs failed to show

that defendant knew “that the defect pose[d] any safety hazard”).

While Plaintiffs can show that, during the period in which the 2002-2005 model year

vehicles were sold, Ford was aware of cracked appliqués (and, indeed, changed the material used

for the appliqué to address the problem and covered it under warranty), and that Ford was aware of

instances of liftgate glass breakage, there is no evidence to show that Ford ever—to this day—

thought there was a causal connection between the two. (ECF 215, at 14-16.) Indeed, a recall


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relating to the struts and hinge attachments for the liftgate glass that affected some of the vehicles in

the putative class could result in glass breakage, so it was not surprising that reports of glass

breakage were occurring.5 At deposition, Ford employee Joseph Watson was shown a summary of

warranty claims compiled by Plaintiffs that included 25 vehicles with glass breakage, but none of

those vehicles had a cracked appliqué. (Watson 196:20-197:8; Tew Decl. Ex. 28.) Watson also was

shown reports of 28 vehicles with a cracked appliqué, but none of those vehicles had glass

breakage. (Watson 197:9-198:2.) So while there were some reports of the appliqué cracking and

some reports of liftgate glass breaking, there was no connection between these events. (Id. 182:4-8

(“These were two separate issues. . . . [T]he glass breakage issue was strictly due to the mounting

design . . . of the liftgate struts and ball stud and hinge attachments. And the liftgate appliqué crack

was a completely separate cosmetic issue.”); Curtiss 218:12-24 (“no relationship” between the

cracked appliqué and glass breakage).)

Plaintiffs’ own expert did not come up with his glass breakage theory until 2014 (three years

after this case was filed), when he was shown a Canadian vehicle, not in the putative class, in which

the liftgate glass broke and a corroded studplate was found. (Chamberlain 105:20-25, 108:4-24.)

With this single vehicle as evidence, Chamberlin set out to prove the theory by looking in junkyards

to try to find other corroded studplates (never mind that they might not be representative of on-road

vehicles). Then he devised testing that actually disproves any causal link between corrosion and

glass breakage. Chamberlain ran “slam” tests (opening and shutting the liftgate glass) on liftgates

with corroded latch plates or detached bolts (with severe corrosion, Chamberlain believes the bolts

can separate from the heads). (MacLean Decl. ¶¶ 61-63; Chamberlain 97:4-18.) Despite running

over 200,000 slam cycles, the glass failed to break on any of the liftgates—all of which were

already at least 10 years old when they were subjected to this extreme and unrealistic testing.

(MacLean Decl. ¶ 63.) In one test, he was able to get a small chip on the glass, but the glass never

shattered, and that test required 125,000 slam cycles—the equivalent of more than 100 years of

5 Plaintiffs point to some “unexplained” glass breakage reports and suggest that these shouldsomehow have put Ford on notice of a causal connection. (ECF 215, at 16.) But Plaintiffsmisconstrue these reports, which indicate only that the records were insufficient to determine if thehinge and strut recall was involved. In any event, only actual knowledge can give rise to a duty todisclose.


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use—on a test vehicle that was already 12 years old and was only achieved after Chamberlain’s

assistant artificially forced the studs to make contact with the glass. (Id. ¶ 62.)6

Similarly, while Plaintiffs have identified some warranty records in which reference is made

to appliques “falling off” or detaching from vehicles, mostly in the form of snippets of text entered

by technicians reporting what they heard from customers (ECF 215, at 17-18), they have no

evidence that Ford believed at the time that there was a problem with detaching appliques more

generally or that any substantial safety issue existed as a result.7 Despite an exhaustive search of a

more than a decade’s worth of warranty records, Plaintiffs found only six records that assert the

appliqué fell off on the highway, which is the only way it could constitute the alleged safety hazard

of VRRD. But all of these incidents occurred after Denning and Morelli purchased their vehicles,

and the CLRA does not impose a post-sale duty to warn. Hensley-Maclean, 2014 U.S. Dist. LEXIS

48591, at *25. Moreover, none of the comments indicates that the appliqué caused a crash or injury.

It is simply unreasonable to conclude that six short comments buried in thousands of records in

which there is no indication of any crash or injury, were sufficient to give Ford knowledge of an

unreasonable safety hazard.

Similarly unavailing is Plaintiffs’ effort to demonstrate knowledge by means of stray word

choices. Plaintiffs rely on their interpretation of the words “detaching,” which Ford employee Phil

Evenhouse used in an e-mail, and “separation,” which Evenhouse used when he drafted TSB 02-25-

6. (ECF 215, at 16.) But Evenhouse testified that he did not know of any incidents where the

appliqué, or parts of it, ever came off completely, and that the words “detaching” and “separation”

meant “partially detached from the glass while the vast majority of the appliqué stay[ed] firmly

attached.” (Evenhouse 112:21-24, 125:8-15.) Other Ford employees also testified that they did not

6 With regard to their glass breakage and inadvertent opening theories, Plaintiffs rely on thetestimony of their experts Henry Chamberlain, Don Phillips, and Carl Locke, each of whom shouldbe excluded for the reasons set forth in Ford’s contemporaneously filed Daubert motions. However,even if they are not excluded, their testimony does not establish the existence of any unreasonablesafety defect, much less that such a defect was known to Ford.

7 These reports are hearsay within hearsay and should be excluded. See Smith v. Ford Motor Co.,749 F. Supp. 2d 980, 992 (N.D. Cal. 2010) aff’d, 462 Fed. App’x 660, 663 n.1 (9th Cir. 2011).Here, as in Smith, Plaintiffs “make no argument, let alone submit evidence to a lay a foundation toshow, the customers’ complaints, comments by any mechanic, or any other remarks containedtherein qualify under any exception to the hearsay rule.” Id.


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know of any instances in which the appliqué came off completely. (Bauer 84:3-20; Curtiss 221:16-

20; Halonen 32:7-33:3, 149:15-24; Herline 158:1-4; Watson 79:24-80:5.)

Indeed, Ford’s original TSB instructed dealers to replace the entire liftgate assembly if the

appliqué cracked, because the adhesive was so strong that it was too difficult to get the appliqué off.

(MacLean Decl. ¶ 71.) The appliqué is attached with a near continuous bead of high strength

adhesive—the same as used for windshields—to the reaction injection-molded urethane, which is

attached to the liftgate glass. (Id. ¶ 10.) While Ford eventually developed a repair procedure that did

not require replacing the entire liftgate, removing the appliqué requires the use of various tools,

including a knife to cut the adhesive. (Bissi 210:8-11; Curtiss 221:19-20; D. Walters 93:12-18;

MacLean Decl. ¶ 71.) To give the Court an idea of what is involved in removing an appliqué, and

how much effort is required, a short video is attached to the declaration of Dr. MacLean. (MacLean

Decl. Ex. C.) In sum, Plaintiffs have not produced any evidence that Ford knew, or even should

have known, that the cracked appliqué was an unreasonable safety defect.

The same is true of reports of the liftgate glass inadvertently opening. There is nothing at all

to tie such reports to the cracked appliqué, much less to demonstrate that Ford knew they were

related. Latch problems can occur for a variety of reasons, whether the appliqué is cracked or not.

(MacLean Decl. ¶¶ 69-70.) The fact that a decade after these vehicles were manufactured Plaintiffs’

experts have come up with a theory that the cracked applique somehow allows corrosion of the stud

plate that holds the latching mechanism, which can—if the corrosion is extremely severe—result in

loosening of the latch and inadvertent release, is insufficient to create liability on Ford’s part for a

problem it never knew about. Plaintiffs’ evidence consists of a hodgepodge of evidence and a game

of connect the dots: some people assert their glass has broken, some say their latch rattles or the

glass has come open or is misaligned, some of these people have had cracks in their appliqués

before these other symptoms supposedly occurred (with intervals between the two events ranging

from weeks to many years), and in a limited number of cases, Plaintiffs have even found corrosion

of the studplate. But even if this passed for scientific evidence—and it assuredly does not—there is

no evidence that Ford knew of any connection or any significant safety issue of any sort stemming

from the cracked appliqué at the time these vehicles were sold. See Wilson, 668 F.3d at 1144


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(requiring evidence of “a sufficient nexus between the alleged design defect and the alleged safety

hazard”). Certainly, the declarations solicited by Plaintiffs’ counsel, a few of which mention the

liftgate glass opening on its own, without any claim that such information was ever provided to

Ford, much less in the relevant timeframe, do not bridge the chasm between Plaintiffs’ allegations

and the actual evidence.

Moreover, while actual knowledge is required, there is no evidence that Ford even “should

have known” of these alleged defects. Plaintiffs’ safety claims relating to glass breakage are

predicated on corrosion of the studplate, which they assert is caused by water entering through the

crack in the appliqué. (ECF No. 215, at 7.) Putting aside for the moment that not all appliqué cracks

are even in the area where the studplate sits, Ford recognized the potential for water to enter behind

the appliqué and, accordingly, designed it with a water management system of weepholes to allow

water to drain. (S. Walters 148:8-149:6; MacLean Decl. ¶¶ 33, 48, 88.) Moreover, the studplate and

bolts were electro-coated specifically for the purpose of corrosion resistance. (MacLean Decl. ¶ 48;

Pound Decl. ¶¶ 27-28; S. Walters 84:16-19.) And even if a crack in the appliqué allows more water

in, it also allows more water to flow out. (S. Walters 148:25-149:1; Pound Decl. ¶ 29(d).) Plaintiffs

may criticize the design as ineffective in some vehicles, but that falls far short of demonstrating that

Ford knew of any deficiencies, much less that they might result a decade or more later in corrosion

in a very small number of vehicles which has no connection to glass breakage anyhow, as shown by

Chamberlain’s own testing.

b. The Evidence Shows That A Cracked Appliqué Does Not PoseAny Unreasonable Safety Risks Even Today.

California law imposes a duty to disclose only for known safety risks that are unreasonable,

and speculative risks or those that pose a small likelihood of minor injury are not actionable.

Wilson, 668 F.3d at 1143; Avedisian, 43 F. Supp. 3d at 1078 (cuts, scrapes and scratches from

peeling chrome trim). Plaintiffs have failed to show any unreasonable safety risk under any of their

theories. Even if Plaintiffs could prove, which they cannot, that the liftgate glass could break as a

result of severe corrosion to the studplate under the appliqué, and that Ford knew this at the time of

sale, there is no evidence that anyone has ever sustained more than slight injury as a result of the


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liftgate glass breaking. The liftgate glass, which fully complies with Federal Motor Vehicle Safety

Standard 205, is tempered glass—also known as “safety” glass—which is designed to break into

small pieces without sharp edges. (MacLean Decl. ¶¶ 23, 37.) Out of more than 1.5 million vehicles

sold, Plaintiffs identify a few instances of glass breakage resulting in minor cuts and scrapes, and

one or two where a few stitches were allegedly required, but none involving serious injury of any

kind. Such minor injuries do not constitute an “unreasonable” safety hazard.

Plaintiffs’ detaching theory fares no better. Not a single named Plaintiff in any state, most of

whom have driven their vehicles for years with a cracked appliqué, alleges that the appliqué has

fallen off. Moreover, Plaintiffs cannot prove that the potential for the appliqué to fall off after being

driven for many years and tens of thousands of miles is an unreasonable safety hazard of the sort

that gives rise to a duty to disclose. Plaintiffs’ road safety expert, Gerald Forbes, acknowledges that

all vehicles of all makes and model are subject to having parts break off, and vehicles that are older

are more likely to have parts break off. (Forbes 89:11-90:5.) Moreover, a cracked appliqué is not a

hidden condition. If the appliqué is actually coming loose to the point that it could fall off, the

vehicle owners would know it. Forbes admits that if vehicle owners do not have the crack repaired,

they are responsible for any resulting VRRD. (Id. 111:16-112:8.) And this puts to the side the fact

that home-made repairs using improper adhesives could very well be the cause of even the few

alleged incidents of appliqués coming off while driving. (Tew Decl. Ex. 24.)

Real world data confirms the absence of any safety defect. Forbes states that VRRD causes

25,000 crashes per year, but this number reflects all VRRD-related crashes in all of the United

States and Canada involving all types of debris (such as unsecured cargo, blown tires, etc.), and still

only represents 0.4% of the total number of vehicle crashes. (Forbes 68:20-69:7.) Most importantly,

Forbes admits that he has no evidence of even a single crash caused by the appliqué falling off or

the liftgate glass breaking while one of the vehicles is on the highway, let alone a single injury. (Id.

118:5-13.) This is true despite the fact that the more than 1.5 million vehicles at issue have been

driven more than 200 billion miles. (Harless & Hoffer Decl. ¶ 30(i).) Even innocuous products such

as toothpicks result in at least one death every year. See Corrosion Proof Fittings v. EPA, 947 F.2d

1201, 1223 n.23 (5th Cir. 1991) (“over the next 13 years, we can expect more than a dozen deaths


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from ingested toothpicks”). And yet in the 14 years these vehicles have been on the road, Plaintiffs

cannot cite so much as one minor injury caused by a detached appliqué. Forbes himself considers

the “incidence and severity” of VRRD to be “relatively low”—and that is based on all forms of

VRRD causing 25,000 crashes per year. (Forbes 95:17-20.) Without any evidence of even a single

crash caused by the appliqué after 200 billion miles on the road, there is insufficient evidence on

which the jury could reasonably find for Plaintiffs that the alleged defect poses an unreasonable

safety hazard.

Finally, Plaintiffs’ allegation that the liftgate opening inadvertently “creates an ejection

portal” through which “occupants could be thrown” is speculative and unfounded. (ECF 215, at 2.)

If an open window is a dangerous “ejection portal,” then all windows that roll down or otherwise

open are unreasonable safety defects. Moreover, the liftgate window is in the cargo area, not in a

passenger seating area. Not surprisingly, not a single injury due to an inadvertent glass opening

incident has been identified by Plaintiffs, much less an ejection. Federal Safety Standard 206

permits flip-up, tempered glass in the cargo area. (MacLean Decl. ¶ 37.) In sum, Plaintiffs cannot

establish that the cracked appliqué causes any unreasonable safety hazards. Accordingly, Ford had

no duty to disclose, and summary judgment should be granted.

2. Denning Cannot Prove That He Would Have Seen A Disclosure.

Denning’s CLRA claim fails for the additional reason that he cannot prove reliance, which is

an essential element of an omissions claim under the CLRA. See Daniel v. Ford Motor Co., 2013

U.S. Dist. LEXIS 80638, at *11 (E.D. Cal. June 7, 2013) (holding that reliance is required for

CLRA claim); Withers v. eHarmony, Inc., 2011 U.S. Dist. LEXIS 155543, at *6 (C.D. Cal. Mar. 4,

2011) (“[U]nder both the UCL and CLRA, a plaintiff must establish reliance as an essential element

for a claim.”). To prove reliance on an omission, Denning must “prove that, had the omitted

information been disclosed, [he] would have been aware of it and behaved differently.” Mirkin v.

Wasserman, 858 P.2d 568, 574 (Cal. 1993). Denning cannot meet this requirement because prior to

purchasing his vehicle he did no research and did not see or review any materials from Ford, such as

the brochure, the owner’s manual, warranty guide, or scheduled maintenance guide, and the only

advertisement he recalls seeing was a newspaper advertisement from a local dealership. (Denning


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42:10-20; 47:10-16; 95:4-8; 118:7-17; 141:24-143:16.).

Courts have rejected CLRA claims on nearly identical facts. In Daniel, the plaintiffs brought

a putative class action alleging that certain Ford Focus vehicles contained a defect that led to

excessive tire wear. 2013 U.S. Dist. LEXIS 80638, at *3. The plaintiffs asserted various claims,

including a claim under the CLRA on the basis that Ford should have disclosed the alleged defect.

Id. at *4. The court granted summary judgment for Ford on the CLRA claim because there was “no

evidence that plaintiffs researched the maintenance history of Ford Focuses, read the warranty or

maintenance booklets before buying their vehicles, or otherwise saw Ford materials which could

have plausibly contained any disclosure had it been made.” Id. at *17; see also Withers, 2011 U.S.

Dist. LEXIS 155543, at *8 (granting summary judgment for defendant because “Plaintiff admits he

did not read the terms of service” and thus “cannot establish that had the information been included

he would have been aware of it and behaved differently”). The same is true here, and thus summary

judgment should be granted on Denning’s CLRA claim for this reason as well.

3. Morelli Does Not Have Standing Under The CLRA.

“To bring a claim under the CLRA, a plaintiff must be a ‘consumer.’” Zepeda v. PayPal,

Inc., 777 F. Supp. 2d 1215, 1222 (N.D. Cal. 2011) (citing Cal. Civ. Code § 1780(a).) “Consumer” is

defined as “an individual who seeks or acquires, by purchase or lease, any goods or services for

personal, family, or household purposes.” Cal. Civ. Code § 1761(d) (emphasis added). The statute

further defines “goods” as “tangible chattels bought or leased for use primarily for personal, family,

or household purposes.” Cal. Civ. Code § 1761(a) (emphasis added). A plaintiff who purchases

products or services for business purposes does not have standing under the CLRA. See Ewert v.

eBay, Inc., 2010 U.S. Dist. LEXIS 108838, at *26 (Sept. 30, 2010); Mazur v. eBay, Inc., 257 F.R.D.

563, 568 (N.D. Cal. 2009); In re Ford Motor Co. E-350 Van Prods. Liab. Litig., 2010 U.S. Dist.

LEXIS 68241, at *38 (D.N.J. July 9, 2010) (applying California law); Person v. Google, Inc., 2007

U.S. Dist. LEXIS 22499, at *22 (Mar. 16, 2007).

Morelli does not have standing to assert a CLRA claim because he uses his 2003 Explorer in

his property management and real estate brokerage businesses, which he has operated continuously

throughout the entire time he has owned his vehicle. (Morelli 20:25-21:6; 28:11-16.) On his taxes,


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Morelli depreciates the vehicle as a business expense, and takes a deduction for all mileage related

to business trips. (Morelli 28:17-32:11). The fact that Morelli also uses his vehicle for some

personal, family, or household purposes does not save his claim since the CLRA only applies where

the goods are used primarily for such purposes. Cal. Civ. Code 1761(a). Thus, Ford is entitled to

summary judgment on Morelli’s claim for this additional reason.

D. Summary Judgment Should Be Granted For Ford On Plaintiffs’ UCL Claims

The Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, “prohibits business acts or

practices that are (1) fraudulent, (2) unfair, or (3) unlawful.” Smith, 749 F. Supp. 2d at 996. The

only monetary remedy available under the UCL is equitable restitution. Korea Supply Co. v.

Lockheed Martin Corp., 29 Cal.4th 1134, 1146 (2003). Summary judgment should be granted for

Ford on all three California Plaintiffs’ UCL claims because Plaintiffs cannot prove that Ford

committed any fraudulent, unfair, or unlawful acts. Moreover, Denning and Nettleton cannot

establish reliance.

1. There Is No Evidence Of Any Fraudulent, Unfair Or Unlawful Practices.

Plaintiffs’ fraudulent conduct claims under the UCL fail for the same reason that their

CLRA claims fail: Ford had no duty to disclose the alleged defect. See Smith, 749 F. Supp. 2d at

996 (“We cannot agree that a failure to disclose a fact one has no affirmative duty to disclose is

likely to deceive anyone within the meaning of the UCL.”) Similarly, Plaintiffs cannot establish any

“unfair” conduct by Ford because the “‘failure to disclose a defect that might, or might not, shorten

the effective life span of an automobile part that functions precisely as warranted throughout the

term of its express warranty cannot be characterized as causing a substantial injury to consumers,

and accordingly does not constitute an unfair practice under the UCL.’” See Smith, 749 F. Supp. 2d

at 997 (citing Daugherty, 144 Cal. App. 4th at 839.)

Plaintiffs also cannot establish a violation of the “unlawful” prong of the UCL. The unlawful

prong “is derivative of other California laws” and thus requires a plaintiff to plead and prove a

viable predicate act. Smith, 462 Fed. App’x at 665. Plaintiffs’ premise this portion of their UCL

claim on alleged violations of the CLRA, the Magnuson-Moss Warranty Act (“MMWA”), and

breach of express warranty. (TCAC ¶ 337.) The Court already has dismissed with prejudice


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Plaintiffs’ MMWA and express warranty claims, as well as Nettleton’s CLRA claim, and for the

reasons discussed above, Denning and Morelli cannot establish a claim under the CLRA. In the

absence of any viable predicate act, Plaintiffs cannot prove a violation of the unlawful prong of the

UCL. Smith, 462 Fed. App’x at 665 (holding that because “plaintiffs failed to carry their burden as

to any of these claims . . . there was no violation under the unlawful prong of the UCL”); Avedisian,

43 F. Supp. 3d at 1079 (granting summary judgment as to other claims and holding that “there is no

predicate act involving a violation of some other statute upon which Plaintiff can base her UCL

claim”).

2. Denning And Nettleton Cannot Prove Reliance.

Like the CLRA, the UCL requires proof of actual reliance. Daniel, 2013 U.S. Dist. LEXIS

80638, at *11 (reliance is required for both UCL and CLRA claims); Withers, 2011 U.S. Dist.

LEXIS 155543, at *6 (“[U]nder both the UCL and CLRA, a plaintiff must establish reliance as an

essential element for a claim.”). As discussed above with respect to his CLRA claim, Denning

cannot prove reliance because he did not do any research and did not see or review any materials

from Ford prior to purchasing his vehicle. Supra § I(C)(2). Similarly, Nettleton testified that she did

not do any research or review any materials from Ford prior to purchasing her vehicle. (Nettleton

54:14-55:21.) Thus, neither Denning nor Nettleton can establish that had the information been

disclosed by Ford they “would have been aware of it and behaved differently.” Daniel. 2013 U.S.

Dist. LEXIS 80638, at *17. Accordingly, their UCL claims fail for this additional reason. Id. at *19

(granting summary judgment on UCL and CLRA claims); Withers, 2011 U.S. Dist. LEXIS 155543,

at *10 (same).

E. Summary Judgment Should Be Granted On Plaintiffs’ Claims For RestitutionUnder The UCL.

In Korea Supply, the California Supreme Court held that “restitution is the only monetary

remedy expressly authorized by [the UCL].” 29 Cal.4th at 1146. The court held that relief requested

by the plaintiff in that case did not constitute restitution because “it would not replace any money or

property that the defendants took directly from plaintiff” and “cannot be traced to any particular

funds in [the defendant’s] possession.” Id. at 1149, 1150. Summary judgment should be granted


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where the plaintiff fails to produce substantial evidence of “‘money or property identified as

belonging in good conscience to the plaintiff [that] could clearly be traced to particular funds or

property in the defendant’s possession.’” Colgan v. Leatherman Tool Group, Inc., 135 Cal. App. 4th

663, 699 (2006) (citation omitted); see also Groupion, LLC v. Groupon, Inc., 859 F. Supp. 2d 1067,

1083 (N.D. Cal. 2012) (granting summary judgment because there was no evidence that defendant

“obtained money from [plaintiff]”).

Plaintiffs cannot obtain restitution here because they purchased their vehicles from

independently owned dealerships and thus the money they paid for their vehicles went to the

dealerships, not Ford. Moreover, it is Plaintiffs’ burden to trace the money from their vehicle

purchases to Ford, and Plaintiffs have not, and cannot, come forth with any evidence to show that

their money was ever in Ford’s possession. Accordingly, summary judgment should be granted on

Plaintiffs’ restitution claim under the UCL. See, e.g., Ford Motor Co. E-350 Van, 2010 U.S. Dist.

LEXIS 68241, at *47-49 (granting summary judgment on UCL claim because plaintiff did not

produce any evidence showing that the funds it paid to a dealership could be traced to Ford).

II. SUMMARY JUDGMENT SHOULD BE GRANTED FOR FORD ON WARE’S ANDMARTIN’S CLAIMS UNDER THE NEW JERSEY CONSUMER FRAUD ACT

A. Facts Relating To The New Jersey Plaintiffs

In July 2007, Spencer Ware purchased a used 2004 Explorer with over 32,000 miles on it.

(Ware 31:24-32:2, 37:2-8.) He did not do any research before purchasing the vehicle, did not look at

a brochure, and does not recall any specific advertising. (Id. 43:12-25, 46:12-47:9.) The appliqué

cracked on Ware’s vehicle in January 2011, when the vehicle was seven years old and well past any

applicable warranty coverage. (Id. 76:21-23.) Ware has not had the appliqué repaired on his now

11-year old vehicle. (Id. 77:14-18.) In May 2013, the rear window came out—but did not break—

when Ware was closing the liftgate and one of the hinges broke. (Id. 95:9-20, 97:2-6.) Ware

replaced the hinges himself with parts he purchased through e-Bay. (Id. 97:7—98:11.) Ware plans

to drive his 2004 Explorer until it is so old it that has no value. (Id. 94:4-14.)

Brian Martin purchased a new 2002 Mercury Mountaineer on August 26, 2003. (Martin

42:13-22.) Unlike Ware, Martin researched reliability and safety information for the Ford Explorer


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and Mercury Mountaineer on the Internet, including Consumer Report and Edmunds, prior to

purchase. (Id. 48:19-49:16, 53:18-54:7.) He found negative comments about reliability, but he was

not concerned because “with the Internet, you always find something negative.” (Id. 50:2-15.) In the

complaint, Martin alleges that the appliqué cracked in early 2008 (TCAC ¶ 211), while in his

deposition he testified that it may actually have been sometime in the winter of 2006. (Martin

127:21-128:2.) In October 2012, his Mountaineer was flooded by Hurricane Sandy, and his insurer,

Progressive, declared the vehicle a total loss because the axle had been submerged in saltwater for

too long. (Id. 189:19-191:14, 194:16-195:11.) However, Martin wanted to keep the vehicle, so

Progressive paid him $5,270.03, which represented the market value of the vehicle minus the

salvage value. (Id. 195:18-198:1; Tew Decl. Ex. 20.) Martin considers the Mountaineer the “family

vehicle” because he and his wife transport their two young children in it, and while he claims to be

concerned that the cracked appliqué is a safety hazard, he has not had it repaired and has no plans to

have it repaired in the future. (Martin 19-22, 147:12-15.) Even if Ford agreed to repair it now at no

cost, or if he got the cash value of the repair from this lawsuit, he would not have the repair done

because “the crack does not concern [him] that much.” (Id. 217:12-218:9.) Despite having a cracked

appliqué since 2006 or 2008, and despite the fact the vehicle was totaled in a hurricane, the liftgate

glass has never shattered, nor has the appliqué fallen off. (Id. 107:8-10.)

B. Ford Had No Duty To Disclose The Alleged Defect.

New Jersey, like California, does not require a manufacturer to disclose all problems that

may occur during the life of a product because to hold otherwise would effectively eliminate term

limits on warranties. The seminal case in New Jersey is Thiedemann v. Mercedes-Benz USA, LLC,

872 A.2d 783, 786 (N.J. 2005), in which the plaintiffs brought a putative class action and asserted

CFA claims based on the defendant’s failure to disclose that certain vehicles contained defective

fuel sending units. The defendant admitted that it knew of more than 43,000 fuel sending failures in

the putative class vehicles during a three-year period, and for each of the named plaintiffs, the

defect had manifested during the warranty period multiple times. Id. at 786-87. However, each time

the defect manifested, the defendant covered the repairs at no cost to the plaintiffs because their

vehicles were within the terms of the warranty. Id. The court affirmed summary judgment for the


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defendant, noting that “the warranty provided as part of the contract of sale or lease is part of the

benefit of the bargain between the parties” and thus defects “that arise and are addressed by

warranty, at no cost to the consumer, do not provide the predicate ‘loss’ that the CFA expressly

requires for a private claim under the CFA.” Id. at 794.

In Perkins v. DaimlerChrysler Corp., 890 A.2d 997 (N.J. App. 2006), the court logically

extended the holding in Thiedemann to defects occurring outside of the warranty period. In that

case, the plaintiff alleged that the defendant violated the CFA because it failed to disclose that the

exhaust manifold on certain vehicles was susceptible to cracking and unlikely to last as long as the

“industry lifetime standard for such a part.” 890 A.2d at 999. The court rejected the plaintiff’s

claim, holding that “recognizing a viable CFA claim in the circumstances presented would

essentially compel manufacturers and sellers to warrant their products and component parts beyond

that to which the parties expressly agreed.” Id. at 1005. The court held that accepting plaintiff’s

theory “would be tantamount to rewriting that part of the contract which defined the length and

scope of the warranty period. We decline to interpret the CFA to permit a claim which has that

effect.” Id. Courts have since applied Perkins in numerous cases, including multiple cases involving

automobiles.8

The result of Thiedemann, Perkins, and their progeny is that it is not sufficient for a plaintiff

to show “that the defendant manufacturer knew that a part might fail.” Alban v. BMW of N. Am.,

LLC, 2010 U.S. Dist. LEXIS 94038, at *32 (D.N.J. Sept. 8, 2010). Rather, to prove a violation of

the CFA, New Jersey law requires the plaintiff to prove that (1) all, or substantially all, of the

particular product line has the same defect, (2) the manufacturer knew that the defect was certain to

manifest, and (3) the manufacturer limited the warranty in an effort to avoid the cost of repairs.

Alban, 2010 U.S. Dist. LEXIS 94038, at *36; see also Glass, 2011 U.S. Dist. LEXIS 149199, at

*26; Glauberzon v. Pella Corp., 2011 U.S. Dist. LEXIS 38138, at *28-29 (D.N.J. Apr. 5, 2011);

Tatum, 2011 U.S. Dist. LEXIS 32362, at *16. “The allegation of certainty is key, because a

8 See, e.g., Glass v. BMW of N. Am., LLC, 2011 U.S. Dist. LEXIS 149199, at *31 (D.N.J. Dec. 29,2011); Tatum v. Chrysler Group, LLC, 2011 U.S. Dist. LEXIS 32362, at *16 (D.N.J. Mar. 28,2011); Nobile v. Ford Motor Co., 2011 U.S. Dist. LEXIS 26766, at *15-*16 (D.N.J. Mar. 14,2011); Noble v. Porsche Cars N. Am., Inc., 694 F. Supp. 2d 333, 337 (D.N.J. 2010); Duffy v.Samsung Elecs. Am., Inc., 2007 U.S. Dist. LEXIS 14792, at *22-23 (D.N.J. Mar. 2, 2007).


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defendant ‘does not violate the NJCFA by failing to inform its consumers of the possibility of

failure’ of one of a product’s component parts.” Skeen v. BMW of N. Am., LLC, 2014 U.S. Dist.

LEXIS 9256, at *26 (D.N.J. Jan. 24, 2014); Suddreth v. Mercedes-Benz, LLC, 2011 U.S. Dist.

LEXIS 126237, at *15 (D.N.J. Oct. 31, 2011). To hold otherwise “would effectively remove the

scienter element of the NJCFA, which requires that the plaintiff demonstrate an intent to deceive on

the part of the defendant manufacturer.” Alban, 2010 U.S. Dist. LEXIS 94038, at *33.

Moreover, the manufacturer’s knowledge must be measured at the time of sale, and cannot

be based on what the manufacturer may later learn. Id. at *36 (plaintiff must show that

manufacturer knew of the defect “before the time he purchased his vehicle”). Finally, the plaintiff

must prove that the manufacturer’s failure to disclose the alleged defect and limitation of the

warranty was motivated by an effort to avoid the cost of repairs and maximize profits. See Skeen,

2014 U.S. Dist. LEXIS 9256, at *25; Alban, 2010 U.S. Dist. LEXIS 94038, at *35; Glauberzon,

2011 U.S. Dist. LEXIS 38138, at *28-29; Maniscalco v. Brother Intern. Corp., 627 F. Supp. 2d 494,

502 (D.N.J. 2009).

Plaintiffs cannot establish any of these elements. The evidence is uncontroverted that Ford

did not know that all, or substantially all, of the subject vehicles had a common defect and that this

defect was certain to manifest. To the contrary, the evidence shows that it was very unlikely that the

problem would manifest in the vehicles with ABS appliqués and even less likely that it would occur

after the change to Xenoy for the appliqué material. Martin’s 2002 vehicle had an ABS appliqué,

and by August 2003 when he purchased it, the engineering team that was working on the issue

projected the failure rate would only be 1.4%. (Tew Decl. Ex. 21.) Ware’s 2004 vehicle had a

Xenoy appliqué, which Ford had specifically implemented to fix the problem that was affecting a

small number of vehicles with ABS. Indeed, the switch to Xenoy proved effective in significantly

lowering the already low incident rate. (Halonen 91:24-92:21; Watson 200:5-19; Tew Decl. Ex. 22.)

Notably, Martin’s brother also owned a putative class vehicle—either a 2002 or 2003

Mountaineer—and yet the appliqué never cracked before he disposed of it in 2013. (Martin

184:10—185:3.) At most, Ford knew that the appliqué might crack on a small percentage of

vehicles, but most likely would not on the vast majority of vehicles. Such knowledge does not give


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rise to a duty to disclose under the CFA.

In addition, there is no evidence that Ford ever limited the warranty in an effort to avoid the

cost of repairs. See Skeen, 2014 U.S. Dist. LEXIS 9256, at *25; Alban, 2010 U.S. Dist. LEXIS

94038, at *35; Glauberzon, 2011 U.S. Dist. LEXIS 38138, at *28-29; Maniscalco, 627 F. Supp. 2d

at 502. Ford routinely covered repairs for a cracked appliqué when the crack occurred during the

warranty period. And as discussed above, all of the TSBs Ford issued instructed dealers that the

repair was eligible under the terms of the new vehicle warranty. The evidence conclusively rebuts

that Ford attempted to avoid repairs in an effort to maximize profits. Indeed, Ford instituted a

Quicker Service Fix that instructed dealers to replace the entire liftgate glass assembly despite the

high cost of the repair to Ford. (Bissi 64:1-7.) Ford continued to pay for this repair until June 2003,

when it developed a repair procedure, which also was covered under warranty, that did not require

replacing the entire assembly. (Tew Decl. Ex. 23.) In sum, the undisputed evidence shows that Ford

never knew with certainty that the applique would crack on all, or substantially all, of the subject

vehicles, and Ford never limited the warranty in an effort to avoid the cost of repairs. Thus, Ford

had no duty to disclose.

Plaintiffs’ safety allegations do not save their CFA claims because a safety defect does not

give rise to a duty to disclose under New Jersey law. Nobile, 2011 U.S. Dist. LEXIS 26766, at *16-

17 (“[I]t is of no moment that Plaintiffs allege that Defendant concealed defects and allege safety

concerns.”); see also Noble, 694 F. Supp. 2d at 338; see also Glass, 2011 U.S. Dist. LEXIS 149199,

at *38 (same); Duffy, 2007 U.S. Dist. LEXIS, at *21-22 (same). In any event, Ware and Martin have

driven their families in their vehicles for years without having the appliqué repaired, and have

experienced no safety problem. And if they are basing their CFA claims on the allegation that the

alleged defect can cause personal injury, their claims would be barred by the New Jersey Product

Liability Act, N.J. Stat. Ann. 2A:58C-1. The New Jersey Supreme Court has held that “[t]he

language chosen by the Legislature in enacting the PLA is both expansive and inclusive,

encompassing virtually all possible causes of action relating to harms caused by consumer and other

products.” In re Lead Paint Litigation, 924 A.2d 484, 503 (N.J. 2007). In Sinclair v. Merck & Co.,

Inc., 948 A.2d 587, 595 (N.J. 2008), which is controlling on this issue of state law, the New Jersey


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Supreme Court rejected the plaintiffs’ attempt “to avoid the requirements of the PLA by asserting

their claims as CFA claims.” The court held that “[t]he heart of plaintiffs’ case is the potential for

harm caused by Merck’s drug. It is obviously a product liability claim. Plaintiffs’ CFA claim does

not fall within an exception to the PLA, but rather clearly falls within its scope.” Id. at 596

(emphasis added); see also Nafar v. Hollywood Tanning Sys., Inc., 2010 U.S. Dist. LEXIS 65183, at

*30-32 (D.N.J. June 30, 2010) (same); Crouch v. Johnson & Johnson Consumer Cos., 2010 U.S.

Dist. LEXIS 37517, at *18-19 (D.N.J. Apr. 15, 2010) (same).

The same is true here. Plaintiffs do not allege that they have sustained any personal injuries

and disclaim any personal injury damages, but specifically premise their CFA claims on the “safety

risks of broken glass and the Applique detaching.” (ECF 215, at 35.) Because the “potential for

harm” supposedly presented by the cracked appliqué is the “heart of plaintiffs’ case,” their CFA

claims are precluded by the PLA. Sinclair, 948 A.2d at 596.

C. Plaintiffs’ Claims Fail Because The Undisclosed Information Was Not Material.

Summary judgment also should be granted on Plaintiffs’ CFA claims because there is no

evidence that Ford failed to disclose a material fact, which is required under the CFA. N.J. Stat.

Ann. § 56:8-2. Plaintiffs’ claims are premised on the assertion that a disclosure that the appliqué

may crack (but most likely would not) after the vehicles had been driven for many years and tens of

thousands of miles would be material to a reasonable consumer and would have altered their

purchasing decisions. This is a flawed premise that would render fraudulent every sale of consumer

products in New Jersey. Ford, like most manufacturers, is constantly receiving warranty claims and

other reports of issues with their products. If manufacturers were required to disclose every problem

they ever became aware of, no matter how unlikely it is that the problem will occur, consumers

would be deluged with troves of useless information. Ware and Martin acknowledged that they have

never received, nor have they asked for, such a disclosure when purchasing any vehicle or other

product. (Ware 50:13-18, 134:5-135:7; Martin 63:10-15.) Moreover, a reasonable consumer

understands that “[d]efects can, and do, arise with complex instrumentalities such as automobiles.”

Thiedemann, 872 A.2d at 794. Ware and Martin themselves understood this. (Ware 53:15-16, 63:9-

22; Martin 84:22-85:15, 94:3-95:3.) Thus, Plaintiffs cannot prove materiality as a matter of law.


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III. SUMMARY JUDGMENT SHOULD BE GRANTED ON DERY’S CLAIM UNDERTHE FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT.

A. Facts Relating to Plaintiff Zane Dery

Plaintiff Zane Dery purchased a used 2005 Lincoln Aviator on May 24, 2008. (Dery 99:7-

14.) At the time he purchased his 2005 Aviator, he also owned a 2003 Aviator. (Id. 32:20-33:6;

53:6-9).9 Prior to purchasing the 2005 Aviator, his 2003 Aviator had developed a cracked appliqué,

which he had repaired at his own expense. (Id. 22:13-15, 36:1-3, 146:23-147:1.) Nevertheless, “he

wasn’t particularly on the lookout” for this issue when considering the purchase of the 2005

Aviator. (Id. 107:21-108:2). The appliqué cracked on Dery’s 2005 Aviator sometime in 2011, when

the vehicle was six years old and past any applicable warranty coverages. (Id. 107:12-20). Despite

never having the appliqué repaired. (Id.) Despite not having the appliqué repaired, the liftgate glass

has never shattered or come loose, nor has the appliqué fallen off. (Id. 108:23-109:19-23, 120:23-

121:1.) Dery’s overall experience with his vehicle has been “above average,” and he has no plans to

get rid of it. (Id. 120:3-6.)

B. Summary Judgment Should Be Granted On Dery’s FDUTPA Claim BecauseHe Had Knowledge Of The Alleged Defect Before Purchasing His Vehicle.

A claim for damages under the Florida Deceptive and Unfair Trade Practices Act §§

501.201-213, et seq. (“FDUTPA”) requires proof that the deceptive act caused actual damages. Kia

Motors Am. Corp. v. Butler, 985 So. 2d 1133, 1140 (Fla. Dist. Ct. App. 2008). The undisputed

evidence shows that Dery cannot prove causation because he had knowledge of the alleged defect

before he purchased his 2005 Aviator. See Porsche Cars N. Am., Inc. v. Diamond, 140 So. 3d 1090,

1098 (Fla. App. 2014) (whether plaintiff has knowledge of the undisclosed information “bears on

whether the practice was unfair [under FDUTPA] because it impacts whether the consumer could

reasonably avoid the risk”); Kia Motors, 985 So. 2d at 1140 (same).

In Porsche, the plaintiffs brought a putative class action and alleged that their headlights,

which were mounted on modules that allegedly made them cheaper to install and repair, were more

9 The Court already has held that Dery’s claims against Ford relating to his 2003 Lincoln Aviatorwere barred by the statute of limitations, and thus his claims are limited to his 2005 Aviator. (ECF162.)


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susceptible to theft. Among other things, the plaintiffs alleged that Porsche failed to “notify owners

of the flaw and potential risk of theft so they could take their own precautions.” 140 So.2d at 1094.

The Florida Court of Appeals held that “an individual class member’s knowledge of the risk of theft

goes to the heart of his or her [FDUTPA] claim” because “to prove an unfair trade practice, the

class must prove that the injury caused by the allegedly unfair trade practice could not have been

reasonably avoided by the consumers.” Id. at 1098. Other Florida courts have reached the same

conclusion with respect to the FDUTPA’s causation requirement. See Pop's Pancakes, Inc. v.

NuCO2, Inc., 251 F.R.D. 677, 685 (S.D. Fla. 2008); Egwuatu v. South Lubes, Inc., 976 So. 2d 50,

53-54 (Fla. Dist. Ct. App. 2008). Similarly, in this case Dery had specific knowledge before

purchasing his 2005 Aviator that Aviators could develop a cracked applique based on his

experience with his 2003 Aviator. Any claim that he would not have purchased the 2005 Aviator

had Ford disclosed what he already knew is illogical. Based on Dery’s pre-purchase knowledge, he

cannot prove causation and his FDUTPA claim fails.10

C. Dery Cannot Prove That He Sustained Actual Damages Under FDUTPA.

Summary judgment also should be granted for Ford because Dery cannot prove that he

sustained “actual damages,” which is an essential element of a claim under FDUTPA. Kia Motors,

985 So. 2d at 1140. The term “actual damages” is narrowly construed and does not authorize

recovery of consequential damages “such as repair damages or resale damages.” Kia Motors, 985

So. 2d at 1140; see also In re Ford Motor Co. E-350, 2010 U.S. Dist. LEXIS 68241, at *147-148

(applying FDUTPA). Further, a plaintiff is not entitled to restitution or disgorgement of profits

under the Act because the “statute [does not] expressly authorize such monetary equitable relief.”

FTC v. Mylan Labs., Inc., 62 F. Supp. 2d 25, 46 (D.D.C. 1999) (interpreting Florida law). Thus, the

only damages available under FDUTPA are for “the difference in the market value of the product or

10 Under the FDUTPA, only the omission of “material” facts are actionable. See Matthews v. Am.Honda Motor Co., 2012 U.S. Dist. LEXIS 90802 (S.D. Fla. June 6, 2012). For the same reasonsdiscussed above with respect to the New Jersey Plaintiffs, Dery cannot prove that the failure todisclose the slight possibility that the appliqué could crack would be material to a reasonableconsumer. Indeed, Dery’s decision to purchase another Aviator despite his experience with his 2003Aviator shows that the information was not important to him, and his actions are consistent withwhat one would expect of a reasonable consumer. Thus, for this additional reason, summaryjudgment should be granted for Ford.


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service in the condition in which it was delivered and its market value in the condition in which it

should have been delivered according to the contract of the parties.” Rollins, Inc. v. Butland, 951

So. 2d 860, 869 (Fla. Dist. Ct. App. 2006).

Here, Dery cannot prove any difference in market value. All vehicles of every make and

model have the potential to develop defects, and thus the market value of all vehicles—including

2005 Lincoln Aviators—already reflect the potential for defects to occur. Indeed, Ford’s expert

economists have examined market values for 2005 Lincoln Aviators and found no abnormal

depreciation rates in these vehicles when compared to their peers. (Harless & Hoffer Decl. ¶ 23.)

Their analysis confirms that the market has not devalued these vehicles simply because some of

them have developed, or may in the future develop, a cracked appliqué. The fact that the appliqué

cracked on Dery’s vehicle subsequent to purchase does not mean he received something less than

what he bargained for. It is simply an unrealized repair cost, which is not recoverable under

FDUTPA. Kia Motors, 985 So. 2d at 1140. Even Dery acknowledges that if he had the appliqué

repaired, there would be no diminution in the value of his vehicle. (Dery 110:9-11.) Accordingly,

summary judgment should be granted for Ford because the undisputed evidence shows that Dery

has not sustained any “actual damages” under FDUTPA.

CONCLUSION

For the foregoing reasons, summary judgment should be granted for Ford on all of the

claims of the California, New Jersey, and Florida plaintiffs.

Dated: April 30, 2015 Respectfully submitted,

/s/ Amir Nassihi

Amir Nassihi (SBN: 235936)SHOOK, HARDY & BACON L.L.P.One Montgomery, Suite 2700San Francisco, California 94104Tel: (415) [email protected]

Counsel for Defendant Ford Motor Company


Documents

DC01-#411961-v1-Tailgate -- SJ Brief FINALfiles.courthousenews.com/2015/11/16/ford summary judgment motion.pdf · defendant ford motor company’s motion for summary judgment; case