DC01-#412199-v1-Tailgate -- Class Opp Brief from LCfiles.courthousenews.com/2015/11/16/ford class cert oppose.pdf · defendant ford motor company’s memorandum of points and authorities

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FORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; 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]

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

DEFENDANT FORD MOTORCOMPANY’S MEMORANDUM OFPOINTS AND AUTHORITIES INOPPOSITION TO PLAINTIFFS’ MOTIONFOR CLASS CERTIFICATION

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

Case 3:11-cv-02953-RS Document 223 Filed 04/30/15 Page 1 of 67

mailto:[email protected]

mailto:[email protected]

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iiFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS

TABLE OF CONTENTS

Page

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

INDEX OF ATTACHMENTS AND ABBREVIATIONS ................................................................ xi

I. INTRODUCTION ................................................................................................................... 1

II. RELEVANT PROCEDURAL HISTORY .............................................................................. 2

III. FACTS..................................................................................................................................... 3

A. The Design Of The Liftgate Glass Assembly.............................................................. 3

B. Ford Investigated Reports Of Cracked Appliqués....................................................... 5

C. Ford Changed The Appliqué Material From ABS To Xenoy, Which WasEffective In Reducing The Already Low Incident Rate. ............................................. 6

D. Ford’s Investigation Did Not Reveal Any Safety Issues Caused By TheCracked Appliqué. ....................................................................................................... 8

E. Plaintiffs’ Claims and The Proposed State Classes ................................................... 10

IV. LEGAL STANDARD ........................................................................................................... 11

V. CERTIFICATION OF THE CALIFORNIA CLASS SHOULD BE DENIEDBECAUSE INDIVIDUAL ISSUES PREDOMINATE. ....................................................... 12

A. Facts Relating To The California Plaintiffs............................................................... 12

1. Sally Nettleton ............................................................................................... 12

2. James Denning............................................................................................... 13

3. Al Morelli ...................................................................................................... 14

B. Individual Issues Predominate On The CLRA And UCL Claims............................. 15

1. Materiality Is Not A Common Issue.............................................................. 16

2. Causation And Reliance Are Not Common Issues........................................ 22

3. Knowledge Is Not A Common Issue. ............................................................ 24

4. The Statute Of Limitations Is Not A Common Issue. ................................... 25

5. Whether Each Class Member Is A “Consumer” For Purposes Of TheCLRA Is Not A Common Question............................................................... 27

6. Restitution Damages Under The UCL And CLRA Cannot BeDetermined With Common Evidence............................................................ 28


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iiiFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS

C. Plaintiffs Have Failed To Establish Commonality Or Predominance For TheirSecret Warranty Claim. ............................................................................................. 32

VI. CERTIFICATION OF THE FLORIDA CLASS SHOULD BE DENIED FOR LACKOF COMMONALITY AND PREDOMINANCE ................................................................ 34

A. Facts Relating To Florida Plaintiff Zane Dery .......................................................... 34

B. Plaintiff’s FDUTPA Claim Fails To Meet The Commonality OrPredominance Requirements. .................................................................................... 34

1. Causation Is Not A Common Issue ............................................................... 34

a. Whether Class Members Had Pre-Purchase Knowledge of TheAlleged Defect Is Not A Common Issue. .......................................... 35

b. Whether The Appliqué Has Cracked And Why Are NotCommon Issues.................................................................................. 36

c. Whether Class Members Would Have Seen Or Heard ADisclosure Is Not A Common Question. ........................................... 37


3. The Statute Of Limitations Is Not A Common Issue. ................................... 38

4. Damages Is Not A Common Issue................................................................. 38

VII. CERTIFICATION OF THE NEW JERSEY CLASS SHOULD BE DENIED FORLACK OF COMMONALITY AND PREDOMINANCE. ................................................... 39

A. Facts Relating To The New Jersey Plaintiffs ............................................................ 39

1. Spencer Ware................................................................................................. 39

2. Brian Martin................................................................................................... 40

B. Individual Issues Predominate On Plaintiffs’ CFA Claim ........................................ 42

1. Whether The Defect Has Manifested Is Not A Common Issue..................... 42

2. Causation Is Not A Common Issue ............................................................... 43

a. The Allegedly Undisclosed Information Was Knowable.................. 44

b. Plaintiff Cannot Establish That All Class Members WouldHave Seen Any Additional Disclosure. ............................................. 45


4. The Statute Of Limitation Is Not A Common Issue ...................................... 46

5. Damages Is Not A Common Issue................................................................. 46

VIII. THE PROPOSED STATE CLASSES FAIL TO MEET THE SUPERIOTYREQUIREMENT UNDER RULE 23(b)(3) .......................................................................... 47


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ivFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS

IX. THE COURT SHOULD DENY CERTIFICATION UNDER RULE 23(b)(2). ................... 49

X. CONCLUSION...................................................................................................................... 50


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vFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS

TABLE OF AUTHORITIES

Page(s)

Federal Cases

Amchem Prod., Inc. v. Windsor,521 U.S. 591 (1997)................................................................................................................15, 33

Arabian v. Sony Elecs., Inc.,2007 U.S. Dist. LEXIS 12715 (S.D. Cal. Feb. 22, 2007).............................................................28

Breakstone v. Caterpillar, Inc.,2010 U.S. Dist. LEXIS 142220 (S.D. Fla. May 26, 2010) ...........................................................36

In re Bridgestone/Firestone, Inc.,288 F.3d 1012 (7th Cir. 2002) ......................................................................................................48

In re Bridgestone/Firestone Inc. Prods. Liab. Litig.,153 F. Supp. 2d 935 (S.D. Ind. 2001)...........................................................................................47

Bright v. Asset Acceptance, Inc.,292 F.R.D. 190 (D.N.J. 2013).......................................................................................................47

Carrera v. Bayer Corp.,727 F.3d 300 (3d Cir. 2013) .........................................................................................................45

Chamberlan v. Ford Motor Co.,314 F. Supp. 2d 953 (N.D. Cal. 2004)..........................................................................................48

Chamberlan v. Ford Motor Co.,402 F.3d 952. (9th Cir. 2005) .......................................................................................................22

Chin v. Chrysler Corp.,182 F.R.D. 448 (D.N.J. 1998).......................................................................................................42

Clemens v. DaimlerChrysler Corp.,534 F.3d 1017 (9th Cir. 2008) ......................................................................................................26

Comcast v. Behrend,133 S.Ct. 1426 (2013).................................................................................................11, 12, 32, 47

Cox House Moving, Inc. v. Ford Motor Co.,2006 U.S. Dist. LEXIS 55490 (D.S.C. Aug. 8, 2006)..................................................................47

Dewey v. Volkswagen AG,558 F. Supp. 2d 505 (D.N.J. 2008)...............................................................................................45

Edwards v. Ford Motor Co.,2015 U.S. App. LEXIS 3073 (9th Cir. Feb. 27, 2015) ...........................................................21, 22


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viFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS

Ewert v. eBay, Inc.,2010 U.S. Dist. LEXIS 108838 (Sept. 30, 2010) ...................................................................27, 28

Farrar & Farrar Dairy, Inc. v. Miller-St. Nazianz, Inc.,254 F.R.D. 68 (E.D.N.C. 2008) ....................................................................................................48

Fine v. ConAgra Foods, Inc.,2010 U.S. Dist. LEXIS 101830 (C.D. Cal. Aug. 26, 2010)....................................................20, 21

In re Ford Motor Co. E-350 Van Prods. Liab. Litig.,2010 U.S. Dist. LEXIS 68241 (D.N.J. July 9, 2010)..............................................................27, 28

In re Ford Motor Co. E-350 Van Prods. Liab. Litig.,2012 U.S. Dist. LEXIS 13887 (D.N.J. Feb. 6, 2012) .......................................................35, 36, 46

In re Ford Motor Co. Ignition Switch Prods. Liab. Litig.,174 F.R.D. 332 (D.N.J. 1997).......................................................................................................48

Gold v. Midland Credit Mgmt.,2014 U.S. Dist. LEXIS 142758 (N.D. Cal. Oct. 7, 2014) ............................................................50

Green v. Green Mt. Coffee Roasters, Inc.,279 F.R.D. 275 (D.N.J. 2011).......................................................................................................42

Hadjavi v. CVS Pharm., Inc.,2011 U.S. Dist. LEXIS 86341 (C.D. Cal. July 25, 2011).......................................................47, 49

Irwin v. Mascott,96 F. Supp. 2d 968 (N.D. Cal. 1999)............................................................................................49

Johnson v. Harley-Davidson Motor Co.,285 F.R.D. 573 (E.D. Cal. 2012) ............................................................................................47, 48

Keegan v. Am. Honda Motor Co.,284 F.R.D. 504 (C.D. Cal. 2012)..................................................................................................26

Laney v. Am. Std. Cos.,2010 U.S. Dist. LEXIS 100129 (D.N.J. Sept. 23, 2010) ..............................................................42

Lutzky v. Deutsche Bank Nat’l Trust Co.,2009 U.S. Dist. LEXIS 100062 (D.N.J. Oct. 27, 2009) ...............................................................46

Maloney v. Microsoft Corp.,2012 U.S. Dist. LEXIS 28676 (D.N.J. Mar. 5, 2012)...................................................................43

Marcus v. BMW of N. Am., LLC.,687 F.3d 583 (3d Cir. 2012) .............................................................................................43, 44, 46

Matthews v. Am. Honda Motor Co.,2012 U.S. Dist. LEXIS 90802 (S.D. Fla. June 6, 2012) ...............................................................37


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viiFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS

Mazza v. Am. Honda Motor Co.,666 F.3d 581 (9th Cir. 2012) ..................................................................................................12, 48

Montgomery v. New Piper Aircraft,209 F.R.D. 221 (S.D. Fla. 2001)........................................................................................... passim

O’Connor v. Boeing N. Am., Inc.,197 F.R.D. 404 (C.D. Cal. 2000)......................................................................................25, 26, 47

In re Optical Disk Drive Antitrust Litig.,303 F.R.D. 311 (N.D. Cal. 2014)................................................................................11, 12, 15, 29

Oscar v. BMW of N. Am., LLC,2012 U.S. Dist. LEXIS 84922 (S.D.N.Y. June 19, 2012) ............................................................46

Otto v. Abbott Labs., Inc.,2015 U.S. Dist. LEXIS 56121 (C.D. Cal. Jan. 28, 2015) .......................................................22, 23

Paul v. Intel Corp.,2010 U.S. Dist. LEXIS 144511 (D. Del. July 28, 2010) ..............................................................49

Payne v. FujiFilm U.S.A., Inc.,2010 U.S. Dist. LEXIS 52808 (D.N.J. May 28, 2010)...........................................................42, 43

Pop's Pancakes, Inc. v. NuCO2, Inc.,251 F.R.D. 677 (S.D. Fla. 2008)...................................................................................................36

In re Prempro Prods. Liab. Litig.,230 F.R.D. 555 (E.D. Ark. 2005) .................................................................................................49

Priebe v. Autoban, Ltd.,240 F.3d 584 (7th Cir. 2001) ........................................................................................................19

Quezada v. Loan Ctr. Of Cal., Inc.,2009 U.S. Dist. LEXIS 122537 (E.D. Cal. Dec. 17, 2009) ..........................................................25

Ries v. Ariz. Bevs. U.S. LLC.,287 F.R.D. 523 (N.D. Cal. 2012)..................................................................................................50

Ries v. Ariz. Bevs. USA LLC,2013 U.S. Dist. LEXIS 46013 (N.D. Cal. Mar. 28, 2013)......................................................29, 50

Sanchez v. Wal-Mart Stores, Inc.,2009 U.S. Dist. LEXIS 48428 (E.D. Cal. May 28, 2009) ............................................................20

Stemple v. QC Holdings, Inc.,2014 U.S. Dist. LEXIS 125313 (S.D. Cal. Sept. 5, 2014)............................................................49

In re Toyota Motor Corp. Unintended Acceleration Mktg.,2012 U.S. Dist. LEXIS 189744 (C.D. Cal. May 4, 2012) ............................................................37


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viiiFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS

Trew v. Volvo Cars of N. Am.,2006 U.S. Dist. LEXIS 4890 (E.D. Cal. Feb. 8, 2006.)..........................................................33, 34

Wal-Mart Stores, Inc. v. Dukes,131 S. Ct. 2541 (2011)............................................................................................................15, 50

Webb v. Carter’s, Inc.,272 F.R.D. 489 (C.D. Cal. 2011)............................................................................................16, 20

Yumul v. Smart Balance, Inc.,733 F. Supp.2d 1134 (C.D. Cal. July 30, 2010) ...........................................................................25

Zepeda v. PayPal, Inc.,777 F. Supp. 2d 1215 (N.D. Cal. 2011)........................................................................................27

State Cases

Caro v. Procter & Gamble Co.,18 Cal. App. 4th 644 (1993) .........................................................................................................16

Cohen v. DirectTV, Inc.,178 Cal. App. 4th 966 (2009) .......................................................................................................23

Colgan v. Leatherman Tool Group, Inc.,135 Cal. App. 4th 663 (2006) .................................................................................................28, 29

Collins v. DaimlerChrysler Corp.,894 So. 2d 988 (Fla. App. 2004) ..................................................................................................37

Debbs v. Chrysler Corp.,810 A.2d 137 (Pa. Super. Ct. 2002)..............................................................................................21

Egwuatu v. South Lubes, Inc.,976 So. 2d 50 (Fla. App. 2008) ....................................................................................................35

Fairbanks v. Farmers New World Life Ins. Co.,197 Cal. App. 4th 544 (2011) .................................................................................................16, 22

Green v. GMC,2003 N.J. Super. Unpub. LEXIS 13 (App. Div. July 10, 2003). ..................................................42

Hutson v. Rexall Sundown, Inc.,837 So. 2d 1090 (Fla. App. 2003) ................................................................................................35

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

Korea Supply Co. v. Lockheed Martin Corp.,29 Cal. 4th 1134 (2003) ................................................................................................................28


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ixFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS

Latman v. Costa Cruise Lines, N.V.,758 So. 2d 699 (Fla. Dist. Ct. App. 2000) ....................................................................................35

LiMandri v. Judkins,52 Cal. App. 4th 326 (1997) .........................................................................................................24

Mass. Mutual Life Ins. Co. v. Superior Court,97 Cal. App. 4th 1282 (2002) .................................................................................................21, 22

Miami Auto. Retail, Inc. v. Baldwin,97 So. 3d 846 (Fla. Dist. Ct. App. 2012) ......................................................................................35

Mirkin v. Wasserman,5 Cal. 4th 1082 (1993) ..................................................................................................................22

Nelson v. Pearson Ford Co.,186 Cal. App. 4th 983 (2010) .......................................................................................................22

Philip Morris USA Inc. v. Hines,883 So. 2d 292 (Fla. Dist. Ct. App. 2003) ..............................................................................35, 38

Porsche Cars N. Am., Inc. v. Diamond,140 So. 3d 1090 (Fla. Dist. Ct. App. 2014) ..................................................................................36

Rollins, Inc. v. Butland,951 So. 2d 860 (Fla. Dist. Ct. App. 2006) ........................................................................34, 35, 38

S. Motor Co. of Dade Cnty. v. Doktorczyk,957 So.2d 1215 (Fla. Dist. Ct. App. 2007) ...................................................................................38

Thiedemann v. Mercedes-Benz USA, LLC,872 A.2d 783 (N.J. 2005) .......................................................................................................16, 46

In re Tobacco II Cases,46 Cal. 4th 298 (2009) ..................................................................................................................23

Tucker v. Pacific Bell Mobile Srvs.,208 Cal. App. 4th 201 (2012) ...........................................................................................16, 22, 23

In re Vioxx Class Cases,180 Cal. App. 4th 116 (2009) .................................................................................................16, 22

Federal Statutes

49 U.S.C. § 30118(b)..........................................................................................................................48

State Statutes

Cal. Bus. & Prof. Code § 17208 .........................................................................................................25

Cal. Civ. Code § 1761.........................................................................................................................27


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xFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS

Cal. Civ. Code § 1783.........................................................................................................................25

Cal. Civ. Code § 1795.2......................................................................................................................33

Fla. Stat. 95.11(d)(f) ...........................................................................................................................38

N.J. Stat. Ann. § 56:8-2 ......................................................................................................................45

Rules

Rule 23(a) .........................................................................................................................11, 12, 15, 21

Rule 23(b) ................................................................................................................................... passim


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INDEX OF ATTACHMENTS AND ABBREVIATIONS

ATTACHMENT ABBREVIATION

Declaration of Eric C. Tew in Support ofDefendant Ford Motor Company’sOpposition to Plaintiffs’ Motion for ClassCertification

Tew Decl.

Exhibit 1: Deposition of William Curtiss(Aug. 7, 2014)

Curtiss

Exhibit 2: Deposition of Aaron Halonen(Nov. 22, 2013)

Halonen

Exhibit 3: Annotated Photographs of a 2002Ford Explorer

Tew Decl. Ex. 3

Exhibit 4: Deposition of Shawn Walters(Nov. 5, 2014)

S. Walters

Exhibit 5: Deposition of David Walters(Oct. 24, 2014)

D. Walters

Exhibit 6: Design Verification Plan andReport (NTL1 072293-302)

Tew Decl. Ex. 6

Exhibit 7: Deposition of Joseph Watson(Oct. 3, 2014)

Watson

Exhibit 8: 2002 Explorer 4-Door Top 25Opportunities to Improve CustomerSatisfaction (NTL 0000106-08)

Tew Decl. Ex. 8

Exhibit 9: Dura Automotive Systems 8DReport - #01-99A (NTL 0000338-342)

Tew Decl. Ex. 9

Exhibit 10: E-mail dated March 12, 2002(NTL 0002476)

Tew Decl. Ex. 10


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xiiFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS


Exhibit 11: Deposition of Phil Evenhouse(Sep. 15, 2014)

Evenhouse

Exhibit 12: E-mail dated March 15, 2002(NTL 0001846-50)

Tew Decl. Ex. 12

Exhibit 13: U152 – Lift Gate AppliquéCracking – Six Sigma Project 8000 (NTL0000022-23)

Tew Decl. Ex. 13

Exhibit 14: Deposition of Brian Bauer (Aug.26, 2014)

Bauer

Exhibit 15: Design Verification Plan andReport (NTL 000630-33)

Tew Dec. Ex. 15

Exhibit 16: Design Verification Plan andReport (NTL 0001351-54)

Tew Decl. Ex. 16

Exhibit 17: 6 Panel (NTL 0010520-23) Tew Decl. Ex. 17

Exhibit 18: Deposition of Thomas Herline(Sep. 6, 2013)

Herline

Exhibit 19: E-mail dated July 30, 2003 (NTL0005788)

Tew Decl. Ex. 19

Exhibit 20: TSB 02-56-6 (NTL1 072275-78) Tew Decl. Ex. 20

Exhibit 21: Deposition of Gerald Bissi(Aug. 1, 2014)

Bissi

Exhibit 22: Quarterback Review Mechanismsdated June 3, 2003 (NTL 0002763-67)

Tew Decl. Ex. 22



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xiiiFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS


Exhibit 24: Design Verification Plan andReport (NTL 0005892)

Tew Decl. Ex. 24




Exhibit 28: Quarterback Review Mechanismsdated August 5, 2003 (NTL 0009284, NTL0009290-91)

Tew Decl. Ex. 28

Exhibit 29: Deposition of Vladimir Beltran(Sep. 10, 2014)

Beltran

Exhibit 30: Deposition of Charles Kopeika(Aug. 2, 2013)

Kopeika

Exhibit 31: Deposition of Kevin Ricks (Aug.28, 2013)

Ricks

Exhibit 32: Deposition of David Yu (Sep. 23,2014)

Yu

Exhibit 33: Letter dated September 9, 2004(NTL 0009891-93)

Tew Decl. Ex. 33

Exhibit 34: Exhibit 23 to the Deposition ofJoseph Watson (Oct. 3, 2014)

Tew Decl. Ex. 34

Exhibit 35: Problem Solving Worksheet (NTL0000158-61)

Tew Decl. Ex. 35

Exhibit 36: Deposition of Sally Nettleton(Aug. 20, 2013)

Nettleton


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xivFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS


Exhibit 37: Craigslist document produced byPlaintiffs (PL00000889-90)

Tew Decl. Ex. 37

Exhibit 38: Craigslist document produced byPlaintiffs (PL00000891)

Tew Decl. Ex. 38

Exhibit 39: Deposition of James Denning(Aug. 21, 2013)

Denning

Exhibit 40: Deposition of Alfred C. Morelli(Aug. 22, 2013)

Morelli

Exhibit 41: Declaration of Jared Wilsonproduced by Plaintiffs as Exhibit 4 to theTangren Declaration in Support of Plaintiffs’Motion for Class Certification

Tew Decl. Ex. 41

Exhibit 42: Declaration of Charles Stango(address redacted) produced by Plaintiffs asExhibit 4 to the Tangren Declaration inSupport of Plaintiffs’ Motion for ClassCertification

Tew Decl. Ex. 42

Exhibit 43: Declaration of Judy Stoneproduced by Plaintiffs as Exhibit 4 to theTangran Declaration in Support of Plaintiffs’Motion for Class Certification

Tew Decl. Ex. 43

Exhibit 44: Deposition of Zane Dery (Sep. 25,2013)

Dery

Exhibit 45: Declaration of Mary Baumchenproduced by Plaintiffs as Exhibit 4 to theTangren Declaration in Support of Plaintiffs’Motion for Class Certification

Tew Decl. Ex. 45

Exhibit 46: Deposition of Spencer Ware (Sep.17, 2013)

Ware


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xvFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS


Exhibit 47: Deposition of Brian Martin (Sep.10, 2014)

Martin

Exhibit 48: Deposition of Joshua Carson (Sep.16, 2014)

Carson

Exhibit 49: Plaintiff Sally Nettleton’sResponses to Ford Motor Company’s First Setof Interrogatories

Tew Decl. Ex. 49

Exhibit 50: Plaintiff James Denning’sResponses to Ford Motor Company’s First Setof Interrogatories

Tew Decl. Ex. 50

Exhibit 51: Plaintiff Alfred Morelli’sResponses to Ford Motor Company’s First Setof Interrogatories

Tew Decl. Ex. 51

Exhibit 52: Plaintiff Spencer Ware’sResponses to Ford Motor Company’s First Setof Interrogatories

Tew Decl. Ex. 52

Exhibit 53: Plaintiff Brian Martin’sResponses to Ford Motor Company’s First Setof Interrogatories

Tew Decl. Ex. 53

Exhibit 54: Plaintiff Zane Dery’s Responsesto Ford Motor Company’s First Set ofInterrogatories

Tew Decl. Ex. 54

Exhibit 55: Documents produced byProgressive Insurance Company (NTL5000297-309)

Tew Decl. Ex. 55

Exhibit 56: Expert Report of RichardHixenbaugh dated December 2014

Hixenbaugh Rpt.

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

Declaration of Christine Wood, Ph.D. Wood Decl.


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xviFORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS


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

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

Harless & Hoffer Decl.


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1


I. INTRODUCTION

Six named Plaintiffs seek certification of three separate state classes under the laws of

California, New Jersey, and Florida of current and former owners and lessees of three types of

SUV’s: 2002-2005 Ford Explorers, 2002-2005 Mercury Mountaineers, and 2003-2005 Lincoln

Aviators. (Plaintiffs’ Motion for Class Certification (“PM”) (ECF 215).) Plaintiffs’ Motion is just

the opening round in this case, which involves a total of twenty proposed state classes with twenty-

seven named Plaintiffs. Plaintiffs’ claims are premised on the assertion that Ford had an obligation

to inform them that the appliqué—a decorative piece of plastic on the rear liftgate of their

vehicles—may (or may not) develop a crack at some point during the life of the vehicle. The

proposed classes include:

• new vehicles, used vehicles, and leased vehicles;

• vehicles purchased or leased from Ford dealers, from used car lots, and from privatesellers (who themselves are putative class members);

• multiple owners of a single vehicle that has been bought and sold multiple times overthe fourteen year class period;

• vehicles that were purchased for personal use, business use, or for both;

• class members who purchased their vehicles knowing of the potential problem eitherfrom public sources, prior ownership (such as Florida Plaintiff Zane Dery), orbecause their vehicles actually had a cracked appliqué at the time of purchase(including more than a dozen of the declarants);

• vehicles that have never developed a cracked appliqué (the overwhelming majority);others that developed a cracked appliqué during the warranty period and had therepair covered by Ford; others that developed a cracked appliqué after the warrantyperiod (like all the named Plaintiffs) and either paid for repairs or, more commonly,never bothered to have it fixed;

• vehicles that have appliqués made of ABS plastic and others made of Xenoy, whichis much less likely to crack; and

• class members whose claims are barred by the relevant statute of limitations.

Plaintiffs’ Motion fails to show that such sweeping and disparate classes should be certified

under the laws of any of the states at issue. Remarkably, Plaintiffs’ Motion fails even to identify the

proposed class representatives, much less explain why they are adequate or their claims typical of


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2FORD’S MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; CASE NO 11-CV-2953-RS

the classes they seek to represent (if they even have claims). Instead, Plaintiffs rely on a motley

collection of “declarations” that their attorneys solicited on the Internet and dumped on Ford after

the close of discovery. But these purported declarations—as well as Plaintiffs’ own disparate

experiences—only serve to prove that individual issues predominate on such critical issues as

materiality, causation, reliance, knowledge, damages, and the various statutes of limitations.

Plaintiffs largely ignore these issues, instead arguing that a crack in the appliqué could result in

various safety hazards and injuries that Plaintiffs themselves have never experienced, that their own

expert’s testing disproves, and that are not supported by real world data despite the fact that the

vehicles at issue collectively have been driven more than 200 billion miles.1 Plaintiffs have not

established that there is an actual safety defect, but even if they could, class certification should be

denied for all of the reasons discussed below.

II. RELEVANT PROCEDURAL HISTORY

After the Court dismissed a majority of their claims pursuant to Ford’s Rule 12(b)(6)

motion, including all of their claims for breach of express and implied warranty (ECF 162),

Plaintiffs filed a Third Consolidated Amended Complaint (“TCAC”) (ECF 173). In total, the TCAC

asserted claims by thirty-one named plaintiffs in twenty-four states. Ford filed another partial

motion to dismiss, which the Court granted, dismissing all of the Plaintiffs’ claims for unjust

enrichment and violation of the Magnusson-Moss Warranty Act, which was the only nationwide

class claim. (ECF 182.) The Court’s Order resulted in the complete dismissal of plaintiffs Hough

(Alabama), Carson (Mississippi), Brunner (Ohio), and Buck (Tennessee). The Court also held that

Nettleton’s California Consumer Legal Remedies Act (“CLRA”) claim was barred by the statute of

limitations, and further held that the other California plaintiffs (Denning and Morelli) could not seek

damages or restitution under the CLRA because they had failed to provide pre-suit notice. Id. at 7-9.

At this stage, twenty-seven plaintiffs in twenty states remain. Plaintiffs have completed

1 As discussed at length in Ford’s Motion for Summary Judgment, Plaintiffs have failed to showthat the cracked appliqué is a safety defect or, even if it were, that Ford ever had any knowledge thatit was a safety defect, and for those, and other reasons, Ford had no duty to disclose the allegeddefect. If the Court dismisses Plaintiffs’ individual claims, it will moot their Motion for ClassCertification.


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discovery of Ford, including depositions. Ford has produced more than 150,000 pages of

documents, and produced fourteen current or former Ford employees for deposition. Ford has taken

written discovery of all Plaintiffs, but pursuant to the terms of the parties’ Stipulation Regarding

Scheduling for Discovery and Class Certification (ECF 111), Ford has not yet taken the depositions

of a majority of the Plaintiffs. The Stipulation provided that the parties would “initially focus their

class certification motion practice, and related named plaintiff discovery, on three States—

California, New Jersey and Florida.” (Id. at 2.) Plaintiffs’ Motion for Class Certification is limited

to these three states.

III. FACTS

A. The Design Of The Liftgate Glass Assembly

The vehicles at issue are 2002 through 2005 model year Ford Explorer and Mercury

Mountaineer vehicles, and 2003 through 2005 model year Lincoln Aviator vehicles. (Third

Consolidated Amended Class Action Complaint (“TCAC”) ¶ 1.) All of these different models have

rear liftgates with flip-glass that can be opened without opening the entire liftgate. For cosmetic

reasons, a plastic trim piece, referred to as the “appliqué,” covers the lower portion of the glass.

(Curtiss 19:19-22.). The applicable emblem, for Ford, Mercury or Aviator, nests in different

configurations into the appliqué, which is differently configured on each type of vehicle. The

appliqué does not support the liftgate glass and has no function in opening or closing it. (Halonen

129:9-10.) Rather, the liftgate glass is mounted to the body of the vehicle with two hinges located at

the top of the liftgate glass, and ball stud brackets and struts on each side of the glass allow it to be

opened and closed. (Maclean Decl. ¶¶ 10-11; Tew Decl. Ex. 3.) The appliqué is not mounted

directly to the glass, but instead is attached with adhesive to a reaction injection molded (“RIM”)

urethane. (Curtiss 20:5-17.) The RIM urethane is molded onto the liftgate glass and cured. (Id.) The

adhesive used to attach the appliqué to the RIM urethane is the same high strength adhesive that is

used for bonding glass to the vehicle, including the windshield. (Id. 97:12-20; Maclean Decl. ¶ 10.)

An electro-coated steel stud plate is affixed to the liftgate glass underneath the RIM urethane

and appliqué. (Maclean Decl. ¶ 12.) The stud plate serves as one of the mounting locations for the

rear wiper motor, as well as for the U-shaped striker that latches the glass to the liftgate. (Id. ¶ 14; S.


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Walters 22:9-23.) A plastic gasket ensures that the stud plate does not come into direct contact with

the liftgate glass. (Maclean Decl. ¶ 13.) The appliqué was not designed to be watertight. (S. Walters

77:23-78:11.) For that reason, a series of weep holes, in different configurations for the Aviator than

for the Explorer and Mountaineer, are integrated into the bottom edge of the RIM urethane, which

allows for any water that gets behind the appliqué to drain out. (Id. 78:12-17.) In addition, the steel

stud plate and studs are electro-coated specifically for the purpose of resisting corrosion. (Maclean

Decl. ¶ 12, 34; Pound Decl. ¶ 28.) A schematic showing the components of the Explorer liftgate

glass assembly is set forth below2:

Ford worked with two suppliers in manufacturing and assembling the appliqués and

liftgates. Lacks Industries (“Lacks”) manufactured the appliqués, which originally were made of a

type of plastic called acrylonitrile butadiene styrene (“ABS”). (Curtiss 25:12-16.) ABS has long

2 Maclean Decl. Fig. 1.


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been used in the automotive industry for a variety of interior and exterior components due to its

toughness, dimensional stability, high temperature resistance, aesthetics, and ease of processing,

and has proven to be a reliable material. (Maclean Decl. ¶ 35; D. Walters 104:12-21.) Lacks shipped

the appliqués to Dura Automotive (“Dura”), which assembled the liftgate assemblies and sent them

to Ford, where they were attached to the vehicles. (D. Walters 7:3-25; Curtiss 24:1-17.) Ford and its

suppliers performed a variety of tests on the liftgate prior to production, including water immersion,

thermal stress, adhesion, weather resistance, corrosion, and slam tests, all of which the liftgate

passed. (MacLean Decl. ¶¶ 39-40; Tew Decl. Ex. 6.) During the testing, the appliqué did not crack.

(S. Walters 38:1-7.). The 2002 model year Explorers and Mountaineers were first assembled in late

2000, and were first sold in 2001. (Watson 23:8-17.)

B. Ford Investigated Reports Of Cracked Appliqués

As with all new vehicles, after the 2002 Explorer and Mountaineer had been on the market

for a few months, Ford began receiving warranty claims for a variety of issues, including gasket

problems, squeaks and rattles, and engine issues. (Tew Decl. Ex. 8.) Among these various issues, by

June 2001 Ford had received a few reports of the appliqué cracking. (Watson 42:17-22.)3 Upon

receiving these reports, Ford began, with Dura and Lacks, to investigate what was causing the

cracks. (Id. 49:15-50:8.) Over the ensuing months, Ford received more warranty claims for cracked

appliqués, although the number of claims was low in relation to the number of vehicles sold. As of

December 17, 2001, Ford had received 177 claims out of 325,000 vehicles sold, or about .05%.

(Tew Decl. Ex. 9.) Ford and its suppliers conducted a variety of tests to determine the root cause of

the cracking. The testing included thermal expansion tests, environmental tests, fracture analysis,

wiper fluid tests, and slam tests. (Id.)

By March 2002, Ford had received 244 reports of cracked appliqués and decided to initiate a

Quicker Service Fix (“QSF”). (Tew Decl. Ex. 10.) Ford initiates a QSF when the number of reports

of a particular issue has reached a certain threshold, which for cosmetic issues such as the cracked

3 Plaintiffs argue that Ford was aware of the cracking appliqués when the vehicles were “firstrolling off the assembly line.” (PM 14). However, Plaintiffs provide no citation to support thisstatement and the undisputed evidence shows that Ford was not aware of any cracked appliquésuntil the vehicles had been in service for several months.


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applique is 250 reports. (Id.) The QSF is intended to expedite a service fix by implementing an

internal deadline of 90 days to come up with an effective repair. (Evenhouse 53:3-12.) The QSF is

used by Ford as part of its efforts to continuously improve its vehicles, and the fact that a QSF was

initiated for the appliqué did not indicate an unusual problem. (Tew Decl. Ex. 12.)

C. Ford Changed The Appliqué Material From ABS To Xenoy, Which WasEffective In Reducing The Already Low Incident Rate.

Based on the testing conducted by Ford and its suppliers, Ford determined that the appliqué

could crack due to Coefficient of Linear Thermal Expansion (“CLTE”) between the adhesive and

the appliqué. (Curtiss 96:19.) CLTE refers to the rate at which materials stretch and contract based

on changes in temperatures. (Id. 96:25-97:3.) Ford believed that because the appliqué was so firmly

attached to the RIM by the high strength adhesive, the appliqué could not always stretch and

contract when exposed to temperature changes, which sometimes led to the appliqué cracking. (Id.

97:12-22; Tew Decl. 13.) Ford investigated alternative methods for fastening the appliqué to the

RIM, such as different glues and tapes, as well as changes to the injection molding process in the

manufacture of the appliqué itself. (Curtiss 99:2-100:6; Bauer 13:3-14:4.) Ford ultimately

determined that the most effective fix would be changing the material used to make the appliqué.

Ford tested a variety of alternatives and found that two other plastics, known as Geloy and Xenoy,

proved to be more resistant to stresses and strains than ABS. (Bauer 13:17-14:4.) Xenoy proved the

most effective, and thus despite the fact that it was more expensive than both Geloy and ABS and

would require significant re-tooling costs, Ford decided to make the switch. (Curtiss 222:25-223:3;

D. Walters 108:8-19.) By May 7, 2002, the Xenoy appliqué had passed all of Ford’s testing, which

included adhesion tests, environmental tests, and slam tests. (Tew Decl. Ex. 15; Tew Decl. 16.)

Ford began producing vehicles with Xenoy appliqués in or around November 2002. (Tew

Decl. Ex. 17.) The switch to Xenoy was made before the 2003 Aviator went into production, and

thus all 2003-2005 Aviators have appliqués made of Xenoy. (Halonen 30:24-31:1.) For the Explorer

and Mountaineer, Xenoy was implemented in phases due to limited initial availability of the

material, but by February 2003, all newly manufactured Explorer and Mountaineer vehicles, as well

as all replacement liftgate assemblies, were assembled with a Xenoy appliqué. (Herline 31:15-32:3;


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Tew Decl. Ex. 19.) In December 2002, Ford issued a Technical Service Bulletin (“TSB”), which

advised repair technicians that if a vehicle had a cracked applique, the liftgate glass assembly

should be replaced with a new assembly that contained the Xenoy appliqué. (Tew Decl. Ex. 20.) At

that time, Ford dealers were required to replace the entire liftgate glass assembly because Ford had

not yet developed a procedure for removing the appliqué from the RIM, which required breaking

the bond with the adhesive, that did not also run the risk of breaking the glass in the process. (Bissi

67:4-13.) Replacing the entire liftgate glass assembly cost Ford approximately $1,200 per repair,

but there was no cost to owners because the part was covered in full under warranty. (Id. 64:1-4;

Tew Decl. Ex. 20 (stating that repair was eligible under the terms of the warranty).)

By June 2003, Ford had developed a new service procedure so that the appliqué could be

replaced without having to replace the entire liftgate glass assembly, and issued a TSB to advise

dealers of the new procedure. (Bissi 67:4-13; Tew Decl. Exs. 22, 23) Ford performed additional

tests on the liftgate assembly as part of the process to change the service procedure and the appliqué

exhibited no signs of cracking, delamination, warping or loss of adhesion. (Tew Decl. Ex. 24.) Ford

issued additional TSBs in 2004 and 2005 to update the model year and the applicable vehicles.

(Tew Decl. Exs. 25, 26, 27.) All of the TSBs stated that repairs were eligible under the terms of the

bumper-to-bumper warranty. (Id.)4

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. 28.) In June 2003, the engineering team

that was specifically tasked with investigating the appliqué issue projected that there would be

9,150 failures out of 642,000 vehicles—a rate of 1.4%. (Tew Decl. Ex. 22; Watson 191:4-24; 199:1-

3.)5 But like all parts on all vehicles of all makes and models, the Xenoy appliqué was not perfect.

4 Plaintiffs argue that Ford refused to cover repairs during the warranty period, but do not provide asingle citation to any document or testimony anywhere in the voluminous record in this case. (PM21.) In fact, all of the evidence cited above shows that Ford was consistently covering the appliquéunder warranty, even when it was costing Ford $1,200 per repair.5 Plaintiffs cite an e-mail from June 2003, in which Ford employee Joseph Watson stated that theABS appliqué “was projected to see a 100% failure rate.” (PM 15.) But Mr. Watson testified atdeposition that this statement was incorrect and was not supported by any data that was available toFord at the time or since (Watson 188:13-189:3.) In fact, in June 2003, the engineering team (whichwas Watson was not a part of) projected the 1.4% failure rate.


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As one Ford employee, Thomas Herline, explained, Xenoy was “successful and fixed the majority

of the issue” but all parts have an “acceptable failure rate.” (Herline 163:18-21.) An “acceptable

failure rate” means “not every part on every vehicle is going to perform its engineering function 100

percent of the time . . . some parts . . . will fail, and Ford recognizes that, which is why we have a

warranty program to address that.” (Id. 163:22-164:7.)

D. Ford’s Investigation Did Not Reveal Any Safety Issues Caused By The CrackedAppliqué.

The alleged defect in this case is the propensity of the appliqué to crack. Plaintiffs initially

alleged this was a safety issue because people could cut their fingers on the edges, the appliqué

could detach while driving, and because a crack could undermine the structural integrity of the

liftgate glass in some unexplained fashion, causing it to break. (Consolidated Amended Complaint

(ECF 70) ¶¶ 72-73; TCAC ¶9.) After years of litigation, Plaintiffs for the first time argue in their

class certification motion that a cracked appliqué can lead to corrosion of the underlying studplate,

which in turn can cause glass breakage. They also assert that a corroded studplate can result in the

release of the latch and spontaneous opening of the glass while driving. But there is not a single

document or bit of testimony that establishes or even suggests that anyone at Ford—up to the time

Plaintiffs’ expert came up with the corrosion theory in this litigation in 2014—ever knew of

corrosion of the studplate, much less associated it with a cracked appliqué or ever thought or even

suspected that a cracked appliqué could create any of the safety hazards plaintiffs now rely on.

Rather, as discussed above, the appliqué was designed solely as a decorative trim piece with

no structural or operational function, and no one at Ford ever believed that a crack constituted or

could create any safety issue. (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 Dura and Lacks. (D. Walters 116:21-117:2; S. Walters 151:18-24.)

Moreover, Ford’s Automotive Safety Office (“ASO”) reviewed all of 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 by the ASO or NHTSA. (Bissi 70:20-71:9; Herline

106:2-15; Ricks 160:5-18; Yu 7:10-14.)


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A subset of the putative class, consisting of certain Explorers and Mountaineers, were the

subject of a recall relating to a manufacturing problem with the liftgate glass hinges and struts. That

problem could result in the liftgate glass dropping and breaking. In September 2004, Ford issued

Safety Recall 04S20 to remedy the issue with the struts and hinges. (Tew Decl. Ex. 33.) The issue

addressed by Recall 04S20 was completely unrelated to the cracked appliqué issue. (Kopeika 216:4-

7; Herline 171:18-172:12.) While Ford received reports of glass falling and breaking in connection

with the hinge and strut problems, nothing in the warranty claims indicated any relationship

between a cracked appliqué and glass breakage. For example, a summary of warranty claims

compiled by Plaintiffs and presented at the deposition of Ford employee Joseph Watson included 25

vehicles with glass breakage, but none of those vehicles had a cracked appliqué. (Watson 196:20-

197:8; Tew Decl. Ex. 34.) A separate summary showed 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. (Watson 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).)

The lack of any connection also has been proven by testing, both by Ford and Plaintiffs’

own expert. In the process of trying to determine the root cause of the appliqué cracking, Ford

conducted extensive testing, including slam tests (i.e., repeatedly opening and closing the glass),

and the glass never broke. (Herline 172:8-12, 204:19-205:2.) Plaintiffs’ own expert, Henry

Chamberlain, also conducted slam tests on liftgates that were at least 10 years old and were pulled

from junkyards. Despite running an unrealistically high number of slam cycles on these already old

liftgates, the glass never broke. (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 use in the real world—on a test liftgate that was already 12 years old. (Id.

¶ 62.)

Ford also was never aware of any issue with the appliqué detaching from the vehicle.


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Although the word “detaching” was used in an e-mail written by Ford employee Phil Evenhouse,

and the word “separation” appears in TSB 02-25-6, which he drafted, 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 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.) Moreover, during Ford’s root cause investigation, Ford determined that the

issue was “cracking, splitting, [or] warping” and was not “lifting, fading, peeling, [or] loss of

adhesion to the appliqué.” (Tew Decl. Ex. 35.) As discussed above, the very reason for the appliqué

cracking was that it was so firmly adhered to the RIM that the plastic could not expand or contract.

(Curtiss 97:12-22; Tew Decl. Ex. 13.) And the reason that the initial service procedure required

replacing the entire liftgate glass assembly was because of the difficulty in removing the appliqué.

(Bissi 67:4-13.) And, as discussed above, since Ford had no knowledge of any corrosion of the

studplate, which was electrocoated to resist corrosion, like other exterior components, it had no

knowledge and never received any reports of the liftgate latch unlatching due to a corroded

studplate, much less any connection between a cracked applique and such an event.

The putative class vehicles have now been driven more than 200 billion miles since they

were first sold 14 years ago. (Harless & Hoffer Decl. ¶ 30(i).) Despite being used so extensively,

Plaintiffs do not cite a single accident or injury caused by an appliqué that has come off the vehicle,

nor a single accident or injury caused by the liftgate opening spontaneously—and Ford is not aware

of any. Plaintiffs cite a few individuals who allege minor cuts or scrapes due to glass breaking, but

as noted, Plaintiffs have not shown any connection between the cracked appliqué and glass

breakage.

E. Plaintiffs’ Claims and The Proposed State Classes

The three California Plaintiffs are: (1) Sally Nettleton, owner of a 2003 Explorer purchased

used whose appliqué cracked after five years and 92,000 miles; (2) James Denning, an Oregon

resident with a 2004 Explorer whose appliqué cracked after seven years and 109,000 miles; and (3)


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Al Morelli, owner of another 2003 Explorer whose applique cracked after eight years and 54,000

miles. None owns a Lincoln Aviator. All three assert claims under the California Unfair

Competition Law (“UCL”) and the Secret Warranty Law, and Denning and Morelli assert a claim

under the CLRA for injunctive relief. The sole Florida Plaintiff, Zane Dery, purchased a used 2005

Lincoln Aviator in 2008, and developed a cracked appliqué in 2011. Although he knew from prior

ownership of a 2003 Aviator of the potential for a crack to occur, he asserts a claim under the

Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”). Finally, there are two New Jersey

Plaintiffs: Spencer Ware, who bought a used 2004 Explorer whose applique cracked in 2011, and

Brian Martin, owner of a 2002 Mercury Mountaineer whose applique cracked in either 2006 or

2008. Both assert a claim under the New Jersey Consumer Fraud Act (“CFA”). No named Plaintiff

experienced a crack during the warranty period. Except for Denning, none of the six named

Plaintiffs ever had the crack repaired, and have driven tens of thousands of miles since then without

incident. All of the Plaintiffs’ consumer fraud claims are based on Ford’s alleged failure to disclose

at the time of sale that the appliqué could potentially crack at some point during the life of the

vehicle. Plaintiffs seek certification of three separate classes defined as “[a]ll current and former

owners or lessees of” 2002-2005 Explorers or Mountaineers, or 2003 to 2005 Lincoln Aviators,

“who purchased or leased said vehicle in” California, New Jersey, or Florida. (PM iii.) Through

their vehicle appraiser expert, Plaintiffs assert that damages can be determined on a class-wide basis

using a straight 15% diminution in value of each vehicle, which can be apportioned among new and

used owners of each vehicle.

IV. LEGAL STANDARD

Class actions are the “exception to the usual rule that litigation is conducted by and on

behalf of the individual named parties only.” Comcast v. Behrend, 133 S.Ct. 1426, 1432 (2013)

(citation omitted). To come within this exception, the plaintiffs have “the burden of showing that

they have met each of the four requirements of Rule 23(a) and at least one subsection of Rule

23(b).” In re Optical Disk Drive Antitrust Litig., 303 F.R.D. 311, 315 (N.D. Cal. 2014). Rule 23 is

“much more than a mere pleading standard.” Id. The plaintiffs must “affirmatively demonstrate”

with “evidentiary proof” that the requirements of Rule 23 have been met. Comcast, 133 S.Ct. at


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1432. In examining the evidence, “the trial court must conduct a rigorous analysis to determine

whether the party seeking certification has met the prerequisites of Rule 23.” Mazza v. Am. Honda

Motor Co., 666 F.3d 581, 588 (9th Cir. 2012) (citations omitted). This analysis “will frequently

entail overlap with the merits of the plaintiff’s underlying claim.” Comcast, 133 S.Ct. at 1432

(citation omitted). Further, “[t]his ‘rigorous’ analysis applies to both Rule 23(a) and Rule 23(b).” In

re Optical, 303 F.R.D. at 315.

V. CERTIFICATION OF THE CALIFORNIA CLASS SHOULD BE DENIEDBECAUSE INDIVIDUAL ISSUES PREDOMINATE.

A. Facts Relating To The California Plaintiffs

1. Sally Nettleton

Sally Nettleton purchased a used 2003 Ford Explorer on November 28, 2003 from Frontier

Ford in Santa Clara. (Nettleton 48:18-23.) The vehicle had 21,192 miles on it at the time of

purchase and previously had been part of the Hertz rental car fleet, a fact of which Nettleton was

aware prior to purchase. (Id. 44:22-45:7, 53:10-17.) Before buying the Explorer, Nettleton did not

do any research, nor did she review a sales brochure or any other written materials. (Id. 54:14-55:7.)

She may have seen advertisements, but does not recall anything in particular. (Id. 55:11-21.) She

purchased the Explorer because she “liked the look” of it, thought it “was easy to drive,” and felt

that it was a good value. (Id. 44:2-15.) Nettleton did not ask anyone at Frontier Ford about the

potential costs of servicing and maintaining the vehicle. (Id. 54:9-13.)

The vehicle came with the remainder of the Ford 3 year/36,000 mile bumper to bumper

warranty, and Nettleton purchased an extended warranty because she understood that once the

bumper to bumper warranty expired, she would be responsible for the cost of repairs. (Id. 52:6-22.)

Nettleton’s appliqué cracked in February 2008, when the vehicle was five years old and had 92,000

miles on it. (Id. 110:9-112:15.) Since it was well past the 75,000 mile extended warranty, the

dealership declined to repair the appliqué under warranty. (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, even though

the vehicle was out of warranty, but Ford declined. (Id. 115:6-10, 118:25-119:5)

Nettleton never had the applique replaced, and has driven it for the past 7 years since it


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cracked without incident. The liftgate glass on Nettleton’s Explorer has never fallen or shattered,

nor has the glass ever come loose. (Id. 123:2-12.) Nettleton, who lives in Cupertino, claims she

never replaced the appliqué because she has not been able to afford it. (Id. 119:24-120:7.) But she

has spent more than $17,600 to service and maintain her Explorer, including replacing the

transmission and engine. (Id. 156:12-18, 169:9-19, 171:5-9, 207:6-23.) She testified that she

probably would have still purchased the Explorer even if she had known she would spend more than

$17,600 servicing and maintaining it, but may not have purchased it if she had known the

appliqué—an approximately $500 repair—may crack. (Id. 208:14-23.)

In 2011, Nettleton twice listed her Explorer for sale on Craigslist. (Id. 125:4-14.) In the first

listing, which was posted on January 27, 2011, Nettleton did not mention the cracked appliqué, but

instead stated the vehicle is a “[v]ery reliable, great family car . . . . Good condition all round.”

(Tew Decl. Ex. 37.) A few months later, on March 28, 2011, Nettleton increased the price to $7995,

but again did not mention the cracked appliqué. (Tew Decl. Ex. 38.) In the listing, Nettleton noted

the vehicle had 130,000 miles on it, but was a “[g]reat family car” and that she “[l]oved this SUV”

and there were “NO dents.” (Id.) Nettleton ultimately decided not to sell her Explorer because she

still wanted a four-wheel drive vehicle to drive in the mountains. (Nettleton 131:7-9.) Her

advertisement did attract the attention of an attorney, who approached her about joining this lawsuit.

(Id. 124:21-25.)

2. James Denning

James Denning, who has lived in Portland, Oregon since 2011, comes from a self-described

“Ford family” that began with his father’s purchase of a Ford in 1929. (Denning 22:5-6.) Denning

personally has owned several other Fords and traded in both a Mustang and Expedition when he

purchased a new 2004 Explorer on March 12, 2014 at North County Ford in Vista, California. (Id.

23:9-11; 32:16-20.) Denning liked the Explorer because it was “utilitarian” and the particular one he

purchased was the cheaper, “stripped down model.” (Id. 36:18-37:1.) He did not consider any other

vehicles. (Id. 24:18-24.) 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-


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143:16; 164:11-14.). The only advertisement he recalls seeing was a newspaper advertisement from

a local dealership. (Id. 118:7-17). Denning did not consider the potential future costs of repairs and

maintenance when purchasing the Explorer. (Id. 37:18-24.) The Explorer came with the standard 3

year/36,000 mile bumper-to-bumper warranty. (Id. 39:4-40:3.) Denning understood that Ford would

cover the cost of repairs during the warranty period and, other than for any recalls, he would be

responsible for repairs after the warranty period. (Id. 40:4-41:6.)

The appliqué on Denning’s Explorer cracked in August 2011, when the vehicle had

approximately 109,000 miles on it. (Id. 69:8-21; 80:1-13.) Denning had the appliqué repaired for a

total cost of $438.68. (Id. 71:22-24.) Denning understood his vehicle was well past the warranty

term, so he did not ask for the repair to be covered under warranty. (Id. 71:17-21.) The liftgate glass

on his vehicle has never fallen out or come loose. (Id. 103:7-22.) Denning said he “might have

made a different choice” if he had known prior to purchase that the appliqué on his Explorer would

crack at 109,000 miles. (Id. 95:13-20.) Aside from the cracked appliqué, Denning has been happy

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

3. Al Morelli

Al Morelli, a resident of Escondido, purchased a new 2003 Explorer on September 6, 2003

from Drew Ford. (Morelli 102:8-18.) He wanted an SUV because of the cargo capacity and the fact

that its higher seating position afforded better visibility when driving. (Id. 76:2-19.) Unlike

Nettleton and Denning, before purchasing the Explorer, 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. (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.) He ultimately chose the Explorer because of cost and

handling attributes. (Id. 78:14-79:3.) 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.)

Morelli’s vehicle came with the standard 3 year/36,000 mile warranty. (Id. 88:8-12.) Morelli


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understood that after the warranty expired, he would be responsible for the cost of repairs. (Id.

91:13-92:7.) He did not ask the dealer about potential maintenance and repair costs over the life of

the vehicle, but he recalls doing online research about the average yearly repair costs for vehicles

including the Explorer. (Id. 95:14-96:19.) He understands that all vehicles will require repairs, and

that the problems requiring repair will differ from vehicle to vehicle, including vehicles of the same

model. (Id. 130:9-25.)

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.) Morelli requested that

Ford cover the cost of repair, but his request was denied because his vehicle was out of warranty.

(Id. 125:18-23.) Morelli does not think that a vehicle manufacturer should disclose every problem

that “might” occur, but should disclose every “significant” problem. (Id. 151:22-154:11.) He

considers the cracked appliqué a “significant” problem that is on par with engine failure. (Id.

154:13-20.) He has never seen any manufacturer of vehicles, or other products like computers or

televisions, disclose all of the problems that could go wrong with the product. (Id. 156:3-12;

157:17-158:14.)

B. Individual Issues Predominate On The CLRA And UCL Claims

The proposed California class cannot be certified because it fails to meet the commonality

requirement of Rule 23(a)(2) and the predominance requirement of Rule 23(b)(3). The commonality

requirement “is easy to misread, since ‘[a]ny competently crafted class complaint literally raises

common ‘questions.’” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011). “‘What

matters to class certification . . . is not the raising of common ‘questions’—even in droves—but,

rather the capacity of common answers apt to drive the resolution of the litigation.’” Id. (citation

omitted). An issue is not common unless “determination of its truth or falsity will resolve an issue

that is central to the validity of each of the claims in one stroke.” Id. at 2545. Even when the

commonality requirement is satisfied, the plaintiff must meet the “far more demanding”

predominance requirement of Rule 23(b)(3). Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 623-24

(1997). “Predominance requires that ‘common issues be both numerically and qualitatively

substantial in relation to the issues peculiar to individual class members.’” In re Optical, 303 F.R.D.


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at 318 (citation omitted). In their motion, Plaintiffs recite a series of what they claim to be common

“questions,” but they fail to show those questions have common answers. And even if there are any

common answers to these questions, individual issues predominate.

1. Materiality Is Not A Common Issue.

Plaintiffs have failed to show that materiality of the alleged nondisclosure—a necessary

element of their CLRA and UCL claims -- can be proven with class-wide evidence. They merely

allege that putative class members would uniformly consider a disclosure about the potential for a

cracked appliqué, and its purported safety risks, to be material. Further, they contend that because

materiality is judged by a “reasonable person” standard, the question will be resolved by common

evidence. (PM 31-32.) However, California courts repeatedly have held that “if the issue of

materiality . . . is a matter that would vary from consumer to consumer, the issue is not subject to

common proof, and the action is properly not certified as a class action.” In re Vioxx Class Cases,

180 Cal. App. 4th 116, 118 (2009); see also Webb v. Carter’s, Inc., 272 F.R.D. 489, 502 (C.D. Cal.

2011) (“Here, Defendants have put forth persuasive evidence that materiality would vary from

consumer to consumer, such that the reasonable consumer standard cannot be applied.”); Tucker v.

Pacific Bell Mobile Srvs., 208 Cal. App. 4th 201, 228 (2012) (holding that materiality was not a

common issue based on facts of case); Fairbanks v. Farmers New World Life Ins. Co., 197 Cal.

App. 4th 544, 565 (2011) (“While we acknowledge that materiality is considered pursuant to the

objective standard [of a reasonable consumer], we agree with the trial court that the issue is

nonetheless subject to individual proof under the circumstances of this case.”); Caro v. Procter &

Gamble Co., 18 Cal. App. 4th 644, 668 (1993) (holding that materiality of representation was an

individual question).

The evidence in this case shows that materiality cannot be resolved with common proof.6

6 Arguably, no reasonable person would attach importance to the disclosure of one specific potentialdefect, without considering all of the other defects that could arise. All vehicles of every make andmodel have the potential to develop defects, especially the longer they are driven. See Thiedemannv. Mercedes-Benz USA, LLC, 872 A.2d 783, 794 (N.J. 2005) (“Defects can, and do, arise withcomplex instrumentalities such as automobiles.”) A consumer who rejected one of the subjectvehicles because of the possibility that the appliqué may crack would simply end up purchasinganother vehicle that may develop other defects. For this reason, information about any specificdefect that may occur (but probably will not) in any particular vehicle is not something that areasonable person would consider important. In any event, at a minimum, the issue of materialitywould vary from consumer to consumer.


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Indeed, thirteen of the declarations solicited by Plaintiffs’ counsel expressly state that the appliqué

was cracked at the time the declarants purchased their vehicles. (Harless & Hoffer Decl. ¶

31(b)(iii).) For example, Jared Wilson states that when he purchased his used vehicle in 2012, the

original owner had already had the appliqué repaired, and it had cracked again by the time Wilson

purchased it. (Tew Decl. Ex. 41.) Others, like Charles Stango, purchased a vehicle with a cracked

appliqué and also were specifically told by the seller that it was a “common” problem. (Tew Decl.

Ex. 42 (“I did ask the dealership about the crack in the lift gate and the dealer told me that it was

common.”).) These individuals and the others like them chose to purchase a vehicle with a cracked

appliqué because whatever importance that information had to them, if any, was outweighed by the

positive features of the vehicle.

Other putative class members knew of the potential problem at the time of purchase and

understood Ford would not cover repair costs out of warranty, but still purchased the vehicle. For

example, Judy Stone states that she “Bought the car used off the lot. We had looked at several other

explorers [sic] on the lot and the majority of them had cracks already. We asked the dealer what

was the deal with that—they indicated a defect but it wasn’t anything Ford would address.” (Tew

Decl. Ex. 43 (emphasis added).) Stone purchased an Explorer anyhow, and shortly after, it

developed a crack. (Id.) However, even this experience did not deter Stone’s son from “recently”

purchasing a used 2004 Explorer, which later developed a crack. (Id.)

Another example is Florida plaintiff Zane Dery, who had a 2003 Aviator that developed a

cracked appliqué, which he repaired at his own expense. Despite this experience, he later sold his

2003 Aviator and purchased a 2005 Aviator. (Dery 99:7-14.) He was not deterred by the possibility

that his new Aviator may also develop the problem. Nor was the purchaser of Dery’s 2003 Aviator

concerned about the issue. Dery testified that he specifically disclosed the fact that the appliqué had

cracked and the buyer was “fine with it.” (Id. 49:4-6.) Moreover, Dery got the price he asked for the

2003 Aviator, which was above bluebook value. (Id. 30:23-31:1; Harless & Hoffer Decl. ¶ 33(a).)

Like Dery and the individual who purchased his vehicle, some of the declarants testified that they

would not be deterred from future purchases—although the word “declarant” must be used loosely.

Take for example the declaration of Mary Baumchen, which actually appears to have been signed


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by someone who says he is her husband. (Tew Decl. Ex. 45.) Whomever the declarant actually is,

the individual purports to own a “2002-2005 Explorer” that developed a cracked appliqué out of

warranty, which the dealership apparently had repaired for free by a body shop. (Id.) However,

when the appliqué cracked again, the dealership would not repair it again “so we just live with it.”

(Id.) Notably, despite twice having a cracked appliqué, the declarant says that he (or she) “[w]ill

continue to buy Fords but I always knew it wasn’t our fault.” (Id.)

This evidence is consistent with human factors research, which consistently shows that

consumers are influenced by a variety of factors when purchasing products such as vehicles, and

would not uniformly react to any particular information, such as a disclosure that the appliqué could

crack. (Wood Decl. ¶¶ 42-44.) And here, of course, the proposed class includes not just individual

consumers, but companies like Hertz, which owned a fleet of Explorers like Nettleton’s who have

much different reasons for purchasing vehicles. Moreover, the fact that the appliqué often does not

crack until the vehicles are many years old, further diminishes the importance of any disclosure that

Ford could have provided. Scientific studies show that individuals engage in “temporal

discounting”—that is, if the potential loss is not likely to occur until well into the future, individuals

discount the importance of the information in the present day. (Id. ¶¶ 52, 54.) This factor is

particularly relevant here, where the putative class includes individuals and entities that leased their

vehicles, knowing that they would simply turn in the vehicles and walk away at the end of the lease

period, along with others who purchased their vehicles with the expectation they would keep them

until they became worthless. (See, e.g., Ware 94:4-14 (testifying that he plans to keep vehicle until

it has no value).)

Even if there were a safety risk associated with a cracked appliqué, which is not the case,

Plaintiffs themselves demonstrate that they would not react uniformly if a safety risk were

disclosed. While Plaintiffs profess to be concerned about safety, five of the six named Plaintiffs,

including California Plaintiffs Nettleton and Morelli, have driven with the cracked appliqué for

many years and have yet to have it repaired—even after they joined this lawsuit in which the safety

allegations are the centerpiece of their claims. Their reasons for failing to do so differ, but

ultimately undercut any claim that they truly consider the cracked appliqué to be a safety defect.


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Nettleton says she has not been able to afford the approximately $500 repair, yet has spent more

than $17,000 on other repairs to the vehicle. (Id. 119:24-120:7, 207:6-23.) New Jersey Plaintiff

Brian Martin says his appliqué cracked in either 2006 or 2008, and considers it to be a safety defect,

yet he has never had it repaired. This despite the fact that he uses the Mountaineer as the “family

vehicle” and transports his two young children in it. (Martin 12:21-22, 147:12-15.) Even if Ford

agreed now to repair the appliqué, he still would not have it done and instead would just take the

cash value of the repair. (Id. 217:12—218:3-9.) Many of the declarants evidently have a similar

view. Based on the information that can be gleaned from the declarations, 71% of the declarants

have not had their appliqués repaired. (Harless & Hoffer Decl. ¶ 32(e)(i).) In short, any claim that a

disclosure of a safety defect would have been material is belied by the decision of most of the

Plaintiffs and declarants to continue to drive their vehicles for years and thousands of miles without

having the appliqué repaired. See, e.g., Priebe v. Autoban, Ltd., 240 F.3d 584, 588 (7th Cir. 2001)

(“Although Priebe maintains that he ‘lost faith’ in the Acura and believed it was ‘dangerous to

drive,’ his actions belie these vague claims. Priebe continued to drive the car; indeed, at the time of

trial, Priebe had driven the Acura more than 30,000 miles.”)

Similarly, a specific disclosure that the appliqué has cracked and the liftgate glass has

broken does not deter individuals from purchasing the vehicles. For example, former Mississippi

plaintiff Joshua Carson (whose claims were dismissed by the Court), testified that the appliqué on

his Lincoln Aviator cracked, and several months later the liftgate glass broke. (Carson 49:6-19.)

When he later listed his vehicle for sale, his listing noted that the Aviator was a “perfect family

vehicle” and that he had “no issues with the vehicle now or since we have owned it.” (Id. 94:7-

95:1.) His ad attracted the attention of a family with two young children. (Id. 101:20-102:2.)

Although not mentioned in his ad, Carson says he specifically told the family what had happened to

the liftgate when they came to look at the vehicle. (Id. 99:17-100:7, 100:18-101:19 ) Nevertheless,

the family was not deterred and paid Carson his full $7,800 asking price, which was well above

bluebook value. (Harless & Hoffer Decl. ¶ 33(c).)

Human factors research confirms that the importance of safety disclosures varies from

person to person. Studies have found that only about half of all vehicle purchasers consider safety to


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be a factor in their purchase decisions. (Wood Decl. ¶ 24.) Indeed, when rollover warnings were

placed on Ford Broncos in the 1980’s, sales actually increased, demonstrating that consumers were

not deterred by the disclosure of the potential safety risk. (Wood Decl. ¶ 35.) Other studies show

that even when individuals are provided with warnings of specific health consequences (such as

cancer or birth defects), the majority do not alter their behavior based on the warning. (Wood Decl.

¶ 36.) Moreover, temporal distance to the potential adverse health consequence further diminishes

the importance of the warning to many people. (Wood Decl. ¶ 52.)

For these reasons, courts have found that materiality is not a common issue. In Webb, the

plaintiff alleged that the defendant failed to disclose that infant clothing contained “toxic chemicals

that could cause adverse skin reactions.” 272 F.R.D. at 493. As in this case, the defendant in Webb

presented evidence “that materiality and reliance would vary from consumer to consumer, such that

the reasonable consumer standard cannot be applied.” Id. at 502. As in this case, the defendant also

presented expert evidence that if a warning had been given and read, “consumers would not be

expected to respond uniformly to the message.” Id. at 503. The court concluded that materiality was

“not subject to common proof under the reasonable consumer standard and that individual issues

predominate.” Id.

Similarly, in Sanchez v. Wal-Mart Stores, Inc., 2009 U.S. Dist. LEXIS 48428 (E.D. Cal.

May 28, 2009), defendant allegedly failed to disclose that certain baby strollers had dangerous

pinch points that created an “unreasonable potential for harm.” Id. at *2. The court denied

certification, finding that “[t]here are innumerable variations in the experiences and information

possessed by consumers, in the factors that influence consumers’ purchasing decisions, and in the

manner by which consumers react to product warnings and the disclosure of safety information.” Id.

at *8. The court recognized that “[t]he putative class will include persons who knew about the

alleged hazard, yet purchased the product anyway . . . and many others for whom the ‘warning’

would have made no difference in their purchase decision.” Id.; see also Fine v. ConAgra Foods,

Inc., 2010 U.S. Dist. LEXIS 101830, at *11 (C.D. Cal. Aug. 26, 2010) (denying class certification

because, among other reasons, the class “would likely include people with varying rationales behind


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their purchases”).7

Courts have reached the same conclusion even in cases (unlike this one) where there was

actual evidence of injuries. For example, in Debbs v. Chrysler Corp., 810 A.2d 137, 158 (Pa. Super.

Ct. 2002), the trial court certified a class under the Pennsylvania consumer fraud statute based on

the defendant’s alleged failure to warn that deployed airbags could cause burns. Like the CLRA and

UCL, the Pennsylvania statute only requires disclosure of material facts, and materiality is governed

by a reasonable consumer standard. Id. at 157. The appellate court reversed, holding that class

certification was inappropriate because “[r]easonable consumers could come to different

conclusions about the materiality of the withheld information.” Id. at 158. The court explained that

“consumers could have a wide range of reactions to the undisclosed information, depending on a

number of factors including: (1) their personal degree of risk-aversion; and (2) their assessment of

the other advantages and disadvantages of buying [the vehicles at issue].” Id. The same is true here.

The recent unpublished decision in Edwards v. Ford Motor Co., 2015 U.S. App. LEXIS

3073 (9th Cir. Feb. 27, 2015), which is not precedent under F.R.A.P. 32.1, does not require a

different result. In Edwards, the Ninth Circuit reversed the district court’s order denying class

certification and held that materiality could be proven with common evidence. Id. at *4. But the

court provides no analysis to support its ruling. Nothing in Edwards establishes that materiality can

never be an individual issue under California law, and the decision does not even mention, much

less distinguish the cases holding that materiality could not be proven on a common basis due to the

evidence establishing that it was not, in fact, a common issue.. The court did not even discuss cases

such as In re Vioxx, Caro, Fairbanks, or Webb, or any of the evidence presented to the trial court.

The only California case the court cites, Mass. Mutual Life Ins. Co. v. Superior Court, 97 Cal. App.

4th 1282 (2002), stands for the unremarkable proposition that materiality can be proven with

common evidence where the “record permits” it. 97 Cal. App.4th at 1293. In that case, the record

permitted such a conclusion because there was no evidence that materiality varied from consumer to

7 Sanchez and Fine analyzed the issue under the typicality prong of Rule 23, rather thancommonality, but as the Supreme Court has noted, the “‘commonality and typicality requirementsof Rule 23(a) tend to merge.’” Fine, 2010 U.S. Dist. LEXIS 101830, at *9 (citing Gen. Tel. Co. v.Falcon, 457 U.S. 147, 158 n. 13 (1982).)


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consumer. But that does not mean materiality can be proven by common evidence simply because

the reasonable consumer standard applies. Indeed, the court in Mass. Mutual considered it “self-

evident” that materiality cannot be proven with common evidence “where the record will not permit

it.” Id. at 1294. Thus, Mass. Mutual is in accord with all of the other California cases holding that

materiality is not a common issue when the evidence in the particular case before the court shows

that the importance of the undisclosed information “would vary from consumer to consumer.” In re

Vioxx, 180 Cal. App. 4th at 129; Tucker, 208 Cal. App. 4th at 222 (same).

Here, Ford has presented substantial evidence—much of it Plaintiffs’ own evidence—that

shows that the importance of a disclosure would vary among the Plaintiffs and putative class

members. See Fairbanks, 197 Cal. App. 4th at 565 (holding that it was “not a mere hypothetical

scenario” because the defendant had “submitted expert evidence” and had relied on “plaintiffs’ own

evidence” to show that materiality was not a common issue). Accordingly, based on the evidence in

this case, individual issues predominate on the question of materiality.8

2. Causation And Reliance Are Not Common Issues.

Proof of a CLRA violation requires proof of causation, which in turn requires proof of

reliance. See, e.g., Nelson v. Pearson Ford Co., 186 Cal. App. 4th 983, 1022 (2010) (holding that

the CLRA requires proof of “actual reliance”). “Reliance is also an element of UCL claims.” Otto v.

Abbott Labs., Inc., 2015 U.S. Dist. LEXIS 56121, at *8 (C.D. Cal. Jan. 28, 2015). To prove reliance

on an omission, each class member must prove that he or she would have been aware of a disclosure

had one been made, and would have acted differently based on that disclosure. Mirkin v.

Wasserman, 5 Cal. 4th 1082, 1093 (1993). In Edwards, the court held that a finding of materiality

gives rise to a “rebuttable inference of reliance as to the class.” 2015 U.S. App. LEXIS 3073, at *6.

8 Another case on which Plaintiffs heavily rely, Chamberlan v. Ford Motor Co., 402 F.3d 952, 961.(9th Cir. 2005), also provides no analysis of materiality, but simply states that it was “plain enough”that materiality and other issues were common in that particular case. In so doing, however, thecourt made clear that it was “not departing from the principle that the trial court should rigorouslyanalyze the facts of a class action to ensure that it meets the requirements for certification. Wesimply hold that in this case, the issues were readily apparent.” Id. at 962 (emphasis added). Thus,Chamberlan is a fact-bound decision that recognizes that the “rigorous analysis” standard requiresthe district court to examine the facts and the evidence in the case before it, and not simply apply arubber stamp based on the results in other cases. Here, the evidence overwhelmingly shows thatmateriality and the other issues discussed herein are not common to the proposed class.


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But that is where the court’s analysis mistakenly stopped. The California Court of Appeal has held

that “[t]he rule permitting an inference of common reliance where material misstatements have been

made to a class of plaintiffs will not arise where the record will not permit it.” Tucker, 208 Cal.

App. 4th at 228 (emphasis added); Cohen v. DirectTV, Inc., 178 Cal. App. 4th 966, 979-82 (2009)

(holding that the record in that case showed that reliance was not a common issue under either the

CLRA or UCL); see also Otto, 2015 U.S. Dist. LEXIS 56121, at *7-11 (holding that presumption

did not apply to CLRA or UCL claims).9 For the reasons discussed above, the record here shows

that materiality varies among the class members and thus there is no rebuttable inference of

reliance.

Plaintiffs were asked in interrogatories what form they contend the disclosure should have

been made, and they merely stated that Ford should have provided a recall notice. (Tew Decl. Exs.

49-54.) The evidence shows that, regardless of how presented, many class members never would

have seen or noted it. Plaintiffs Nettleton and Denning testified that prior to purchase they did no

research, and did not review a brochure or other materials, such as the owner’s manual or scheduled

maintenance guide. (Nettleton 54:14-55:7; Denning 42:10-20; 47:10-16; 95:4-8; 141:24-143:16;

164:11-14). Since Nettleton and Denning—and class members like them—never looked at any

source where a disclosure theoretically could have been provided, they cannot prove that they

would have seen a disclosure. In contrast, Morelli testified that he did “a lot of research” and

“looked at a lot of different” websites prior to purchase, including the Ford website (Morelli 78:14-

20; 82:25-84:19.) Similar differences exist among the named Plaintiffs in other states, and such

differences undoubtedly would exist among the class as a whole. (Wood Decl. ¶¶ 26-27.) Some

class members may be more like Morelli, but making that determination would require individual

cross-examination. And even for those, like Morelli, who looked at the Ford website, not all of them

would have seen a disclosure. Studies show that people frequently do not read warnings even when

9 Tucker, Cohen, and Otto all specifically reference and distinguish the California Supreme Court’sopinion in In re Tobacco II Cases, 46 Cal. 4th 298 (2009), in which the court held that under theUCL a “presumption, or at least an inference, of reliance arises wherever there is a showing that amisrepresentation was material.” Id. at 327. These cases recognize that even following Tobacco II, acourt must analyze the particular evidence before it to determine whether the rebuttablepresumption is appropriate.


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they are provided, including prescription drug warnings and Proposition 65 warnings that

specifically warn of serious health risks. (Wood Decl. ¶ 36.) In sum, even if Ford had provided a

disclosure about the cracked appliqué, determining whether anyone would have seen and relied on

that disclosure requires individual inquiry.

3. Knowledge Is Not A Common Issue.

To give rise to a duty to disclose under California law, Plaintiffs must also prove that Ford

had “exclusive knowledge” of the alleged defect. LiMandri v. Judkins, 52 Cal. App. 4th 326, 336

(1997). Plaintiffs make passing reference to Ford having “exclusive knowledge of material facts

through pre-release testing, warranty claims, aggregate data from Ford dealers and other internal

sources.” (PM 31.) But even if Ford had exclusive knowledge of those sources of data, the record

makes clear that many of the Plaintiffs and putative class members had knowledge of the alleged

defect from other sources. Moreover, to be a common issue, Plaintiffs must show that Ford

maintained “exclusive knowledge” throughout the putative class period, which is 14 years long and

counting.

The cracked appliqué is not a hidden condition. It can be observed on any vehicle that has a

crack, and, if the problem is as prevalent as Plaintiffs claim it is, would be easy to see in everyday

driving on the roadways. As discussed above, several of the declarants purchased their vehicles with

a crack, and others knew that the appliqué could crack (and even asked the seller about it) but

nevertheless decided to purchase their vehicles. Plaintiffs also allege that the NHTSA database has

“337 unique complaints” from consumers regarding the subject vehicles, including from some who

supposedly were concerned about safety. (PM 2-3.) Plaintiffs further allege that there were “well

over 1,000” reports of the cracked appliqué on various Internet websites. (TCAC ¶ 84.) In fact,

several of the Plaintiffs testified that they readily found information about the cracked appliqué on

the Internet. (Denning 73:19-74:2; Morelli 48:20-51:14; Ware 162:14-21.) Ford also issued five

TSBs, which are publicly available on various websites, including NHTSA’s website. Indeed, New

Jersey Plaintiff Brian Martin found the TSB online when he was looking for information about the

appliqué, and the same information obviously was available to California class members on the

Internet. (Martin 215:10-14, 233:13-21.) Accordingly, the evidence shows that Ford’s knowledge


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was not exclusive throughout the class period.

4. The Statute Of Limitations Is Not A Common Issue.

Determining whether each class member’s claim is barred by the statute of limitations also

would require a fact-intensive, individualized inquiry, and thus defeats predominance. See, e.g.,

Quezada v. Loan Ctr. Of Cal., Inc., 2009 U.S. Dist. LEXIS 122537, at *29 (E.D. Cal. Dec. 17,

2009); O’Connor v. Boeing N. Am., Inc., 197 F.R.D. 404, 414 (C.D. Cal. 2000). The Plaintiffs’

CLRA and UCL claims are subject to three and four year statutes of limitations, respectively. Cal.

Civ. Code § 1783; Cal. Bus. & Prof. Code § 17208. Because the class vehicles began to be sold in

2001, and the first class action lawsuit was not filed until June 2011, the claims of many class

members are likely barred. Indeed, this Court already has held that Nettleton’s CLRA claim is

barred by the statute of limitations, and the Court would have to make the same determination as to

the claims of each class member. (ECF 162, at 15-16; ECF 182, at 9.).

Plaintiffs may argue that the respective statutes of limitations were tolled by the discovery

rule or the fraudulent concealment doctrine.10 But applying either of these tolling doctrines only

further increases the individualized nature of the inquiry because they focus on when each class

member knew, or should have known, of the alleged fraud. As this Court has held, “[i]n order to

invoke the discovery rule, the plaintiff must plead and prove facts showing: (a) lack of knowledge;

(b) lack of means of obtaining knowledge (in the exercise of reasonable diligence the facts could

not have been discovered at an earlier date); and (c) how and when he did actually discover the

fraud or mistake.” (ECF 162, at 15 (citation omitted).) The fraudulent concealment doctrine requires

proof of “(1) when the fraud was discovered; (2) the circumstances under which it was discovered;

and (3) that the plaintiff was not at fault for failing to discover it or had no actual or presumptive

knowledge of facts sufficient to put him on inquiry.” (Id. at 16 (citation omitted).) These elements

cannot be proven with common evidence. Indeed, a “plaintiff must affirmatively excuse his failure

to discover the fraud . . . by showing that he was not negligent in failing to make the discovery

10 The discovery rule does not apply to UCL claims. See Yumul v. Smart Balance, Inc., 733 F.Supp.2d 1134, 1141 (C.D. Cal. July 30, 2010) (holding that “only fraudulent concealment and notdelayed discovery could toll claims under the UCL”) (citing Karl Storz Endoscopy-Am., Inc. v.Surgical Techs., Inc., 285 F.3d 848, 857 (9th Cir. 2002).)


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sooner and that he had no actual or presumptive knowledge of facts sufficient to put him on

inquiry.” Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1024 (9th Cir. 2008); see also ECF

162, at 16 (holding that Plaintiffs had failed to “plead the circumstances under which Nettleton

became aware of the defect, making it impossible to determine what information was lacking in

2008 such that she possesses neither actual nor presumptive knowledge of facts sufficient to put her

on notice as to the nature of her claim”).

Making this determination necessarily requires an examination of the knowledge of each

class member, particularly in a case like this where the alleged defect is plainly visible, information

about the cracked appliqué was publicly available from a variety of sources, and some of the

putative class members purchased their vehicles with a cracked appliqué or with knowledge of the

issue. These facts, along with the lengthy class period stretching back to 2001 and the fact that

Nettleton’s CLRA claim already has been dismissed, distinguishes this case from those where

courts have held that statute of limitations issues do not defeat a finding of predominance. See

O’Connor, 197 F.R.D. at 414 (holding that prior successful motion on statute of limitations

distinguished case from those cases where the statute of limitations was merely “an untested

affirmative defense”).

For example, in Keegan v. Am. Honda Motor Co., 284 F.R.D. 504 (C.D. Cal. 2012), the

court certified UCL and CLRA cases despite acknowledging the individualized nature of the statute

of limitations inquiry. But in that case the proposed class involved 2006-2008 vehicles, and the

complaint was initially filed in 2010, making it likely that the vast majority of the class had

purchased their vehicles within three to four years of filing. Id. at 511 & n.1 Moreover, none of the

California plaintiffs in Keegan were time-barred, and there was no evidence that any of the putative

class members had purchased vehicles with knowledge of the alleged defect. Id. at 513. Finally, the

court even recognized that certifying a class with members who were barred by the statute of

limitations would “require further proceedings in a second phase [after the liability phase] to

determine which California plaintiffs can assert a UCL claim based on their date of purchase or

lease, and which can assert a CLRA claim based on the delayed discovery rule.” Id. at 545 n.135.

The court did not explain how such an approach would be manageable and efficient, and it certainly


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would not be manageable here. There are hundreds of thousands of vehicles in the proposed

California class—some with multiple owners, each who is a putative class member—so following

the same approach here would mean the statute of limitations would require a massive trial unto

itself. Each class member would have to present proof—subject to cross-examination by Ford—to

show that he or she was not barred by the statute of limitations. In sum, based on the facts of this

case, individual issues predominate on the statute of limitations.

5. Whether Each Class Member Is A “Consumer” For Purposes Of TheCLRA Is Not A Common Question.

“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); In re Ford Motor Co. E-350

Van Prods. Liab. Litig., 2010 U.S. Dist. LEXIS 68241, at *39 (D.N.J. July 9, 2010) (applying

California law).

The proposed class in this case includes all current and former owners and lessees of the

subject vehicles. Thus, it includes businesses and government entities that clearly are barred from

bringing a CLRA claim. The proposed class also includes individuals who purchased their vehicles

for a mix of business and personal use, which will require an even more extensive individual

analysis. Morelli’s experience is a good example. He uses his 2003 Explorer in his property

management and real estate brokerage businesses, and depreciates the vehicle as a business

expense, but also uses his vehicle for personal use. (Morelli 28:11-32:11.) Ford has moved for

summary judgment on his claim because his particular testimony reveals that the primary use of his

vehicle is for business, rather than personal use. See Cal. Civ. Code § 1761(a) (providing that the

CLRA only applies where the goods are used “primarily” for personal purposes). For others, their


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particular testimony and documentation may reveal that their primary use is personal. This “analysis

demonstrates how this legal requirement will require an individual examination of the purpose for

which each [vehicle] was acquired.” Arabian v. Sony Elecs., Inc., 2007 U.S. Dist. LEXIS 12715, at

*44 (S.D. Cal. Feb. 22, 2007). Plaintiffs’ motion does not even address this issue, even though it is

their burden to demonstrate that all of the requirements of Rule 23 have been met. See Ewert, 2010

U.S. Dist. LEXIS 108838, at *27 (“By failing to show how class members’ consumer status can be

determined without individualized inquiry, plaintiffs have failed to meet their burden of establishing

that common questions of law and fact predominate. . . . The court therefore denies class

certification of the CLRA claim.”) Accordingly, class certification should be denied on the CLRA

claim.

6. Restitution Damages Under The UCL And CLRA Cannot BeDetermined With Common Evidence.

The UCL does not authorize any monetary remedy, other than restitution. Korea Supply Co.

v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1146-47 (2003). And while the CLRA provides for

money damages, the Court already has held that Plaintiffs are barred from seeking money damages

or restitution under the CLRA because they failed to provide pre-suit notice. (ECF No. 182, at 8.)11

Thus, the Plaintiffs and the putative California class are limited to seeking restitution under the

UCL. In Korea Supply, the court held that the 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 could not “be traced to any particular funds in [the defendant’s]

possession.” Id. at 1149, 1150. Recovery of restitution under the UCL requires Plaintiffs to identify

money or property that can “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 In re Ford Motor Co. E-350 Van Prods. Liab. Litig. (No. II), 2010 U.S. Dist.

LEXIS 68241, at *47-*49 (holding that plaintiff had failed to show that the funds it paid to a

dealership could be traced to Ford). Moreover, restitution must be “based on a specific amount

11 Plaintiffs seek injunctive relief in the form of a court-ordered recall. (PM 32.) As discussedbelow, even if the Court has authority to require a recall, granting such relief would render the classunmanageable.


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found owing.” Colgan, 135 Cal. App. 4th at 699.

Applying these elements to the facts of this case show that recovering restitution will require

individualized evidence. Ford sells vehicles to independently owned dealerships, not directly to

consumers. So even for Plaintiffs and those class members who purchased their vehicles from a

Ford dealer, they cannot trace any money they paid for the vehicle back to Ford. And even if they

could, it would not answer the question of restitution for members of the putative class who

purchased their vehicles from non-Ford dealerships, used car lots, or individuals (who themselves

are class members). Indeed, “class members who were sellers during the class period are in

irreconcilable conflict with putative class members who were buyers during the class period.”

Montgomery v. New Piper Aircraft, 209 F.R.D. 221, 226 (S.D. Fla. 2001).

Plaintiffs also have not established a class-wide methodology for calculating restitution.

This Court has held that “[t]he difference between what the plaintiff paid and the value of what the

plaintiff received is a proper measure of restitution.” Ries v. Ariz. Bevs. USA LLC, 2013 U.S. Dist.

LEXIS 46013, at *22 (N.D. Cal. Mar. 28, 2013) (citation omitted). Plaintiffs rely on the report of

their purported expert, Richard Hixenbaugh, who opines that the alleged defect resulted in an across

the board 15% loss in value, calculated from the original purchase price. (PM 33.) Ford has

separately filed a Daubert motion to exclude Hixenbaugh’s testimony, but even if his testimony is

admitted, his methodology is so fundamentally flawed that Plaintiffs have failed to meet their

burden of establishing a class-wide method for proving restitution. See in Re Optical, 303 F.R.D. at

323-25 (denying Daubert motions but nevertheless holding that class certification was inappropriate

because plaintiffs’ damages experts had failed to show that damages could be calculated on a class-

wide basis).

Hixenbaugh’s opinion is built upon assumptions that either have no basis in fact or are

directly contradicted by the evidence. He starts with the faulty premise that “there was a relevant

fact that was known only by one side in the transaction and not disclosed to prospective buyers,

namely, a manufacturing defect that Ford knew about at the time of the initial sale of these

vehicles.” (Hixenbaugh Rpt. ¶ 19.) As already discussed above, the evidence shows that several of

the declarants purchased vehicles that had a cracked appliqué at the time of purchase. And other


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purchasers knew about the appliqué issue from seeing it on other vehicles before making their

purchase, because they were told about it by the seller, or because they discovered it on the Internet.

Indeed, Hixenbaugh contradicts himself by noting that there are several websites that discuss the

issue, and that he personally has seen several vehicles with cracked appliqués, as did some of the

Plaintiffs. (Id. ¶ 20; Nettleton 137:6-9; Ware 118:2-12.) Moreover, Hixenbaugh incorrectly claims

that Ford “did not notify its dealers’ service departments” about the alleged defect, but as Plaintiffs

themselves acknowledge, “Ford notified its dealers” by issuing TSBs, and of course dealerships

were repairing the appliqué so they certainly knew about it. (PM 19.) This is critical because Ford

dealerships operate as both buyers and sellers of the vehicles, and thus are key players in

establishing market value. (Harless & Hoffer Decl. ¶ 30(e).) Hixenbaugh simply ignores the

involvement of Ford dealerships and other knowledgeable parties.

From these faulty assumptions, Hixenbaugh proceeds to pluck a number from thin air,

opining that the potential for the appliqué to crack caused a 15% loss of value, calculated from the

initial purchase price, and that this applies to all new and used vehicles in the class. (Hixenbaugh

Rpt. ¶ 30.) He cites no authority, and provides no explanation, for how he reached this number,

other than that in his “experience” defects can result in a 2% to 40% loss in value, so he just picked

15% for this case. In so doing, he ignores the actual data, which show that that there has been no

diminution in the average market value for the class vehicles. (Harless & Hoffer Decl. ¶ 23.) And he

ignores the fact that the sales price of any particular vehicle requires an inherently individualized

inquiry that will depend on a variety of factors, including the negotiating skills of the buyer and

their particular needs and desires (Id. ¶¶ 7-10, 26, 35.) For example, Plaintiff Spencer Ware found

the size, towing ability and keyless entry features to be central to his purchasing decision, whereas

the utilitarian, stripped down aspect of the base model was important for James Denning, while

Brian Martin wanted a new vehicle from the previous model year that had yet to be sold because it

was less expensive. (Ware 38:10-21, 41:7-42:3; Denning 36:18-37:1; Martin 45:11-46:1).

Moreover, for used vehicles, even Hixenbaugh acknowledges that various factors can affect price,

including “foul odor, unrepaired damage, soiling or excessive wear to interior, damage or collision

history, flood history” and other factors. (Hixenbaugh Rept. ¶ 28.) His methodology does not


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account for any of these factors, nor any other differences among the class. He never even mentions

lessees, who obviously could not have experienced any loss in value because they never owned the

car. If there really were a loss in value, it is the lessor who would have sustained injury, not the

lessee.

Hixenbaugh’s own report readily demonstrates the illogical and arbitrary results of applying

his methodology. He provides an example of a purchaser who paid $30,000 for a vehicle, and later

sold that vehicle to another class member for $23,000. (Hixenbaugh Rpt. p. 6.) According to

Hixenbaugh, each of the class members is entitled to share in a 15% loss in value calculated off the

original purchase price. This results in the original purchaser receiving $1,053 in damages, while

the second owner receives $3,347 in damages—even though he purchased an older vehicle. And if

the vehicle is sold a third time for $15,000, the original purchaser still receives $1,053, the second

purchaser now receives $1,206, and the third purchaser receives $2,241. (Id.) As another example,

if a 2002 Ford Explorer originally was sold for $30,000 and then was re-sold in December 2014 for

the bluebook value of $1,025, both the original purchaser and the second purchaser would receive

$4,500 in damages. In other words, based on the possibility the appliqué (a $500 repair at most)

could crack, the second purchaser would receive damages in an amount four times greater than the

value of the entire vehicle. (Harless & Hoffer Decl. ¶ 28(a).) Thus, Hixenbaugh’s methodology

illogically and arbitrarily results in providing those with the oldest vehicles the highest

compensation, even though at that point the vehicle is worth less and is much more likely to have a

variety of cosmetic issues that render a cracked appliqué (much less the mere potential for a cracked

appliqué) unimportant to the owner. See, e.g., Martin 217:12-218:3 (referring in 2013 to his 2002

Mountaineer, which has a cracked appliqué: “[i]t’s an older vehicle. There are other cosmetic issues

with it now. So visually the crack does not concern me that much.”)

Hixenbaugh’s methodology also does not account for whether the class members had

knowledge of the issue prior to purchase, or whether the appliqué ever cracked and, if it did, who, if

anyone, incurred the expense. Applying these facts to Hixenbaugh’s model further demonstrates its

flaws, and shows that such differences will result in intra-class conflict. Assume, for example, that

neither the first nor second owner knew about the alleged defect at the time of purchase, but that the


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crack developed while the second owner had the vehicle, and the vehicle was out of warranty so he

repaired it at his own expense. The second owner then sells the vehicle to a third class member who

is aware of the alleged defect and demands a lower price. In that scenario, the first owner gets

$1,053 in damages, even though the appliqué never cracked and he sold the vehicle at full value.

The second owner incurs the expense of repairing the cracked appliqué and receives a lower sales

price (assume the price is $15,000.) The second owner still receives $1,206, and the third owner still

receives $2,241. The third owner receives the largest share of damages despite the fact that he

incurred no expenses for repairing the appliqué and even negotiated a lower price. Class

certification should be denied where such intra-class conflicts exist. See Montgomery, 209 F.R.D. at

226.

Plaintiffs do not even attempt to address these issues, simply stating that whatever one

thinks of Hixenbaugh’s conclusions, his methodology can be applied class-wide. (PM 33.) But in

Comcast, the Supreme Court specifically rejected the argument that “any method of measurement is

acceptable so long as it can be applied class-wide, no matter how arbitrary the measurement may

be.” 133 S. Ct. at 1433. To accept such arbitrary measurements “would reduce Rule 23(b)(3)’s

predominance requirement to a nullity.” Id. Hixenbaugh’s damages model is a quintessential

example of the type of arbitrary measurement that no longer passes muster under Rule 23. Without

any basis in fact, and by failing to account for the many individual factors that determine a

particular vehicle’s value, he has failed to show that restitution can be determined on a class-wide

basis.

C. Plaintiffs Have Failed To Establish Commonality Or Predominance For TheirSecret Warranty Claim.

Ford has moved for summary judgment on Plaintiffs’ claim under California Civil Code

1795.90, et seq., commonly referred to as the Secret Warranty law, because there is no evidence that

Ford had any “adjustment program” for appliqué repairs. In fact, the undisputed evidence, including

the TSBs, conclusively demonstrates that Ford’s policy was consistent with the terms of the

warranty—i.e., to cover the cost of repairing the appliqué during warranty period, but not after.

However, even if summary judgment is not granted, Plaintiffs have failed to show that a class can


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be certified on this claim. Plaintiffs simply brush aside their obligation to show that each of their

claims meets the Rule 23 requirements, stating that “[t]he facts and legal issues relating to

Plaintiffs’ Secret Warranty Claim are the same as those facts and issues to be determined on the

consumer fraud causes of action.” (PM 33.) Such boilerplate does not even begin to address the

individual issues that a claim under the Secret Warranty law raises, which by its very nature is

highly individualized.

As an initial matter, Plaintiffs have not offered any evidence (because there is none) of when

the “adjustment program” supposedly was adopted, nor any evidence regarding the model and

model year vehicles to which the purported adjustment program applied. This basic information is

critical to determining who can even assert such a claim because the manufacturer’s obligations

under the statute are triggered by the date on which the manufacturer adopts the adjustment program

and would only apply to the particular model and model year vehicles covered by the program. See

Cal. Civ. Code § 1795.2. Moreover, the Secret Warranty law does not provide for general money

damages, but instead is limited to reimbursement for those individuals who incurred expenses for

repairing a condition subject to the adjustment program. Trew v. Volvo Cars of N. Am., 2006 U.S.

Dist. LEXIS 4890, at *13 (E.D. Cal. Feb. 8, 2006.) Even if Ford had an adjustment program, which

it did not, a large percentage of the class would have no claim, including those who never had a

cracked appliqué; those who had a cracked appliqué during the warranty period and had it covered

by Ford; those who had a cracked appliqué but never had it repaired and thus incurred no expenses;

and, those who had a cracked appliqué repaired free of charge under the purported “adjustment

program.” In short, the only class members who could assert a claim would be those who repaired

the appliqué at their own expense after the adjustment program was adopted.12 And even for those

individuals, they would have to submit proof that the cracked appliqué was caused by the alleged

12 This also shows that Nettleton’s and Morelli’s claims are not typical of the class they seek torepresent, since both were specifically denied warranty coverage because their vehicles were pastthe warranty period, and they have never had their vehicles repaired. In contrast, Denning did havehis appliqué repaired, but because Plaintiffs offer no evidence of when the adjustment programsupposedly began, there is no way for the Court to determine whether he is part of the class that heseeks to represent. It is axiomatic that “a class representative must be part of the class and possessthe same interest and suffer the same injury as the class members.” Amchem Prods. v. Windsor, 521U.S. 591, 625-26 (1997) (citation omitted).


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defect, rather than by an accident or vandalism, and the expenses they incurred would have to be

tallied on an individual basis. Such highly individualized issues defeat commonality and

predominance.

VI. CERTIFICATION OF THE FLORIDA CLASS SHOULD BE DENIED FOR LACKOF COMMONALITY AND PREDOMINANCE

A. Facts Relating To Florida 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).13 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.) But even though he

had experienced the crack in his 2003 Aviator and paid out-of-pocket to repair it, 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). He has not had the

appliqué repaired. (Id. 108:23-109:19-23.) Despite not having the appliqué repaired, the liftgate

glass has never shattered or come loose, nor has the applique fallen off. (Id. 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. Plaintiff’s FDUTPA Claim Fails To Meet The Commonality Or PredominanceRequirements.

1. Causation Is Not A Common Issue

A plaintiff seeking damages under FDUTPA must prove three elements: (1) a deceptive act

or unfair practice; (2) causation; and (3) actual damages. Rollins, Inc. v. Butland, 951 So. 2d 860,

869 (Fla. Dist. Ct. App. 2006). Even if Dery had a personal claim, which he does not, a FDUTPA

claim cannot be certified because individual issues predominate on causation. Dery’s principal

argument is that FDUTPA does not require proof of reliance and that all he must show is that Ford’s

13 Dery’s claims against Ford relating to his 2003 Lincoln Aviator were dismissed as time-barred,and thus his claims are limited to his 2005 Aviator. (ECF 162.)


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failure to disclose would deceive a reasonable consumer, citing Davis v. Powertel, 776 So. 2d 971

(Fla. App. 2000) and Latman v. Costa Cruise Lines, N.V., 758 So. 2d 699 (Fla. Dist. Ct. App. 2000).

(PM 34.) However, Davis and Latman have been criticized and distinguished by numerous Florida

cases for failing to consider the causation requirement under FDUTPA. See Miami Auto. Retail, Inc.

v. Baldwin, 97 So. 3d 846, 857 (Fla. Dist. Ct. App. 2012); Egwuatu v. South Lubes, Inc., 976 So. 2d

50, 53-54 (Fla. App. 2008); Kia Motors Am. Corp. v. Butler, 985 So. 2d 1133, 1140-41 (Fla. Dist.

Ct. App. 2008); Rollins, Inc. v. Butland, 951 So. 2d 860, 871-76 (Fla. Dist. Ct. App. 2006); Philip

Morris USA Inc. v. Hines, 883 So. 2d 292, 294-95 (Fla. Dist. Ct. App. 2003); Hutson v. Rexall

Sundown, Inc., 837 So. 2d 1090, 1092-93 (Fla. App. 2003); see also In re Ford Motor Co. E-350

Van Prods. Liab. Litig., 2012 U.S. Dist. LEXIS 13887, at *109 (D.N.J. Feb. 6, 2012)., The weight

of recent authority makes clear that a plaintiff must prove causation.

Causation is not a common issue in this case for three reasons. First, the evidence shows that

Dery and other members of the putative class had knowledge of the alleged defect, and thus they

cannot show that the failure to disclose information they already knew caused them any harm.

Second, Florida law only permits those individuals whose vehicles actually have developed a

cracked appliqué as a result of the alleged defect to assert a claim. Third, whether class members

would have seen a disclosure if provided is not a common issue.

a. Whether Class Members Had Pre-Purchase Knowledge of TheAlleged Defect Is Not A Common Issue.

Courts applying Florida law repeatedly have held that whether a class member had

knowledge of the allegedly undisclosed information prior to purchase is an individual question that

defeats class certification. For example, in Kia Motors Am. Corp., the plaintiffs alleged that Kia had

failed to disclose that certain vehicles had a brake system defect that caused premature wear of the

front brakes. 985 So. 2d at 1135. The trial court certified a class under FDUTPA, but the state

appellate court reversed, holding that “[t]he FDUTPA class claim fails in this case on both the

causation and actual damages elements.” Id. at 1140. The court held that among the individual

issues that would need to be decided was “whether the purchaser had knowledge of the alleged

brake defect and purchased the vehicle despite such knowledge.” Id.


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Similarly, in Porsche Cars N. Am., Inc. v. Diamond, 140 So. 3d 1090, 1093 (Fla. Dist. Ct.

App. 2014), the plaintiffs alleged that the headlights on the class vehicles were more susceptible to

theft because they were mounted on modules that made them cheaper to install and repair. The

appellate court held that the class could not be certified because an “individual class member’s

knowledge of the risk of theft goes to the heart of his or her [FDUTPA] claim.” Id. at 1098; see also

In re Ford Motor Co. E-350 Van Prods. Liab. Litig., 2012 U.S. Dist. LEXIS 13887, at 112-113

(denying class certification of a FDUTPA class because, among other reasons, some members had

“pre-existing knowledge of the alleged defect from personal use and/or public reports”); Pop's

Pancakes, Inc. v. NuCO2, Inc., 251 F.R.D. 677, 685 (S.D. Fla. 2008) (rejecting class certification on

FDUTPA claim because some class members who knew of the allegedly deceptive inclusion of an

administrative fee in invoices for property taxes could not reasonably assert that they were likely to

be deceived by the invoice).

Here, Dery’s own testimony shows that he had knowledge of the alleged defect prior to

purchasing his 2005 Aviator because the appliqué had cracked on his 2003 Aviator. (Dery 146:23-

147:1). Moreover, as discussed above, several of the declarants purchased vehicles that had a

cracked appliqué at the time of purchase, while others knew of the alleged defect from a variety of

sources. Determining which class members had knowledge of the alleged defect prior to purchase

cannot be accomplished with class-wide evidence.

b. Whether The Appliqué Has Cracked And Why Are Not CommonIssues

In Kia Motors, the court held that it was “readily apparent” that the case could not proceed

as a class action for the additional reason that the class representatives sought “compensation not

only for class members whose brakes have manifested a deficiency, but also for those whose brakes

have performed satisfactorily.” 985 So. 2d at 1139. The court held that Florida is “firmly aligned”

with the “majority of jurisdictions” that have rejected unmanifested defect claims. Id.; see also

Breakstone v. Caterpillar, Inc., 2010 U.S. Dist. LEXIS 142220, at *16-17 (S.D. Fla. May 26, 2010)

(holding that it is “inappropriate to certify a class containing both individuals who have ‘manifested


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a deficiency’ and those whose product has performed satisfactorily’”).14 Here, the overwhelming

majority of the proposed Florida class have vehicles that have never developed a cracked appliqué

and thus have no claim. Moreover, even for those class members whose vehicles have developed a

cracked appliqué, individual inquiry would be necessary to determine the cause of the crack. See

Kia Motors, 985 So.2d at 1140 (holding that individual inquiry was required to determine the cause

of the brake condition).

c. Whether Class Members Would Have Seen Or Heard ADisclosure Is Not A Common Question.

Dery also cannot prove causation under FDUTPA on a class-wide basis because many class

members would not have seen or heard a disclosure if one had been provided. As discussed above

with respect to the California Plaintiffs’ CLRA and UCL claims, many consumers do not review or

consider warnings, even when the warnings relate to serious health issues. The same analysis

applies to the Florida class. See Montgomery, 209 F.R.D. at 229-30 (holding that whether each class

member was exposed to the defendant’s advertising and marketing materials and, if exposed,

whether the materials caused them damage “would result in a series of mini-trials”). For this

additional reason, causation cannot be proven with common evidence.

2. Materiality Is Not A Common Issue.

Under FDUTPA, a defendant only has a duty to disclose “material” facts. See Matthews v.

Am. Honda Motor Co., 2012 U.S. Dist. LEXIS 90802, *6-8 (S.D. Fla. June 6, 2012). Materiality is

not a common issue because what class members consider important to their purchase decisions will

vary. Supra § V(B)(1). Dery’s decision to purchase a 2005 Aviator after his 2003 Aviator developed

a cracked appliqué amply proves the point. Despite the cracked appliqué, Dery liked his 2003

Aviator “very much” and decided to purchase the 2005 Aviator because it included “more features”

14 In Collins v. DaimlerChrysler Corp., 894 So. 2d 988, 990-91 (Fla. App. 2004), the court held thatmanifestation of the defect was not required. But that case pre-dates Kia Motors and does notrepresent current Florida law. As the court recognized in In re Toyota Motor Corp. UnintendedAcceleration Mktg., 2012 U.S. Dist. LEXIS 189744 (C.D. Cal. May 4, 2012), “Florida courts havefollowed a different path as to the manifestation of defect issue since Collins.” Id. at *241. Like thecourt in In re Toyota, this Court should follow the more recent Florida case law, which makes clearthat manifestation of the defect is required to state a claim under FDUTPA.


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than the 2003 model. (Dery 61:1-10) Many Florida class members likely would determine, like

Dery, that the possibility the appliqué may one day crack does not outweigh the benefits that the

Aviator offers. The fact that several of the declarants purchased vehicles with a cracked appliqué, or

knowledge that it could occur, shows that they also did not consider the issue important. Others may

disagree, but that could only be determined through individual inquiry. See Philip Morris, 883 So.

2d at 294 (holding that the need to individually determine the “smoker’s reasons for choosing to

smoke ‘light’ cigarettes” precluded certification of FDUTPA class).

3. The Statute Of Limitations Is Not A Common Issue.

FDUTPA claims are subject to a four year statute of limitations that runs from the date of

purchase. Fla. Stat. 95.11(d)(f); S. Motor Co. of Dade Cnty. v. Doktorczyk, 957 So.2d 1215, 1217

(Fla. Dist. Ct. App. 2007) (holding that FDUTPA claim accrues at time vehicle was purchased).

This Court previously dismissed the claims of former Florida Plaintiff Lynne Benson, who

purchased a new 2005 Explorer in 2006. (ECF 162, at 14.) The Court also dismissed Dery’s claims

to the extent they related to his 2003 Aviator, which he purchased used in 2006. (Id.) The Court

would have to conduct the same analysis to determine whether the claims of each of the Florida

class members are barred. Such an individualized inquiry defeats a finding of commonality or

predominance.

4. Damages Is Not A Common Issue.

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

the product or 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,

951 So. 2d at 869. Dery has failed to show how such damages can be calculated on a class-wide

basis. As discussed above, Hixenbaugh’s methodology is fundamentally flawed, and those same

flaws exist when applied to the proposed Florida class. Moreover, Florida courts have recognized

the inherently fact-specific nature of determining damages under FDUTPA in cases, like this one,

that involve an allegedly defective product.

In Montgomery, the plaintiff brought a class action on the basis that certain aircrafts

manufactured by the defendant contained defective engines. 209 F.R.D. at 223-25. The court held


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that

[c]alculating damages under FDUTPA requires an in-depth analysisof market value depletion due to the “deceptive” trade practice. Suchan inquiry automatically invokes an aircraft-by-aircraft inquiry into(1) when and where each plane was purchased, (2) when the planewas sold (if applicable), and (3) the current market value of eachplane.

Id. at 230.

Similarly, in Kia Motors, the court held that damages under FDUTPA raised individual

issues such as “whether an individual vehicle suffered diminished value as a result of the alleged

deficiency if the deficiency was repaired” and “whether the purchase price of the vehicle reflected

the alleged defect at the time it was purchased.” 985 So.2d at 1140. As discussed above, these are

among the many factors that Hixenbaugh’s methodology does not even consider. Even Dery agrees

that he did not sustain any loss in value when he sold his 2003 Aviator (with a previously repaired

appliqué) and that if he repairs his 2005 Aviator, it will not be worth any less. (Dery 30:23-31:1;

110:9-11.) Accordingly, Dery has failed to show that damages can be calculated on a class-wide

basis under FDUTPA.

VII. CERTIFICATION OF THE NEW JERSEY CLASS SHOULD BE DENIED FORLACK OF COMMONALITY AND PREDOMINANCE.

A. Facts Relating To The New Jersey Plaintiffs

1. Spencer Ware

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

from Holman Ford. (Ware 31:24-32:2, 37:2-8.) He had previously owned a 1996 Explorer and

wanted another Explorer because of its size, towing ability, and keyless entry. (Id. 38:10-21, 41:7-

42:3.) He did not do any research before purchasing the 2004 Explorer, nor did he look at a

brochure. (Id. 43:12-25, 47:4-9.) He may have seen some advertising, but he does not remember

anything specific and any advertising he did see or hear had no influence on his purchase decision.

(Id. 46:12-47:3.) Prior to purchase, Ware did not ask the salesperson about any repairs to the 2004

Explorer. (Id. 50:13-18.) He has never been told prior to purchasing any mechanical or electronic

product any of things that could go wrong with the product. (Id. 134:5-135:7.)


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The Ford New Vehicle Limited Warranty had expired by the time Ware purchased the 2004

Explorer, but he purchased an Extended Service Plan (“ESP”) because “[c]ars break down.” (Id.

58:1-60:7, 62:9-11.) Ware understood that the ESP did not guarantee that the 2004 Explorer would

be free from defects. (Id. 63:2-12.) As Ware put it, “[a]ll vehicles need repair at some point” and the

warranty is “not a guarantee nothing would go wrong. Cars break down like I said. Things happen.”

(Id. 53:15-16, 63:9-12.) He understood that he would be responsible for the cost of any repairs that

fell outside of the ESP. (Id. 53:15-16, 63:19-22.)

The appliqué cracked on Ware’s vehicle in January 2011, when it was 7 years old.. (Id.

76:21-23.) However, he was aware of the issue for “probably a year” before then because he had

seen other Explorers with a cracked appliqué and it became a “game” between him, his wife, and

his kids to spot other Explorers with a cracked appliqué. (Id. 118:2-12.) He anticipated his appliqué

would crack at some point, but kept his vehicle anyway. (Id. 118:17-23.)

Ware has not had the appliqué repaired on his now 11-year old vehicle. (Id. 77:14-18.) He

also has not repaired dents and gouges to his rear bumper and tailgate that were caused by a drill

press that slid forward into the rear of his vehicle when he was towing it on a utility trailer, other

than applying some touch-up paint himself. (Id. 89:17-92:13.) 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 also had some cosmetic problems with his 1996 Explorer, but he was not concerned

about it because he drove it “until it had no value anyway,” and he simply gave it to someone in his

church. (Id. 40:18-41:6.) Similarly, he plans to keep his 2004 Explorer until it has no value. (Id.

94:4-14.)

2. Brian Martin

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

42:13-22.) He was looking for a “leftover”—i.e., a vehicle from the previous model year that had

yet to be sold—because it was less expensive. (Id. 45:11-46:1.) The 2002 Mountaineer that he

ultimately purchased had been used as a “demonstrator” model at the dealership and had over 5,800

miles. (Id. 43:4-15.) The vehicle also had sustained hail damage that the dealership repaired prior to


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sale. (Id. 44:7-45:5.) Prior to purchase, Martin researched reliability and safety information for the

Ford Explorer and Mercury Mountaineer on the Internet, including Consumer Report and Edmunds.

(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.)

Martin’s 2002 Mountaineer came with the Ford New Vehicle Limited Warranty, and Martin

purchased an ESP shortly before the original warranty expired. (Id. 76:22-77:2, 84:14-21.) Martin

purchased the ESP for “peace of mind” to protect against “unforeseen or unexpected breakdowns”

of his vehicle. (Id. 84:22-85:15.) He understood that the new vehicle warranty and the ESP were not

guarantees that his Mountaineer would never require repairs, and that once the warranties expired,

he would be responsible for the cost of repairs. (Id. 94:3-95:3.) In the TCAC, Martin alleges that the

appliqué cracked in early 2008 (TCAC ¶ 211), although in his deposition he testified that it may

actually have been sometime in the winter of 2006. (Martin 127:21-128:2.)

Martin considers the Mountaineer the “family vehicle” because it is the vehicle in which he

and his wife transport their two young children, and while he is 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. (Id.

12:21-22, 147:12-15.) In August 2011, Martin looked into having the appliqué repaired at a cost of

approximately $600, but decided against having it done due to the cost and inconvenience. (Id.

142:4-143:9.) Even if Ford agreed to repair it now at no cost, he would not have the repair done

because “[i]t’s an older vehicle. There are other cosmetic issues with it now. So visually the crack

does not concern [him] that much.” (Id. 217:12-218:3.) And even if he can get the cash value of the

repair from this lawsuit, he would “more than likely” not have the repair done. (Id. 218:4-9.)

In fact, while Martin continues to drive his vehicle today, his vehicle only has salvage value.

In October 2012, Hurricane Sandy flooded Martin’s vehicle. (Id. 189:19-191:14.) His insurer,

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

for too long, but Martin wanted to keep the vehicle. (Id. 194:16-195:11.) Progressive paid Martin

$5,270.03, which represented the market value of the vehicle minus the salvage value. (Id. 195:18-

198:1; Tew Decl. Ex. 55.) Martin says that a Progressive representative told him that the value of

his vehicle was reduced by the presence of the cracked applique. (Martin 207:18-208:6.) However,


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documents subpoenaed from Progressive show that Progressive actually increased the payout for

Martin’s Mountaineer by $379 because it was in better condition than its peer vehicles, including

receiving a “very good” rating for the condition of the body when peer vehicles only had an

“average” rating. (Tew Decl. Ex. 55.) And Progressive made no deduction for “prior damage.” (Id.)

Martin continues to drive his family in the Mountaineer and, despite receiving the payout of $5,270,

he has not had the applique repaired. (Martin 147:12-15, 214:13-18.)

B. Individual Issues Predominate On Plaintiffs’ CFA Claim

1. Whether The Defect Has Manifested Is Not A Common Issue

Manifestation of the alleged defect is required to recover under the CFA. Green v. Green

Mt. Coffee Roasters, Inc., 279 F.R.D. 275, 284-85 (D.N.J. 2011); Green v. GMC, 2003 N.J. Super.

Unpub. LEXIS 13, at *23 (App. Div. July 10, 2003). Not surprisingly, therefore, New Jersey courts

repeatedly have held that “proving a defect is a highly individualized inquiry unsuitable for class

treatment,” and that common issues do not predominate if the class includes significant numbers of

class members whose products have not manifested the alleged defect. Green Mt. Coffee, 279

F.R.D. at 284 (denying certification of CFA claim because “Plaintiff actually acknowledges that

there are members in the putative class who have not yet ‘suffered pump failure.’ Consequently, the

putative class includes individuals who do not presently have a claim against Defendants.”); Laney

v. Am. Std. Cos., 2010 U.S. Dist. LEXIS 100129, at *52 (D.N.J. Sept. 23, 2010) (denying

certification of CFA claim because plaintiff “cannot demonstrate that each class member’s product

manifested the actual defect”); Payne v. FujiFilm U.S.A., Inc., 2010 U.S. Dist. LEXIS 52808, at *17

(D.N.J. May 28, 2010) (denying certification of CFA and breach of implied covenant of good faith

claims because the court would have to determine which class members’ cameras had actually

malfunctioned as a result of the alleged defect); Chin v. Chrysler Corp., 182 F.R.D. 448, 455

(D.N.J. 1998) (“Proving a class-wide defect where the majority of class members have not

experienced any problems with the alleged defective product, if possible at all, would be extremely

difficult.”).

In Payne, the plaintiffs brought a class action under the CFA on the basis that the defendant

had failed to disclose that certain cameras contained a defective power assembly that could result in


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a loss of power. 2010 U.S. Dist. LEXIS 52808, at *1-2. The court noted that only one to two percent

of the cameras had been returned for any kind of power problem, and thus it was “faced with an

alleged class-wide defect that has not manifested in the great majority of the proposed class.” Id. at

*14-15. The court held that individual issues predominated because to certify a class it would have

to “determine the few that suffered malfunctions, then determine which of those suffered ‘power

related’ malfunctions, and then determine which of those ‘power related’ malfunctions are

attributable to the alleged joint solder defect as opposed to the variety of other reasons for such

power problems.” Id. at *17.

The same problems exist in this case. As discussed above, Ford’s records show that the vast

majority of the vehicles have not sustained a cracked appliqué. See supra §III(B)-(C). Indeed, the

individuality of this issue is exemplified by Brian Martin, whose own brother 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.) And even for those few class members whose

vehicles did develop a cracked appliqué, it would have to be determined on an individual basis

whether the crack was caused by the alleged defect versus an unrelated issue. Marcus v. BMW of N.

Am., LLC., 687 F.3d 583, 604 (3d Cir. 2012) (holding that “claims require an individualized inquiry

into why any particular consumer’s [tire] went flat and had to be replaced”); Maloney v. Microsoft

Corp., 2012 U.S. Dist. LEXIS 28676, at *22 (D.N.J. Mar. 5, 2012) (denying class certification even

where plaintiff had defined the class to only include those whose product had failed because

determining the cause of failure was an individual issue). These issues cannot be resolved with

common proof and thus class certification should be denied.

2. Causation Is Not A Common Issue

Under the CFA, Plaintiffs must show that Ford’s failure to disclose the alleged defect

proximately caused them and the putative class to sustain an ascertainable loss. Marcus, 687 F.3d at

606. Plaintiffs cannot prove causation on a class-wide basis for two reasons. First, information

about the alleged problem has been publicly available for years and Plaintiffs’ own evidence

establishes that individuals purchased the vehicles with knowledge of the alleged defect. Second,

even if Ford had made a disclosure, Plaintiffs cannot show that all of the class members would have


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seen and relied on that disclosure.

a. The Allegedly Undisclosed Information Was Knowable

Plaintiffs’ acknowledge that they must prove causation, but argue that a presumption of

causation should apply, citing Varacallo v. Mass. Mut. Life Ins. Co., 752 A.2d 807 (N.J. Super. Ct.

App. Div. 2000). (PM 36.) However, in Marcus, the Third Circuit directly addressed Varacallo and

explained why no presumption of causation applied to the CFA claim. In Marcus, the plaintiff

alleged that BMW had failed to disclose that run-flat tires (“RFTs”) on certain vehicles were

defective because they were prone to going flat. 687 F.3d at 588. The district court certified the

class, holding that a presumption of causation should apply to the CFA claim because the claim was

based on an alleged omission. Id. at 607. The Third Circuit reversed, holding that “[w]hat a

consumer knew about Bridgestone RFTs prior to purchasing or leasing his or her car is highly

relevant to whether that consumer can succeed on an NJCFA claim.” Id. Specifically, the court held

that if the evidence showed that information about the alleged defects was knowable to a significant

number of putative class members and the class members chose to purchase their vehicles anyway,

“then common questions of facts will not predominate.” Id. at 607-08. The court reviewed the key

New Jersey cases on point and held that those cases recognized that before applying a presumption

of causation under the CFA, a court “must consider whether plaintiffs could have known the truth

underlying the defendant’s fraud.” Id. at 610. The court distinguished Varacallo, noting that in that

case, which involved “vanishing premium” life insurance policies, “there was no evidence that class

members could have known the truth” and it was “inconceivable that more than a very small

number would have purchased their policies” if they had known the stated dividend rates were

inflated. Id. at 611. By contrast, in Marcus, there was evidence that information about the alleged

defects was known by some class members and some of those class members may have “decided to

purchase or lease their cars at the same price anyway.” Id.

The same is true here. As discussed above, there is ample evidence that information about

the cracked appliqué was knowable to a significant number of class members, and yet many decided

to purchase their vehicles anyway. See supra § V(B)(1). Moreover, there is nothing hidden about

the alleged defect. Spencer Ware acknowledged he knew about the cracked appliqué a year before it


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happened to his vehicle. (Ware 118:2-12.) While this was after his purchase, it demonstrates that the

cracked appliqué is not a hidden condition and thus other class members may well have seen

cracked appliqués before purchasing their vehicles. Finally, Plaintiffs point to information about the

cracked appliqué that was available on five different websites, including Edmunds.com, which

some of the Plaintiffs, and likely some class members, researched prior to purchase. (TAC ¶¶ 83-84;

Dery 33:10-21; Martin 31:9-10; Morelli 84:7-11.) The TSBs also are publicly available online—

indeed, Martin found a copy of one of the TSBs when he was researching the issue on the Internet.

(Martin 215:10-14, 233:13-21.) Due process requires that Ford have the opportunity to cross-

examine class members to determine their knowledge, which would require a series of mini-trials.

Carrera v. Bayer Corp., 727 F.3d 300, 307 (3d Cir. 2013) (“A defendant in a class action has a due

process right to raise individual challenges and defenses to claims, and a class action cannot be

certified in a way that eviscerates this right or masks individual issues.”)

b. Plaintiff Cannot Establish That All Class Members Would HaveSeen Any Additional Disclosure.

Even if Ford had provided a disclosure beyond what was publicly available, determining

whether any individual class member would have seen such a disclosure requires individual inquiry

into what he or she looked at prior to purchase. See, e.g., Dewey v. Volkswagen AG, 558 F. Supp. 2d

505, 526-27 (D.N.J. 2008) (holding that causation element was not met where plaintiffs failed to

allege they looked at website or owner’s manual). There is disparity even between the two named

Plaintiffs in New Jersey. Prior to purchasing his vehicle, Ware did no research at all, and did not

look at a brochure, and thus he cannot possibly prove that he would have seen a disclosure even if it

had been provided. (Ware 43:12-25, 47:4-9.) By contrast, Martin did conduct research, including

going to the Mercury website. (Martin 48:19-49:16, 53:18-54:7.) These and other disparities

undoubtedly exist among the putative class. Thus, determining whether putative class members

would have seen a disclosure can only be accomplished through individual inquiry.

3. Materiality Is Not A Common Issue

Plaintiffs also cannot establish that information about the cracked appliqué was uniformly

material to members of the putative class. See N.J. Stat. Ann. § 56:8-2 (requiring proof of


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materiality for omissions claim). As the court explained in Oscar v. BMW of N. Am., LLC, 2012

U.S. Dist. LEXIS 84922, at *12 (S.D.N.Y. June 19, 2012)—which the Third Circuit relied on

heavily in Marcus—it was impossible to conclude that information about the alleged tire defects in

that case would have uniformly affected the purchase decision of each class member because of “(1)

the inherently individualized nature of the purchase decision, and (2) the conjectural nature of the

post hoc inquiry into how a consumer’s purchase decision might have been affected.” Id. at *12.

The purchase of a vehicle, like many products, inevitably involves trade-offs, and what is an

acceptable trade-off to one customer is not necessarily acceptable to another customer. For example,

in Marcus, the court noted that some purchasers may have found that the benefits of the tires

“outweighed their downsides,” while “[o]thers may simply have had the means to purchase or lease

the luxury car of their choice and brush off” the high replacement costs. 687 F.3d at 611-12; see

also Oscar, 2012 U.S. Dist. LEXIS 84922, at *11. The same is true here for all of the reasons

discussed above. See supra §§ V(B)(1), VI(B)(2).

4. The Statute Of Limitation Is Not A Common Issue

Plaintiffs’ CFA claim is governed by a six-year statute of limitations. See Lutzky v. Deutsche

Bank Nat’l Trust Co., 2009 U.S. Dist. LEXIS 100062, at *8 (D.N.J. Oct. 27, 2009). Determining

whether the claims of the putative class members are barred is yet another issue that will have to be

decided on an individual basis. See In re Ford Motor Co. E-350 Van Prods. Liab. Litig., 2012 U.S.

Dist. LEXIS 13887, at *136 (D.N.J. Feb. 6, 2012) (holding that statute of limitations issues

precluded finding of predominance).

5. Damages Is Not A Common Issue

Plaintiffs have failed to show that damages under the CFA can be proven on a class-wide

basis. As discussed above, Plaintiffs’ theory is that the potential for a cracked appliqué reduced the

vehicles in value by an across the board 15% off the original price regardless of whether the class

member purchased a new or used vehicle, or leased the vehicle. However, the New Jersey Supreme

Court has held that lessees cannot recover diminution in value damages. Thiedemann v. Mercedes-

Benz USA, LLC, 872 A.2d 783, 796 (N.J. 2005) (“[B]ecause [plaintiff] leases here vehicle and does

not own it, she is unable to advance an argument that she might be able to demonstrate loss in future


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resale value due to alleged, potentially defective replacement parts . . . .”) Moreover, with regard to

purchasers, Hixenbaugh’s methodology is arbitrary and illogical for all of the reasons discussed

above, and thus fails to meet the standard set forth in Comcast, 133 S. Ct. at 1433, and its progeny.

See, e.g., Bright v. Asset Acceptance, Inc., 292 F.R.D. 190, 202 (D.N.J. 2013) (holding that Comcast

made “clear that a plaintiff seeking class certification must present evidence of a reliable

methodology for calculating damages on a class-wide basis”). For all of these reasons, certification

of the proposed New Jersey class should be denied.

VIII. THE PROPOSED STATE CLASSES FAIL TO MEET THE SUPERIOTYREQUIREMENT UNDER RULE 23(b)(3)

Rule 23(b)(3) requires Plaintiffs to prove that a class action is “superior to other available

methods for fairly and efficiently adjudicating the controversy.” The superiority requirement is not

satisfied where individual issues predominate. Johnson v. Harley-Davidson Motor Co., 285 F.R.D.

573, 584 (E.D. Cal. 2012) (holding that superiority requirement not met because “nearly all the

alleged common questions of law and fact are not subject to common proof and individual issues

predominate”); Hadjavi v. CVS Pharm., Inc., 2011 U.S. Dist. LEXIS 86341, at *24-25 (C.D. Cal.

July 25, 2011) (“Because the Court has found that individual issues predominate in this case, a class

action is not the superior method for litigating this matter.”) As discussed above, individual issues

predominate in this case on both liability and damages issues and attempting to resolve these issues

in a class trial would result in intractable manageability problems.

In addition, when “determining whether class treatment is superior, a court must ‘assess the

advantages of alternative procedures for handling the total controversy.’” O’Connor, 197 F.R.D. at

419 (citation omitted). In this case, Plaintiffs seek both monetary damages and injunctive relief in

the form of a court-ordered recall. (PM 32, 38.)15 Even if the Court has authority to issue such a

recall, which is doubtful,16 administering a recall would be completely unmanageable. By contrast,

15 Notably, Plaintiffs assert that only class members who have a cracked appliqué should beprovided a replacement appliqué of the same design pursuant to Ford’s existing repair procedures.(PM 38.) This undercuts any claim by Plaintiffs that the appliqués are inherently defective ordestined to fail, and shows that what they really want is an extended warranty of unlimited duration.

16 See In re Bridgestone/Firestone Inc. Prods. Liab. Litig., 153 F. Supp. 2d 935, 940 (S.D. Ind.2001) (dismissing claim requesting relief in the form of a judicial recall as preempted by the SafetyAct); Cox House Moving, Inc. v. Ford Motor Co., 2006 U.S. Dist. LEXIS 55490, at *24 (D.S.C.


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NHTSA has the expertise and resources to oversee a recall. Plaintiffs can petition NHTSA to

investigate the cracked appliqué and if the agency finds that a safety defect actually exists, NHTSA

is obligated by statute to order Ford to recall and repair the vehicles. 49 U.S.C. § 30118(b).

Numerous courts have recognized that NHTSA oversight is superior to a class action, especially in

cases—like this one—where the class includes many individuals whose vehicles have not

manifested the alleged defect. See, e.g., In re Bridgestone/Firestone, Inc., 288 F.3d 1012, 1019 (7th

Cir. 2002) (“Regulation by the NHTSA, coupled with tort litigation by persons suffering physical

injury, is far superior to a suit by millions of uninjured buyers for dealing with consumer products

that are said to be failure-prone.”); Johnson, 285 F.R.D. at 584 (petitioning NHTSA for recall was

superior to class action); In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 174 F.R.D. 332,

353 (D.N.J. 1997) (“[T]he administrative remedy provided by NHTSA, including recall of vehicles

for inspection and/or repair, is more appropriate than civil litigation seeking money damages in a

federal court.”); Kia Motors 985 So. 2d at 1142 (“A NHTSA recall would reach the ‘uninjured’

class members in this case. This mechanism is clearly the superior ‘aggregate mechanism’ if the

goal is relief for the ‘uninjured.’”).

Finally, Plaintiffs do not even address how this case could ever be tried in a manageable

fashion, much less present a proposed trial plan. Indeed, while their current motion seeks

certification of three state classes, their lawsuit includes 17 more proposed classes under the laws of

17 other states. Obviously, Plaintiffs recognize that they could not achieve certification of one class

under the laws of 20 different states because the variations in state laws would swamp any common

issues. Mazza v. Am. Honda Motor Co. 666 F.3d 581, 596 (9th Cir. 2012) (“Because the law of

multiple jurisdictions applies here to any nationwide class of purchasers or lessees of [the class

vehicles] . . . variances in state law overwhelm common issues and preclude predominance for a

single nationwide class.”) But the fact that Plaintiffs seek certification of 20 state classes, instead of

one nationwide class, is not a panacea that somehow solves the problem of applying multiple state

laws. See e.g., Farrar & Farrar Dairy, Inc. v. Miller-St. Nazianz, Inc., 254 F.R.D. 68, 76-77

Aug. 8, 2006) (same); but see Chamberlan v. Ford Motor Co., 314 F. Supp. 2d 953, 967 (N.D. Cal.2004) (holding that recall was not preempted by the Safety Act).


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(E.D.N.C. 2008) (“[T]he court rejects named plaintiffs’ argument that skillful subclassing can solve

any predominance and superiority problems with their proposed class action.”); In re Prempro

Prods. Liab. Litig., 230 F.R.D. 555, 565 (E.D. Ark. 2005) (denying class certification where

plaintiff alleged 24 state subclasses because “[w]hile a multitude of subgroups might solve the

variation of laws problem, it would lead to monumental case management problems”). The Court

must still determine—prior to certifying the various state classes—that the case could be

manageably tried. In re Prempro, 230 F.R.D. at 565 (holding that it was improper “merely to certify

an action as a proper class suit and then suggest that all the problems raised by the parties may be

adjusted or handled at a later stage”). Trying a case with 20 state classes is no more manageable

than trying a case with a single class under the laws of 20 different states. See Paul v. Intel Corp.,

2010 U.S. Dist. LEXIS 144511 (D. Del. July 28, 2010) (denying certification of 26 state subclasses

because the prospect of one joint trial or 26 separate trials “eliminates any efficiencies that might

have been gained by the use of the class action mechanism and creates insurmountable

manageability concerns”). Having failed to satisfy the superiority requirement, class certification

should be denied as to each of the state classes.

IX. THE COURT SHOULD DENY CERTIFICATION UNDER RULE 23(b)(2).

In what appears to be an afterthought, Plaintiffs state that they also seek certification of “a

class” under Rule 23(b)(2). (PM 38.) It is unclear whether this request is for just one of the states, or

all three. In any event, certification under Rule 23(b)(2) is inappropriate for any of the state classes

because “[f]or a class to be certified under Rule 23(b)(2), ‘the claim for monetary damages must be

secondary to the primary claim for injunctive or declaratory relief.’” Hadjavi, 2011 U.S. Dist.

LEXIS 86341, at *17-18 (citation omitted); see also Stemple v. QC Holdings, Inc., 2014 U.S. Dist.

LEXIS 125313, at *23 (S.D. Cal. Sept. 5, 2014) (holding that certification under Rule 23(b)(2) was

not proper “[s]ince Plaintiff is seeking individualized monetary claims and not solely injunctive

relief”); Irwin v. Mascott, 96 F. Supp. 2d 968, 979 (N.D. Cal. 1999) (“Rule 23(b)(2) generally does

not extend to cases in which the appropriate final relief relates exclusively or predominantly to

money damages.”). While the California Plaintiffs are precluded from seeking money damages

under the CLRA, they still seek money damages under the UCL (in the form of restitution) and the


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Secret Warranty law (in the form of reimbursement), and both the New Jersey and Florida Plaintiffs

seek monetary damages under their respective state consumer fraud statutes. Plaintiffs’ request for

monetary damages appear to be for all class members, including current and former owners and

lessees, and does not depend on whether their vehicles ever developed a cracked appliqué.

By contrast, the injunctive relief that Plaintiffs seeks is limited. Indeed, because Ford

stopped manufacturing and selling the class vehicles more than a decade ago, there is nothing for

the Court to enjoin or declare unlawful. See Wal-Mart, 131 S. Ct. at 2557 (“The key to the (b)(2)

class is the indivisible nature of the injunctive or declaratory remedy warranted—the notion that the

conduct is such that it can be enjoined or declared unlawful only as to all of the class members or as

to none of them.”); Gold v. Midland Credit Mgmt., 2014 U.S. Dist. LEXIS 142758, at *28 (N.D.

Cal. Oct. 7, 2014) (denying certification under Rule 23(b)(2) because allegedly unlawful conduct

had ceased).17 Perhaps for that reason, the only injunctive relief that Plaintiffs seek is essentially a

free repair, and their request is limited to those class members whose vehicles develop a cracked

appliqué while they own it. (PM 38.) Thus, Plaintiffs’ request for injunctive relief does not even

apply to many class members. Accordingly, it is apparent that Plaintiffs’ request for monetary

damages under Rule 23(b)(3) is the predominant form of relief that they seek and for that reason

certification under Rule 23(b)(2) should be denied.

X. CONCLUSION

For all of the foregoing reasons, the Court should deny Plaintiffs’ motion for class

certification in its entirety and with prejudice.

17 This fact distinguishes this case from Ries v. Ariz. Bevs. U.S. LLC., 287 F.R.D. 523 (N.D. Cal.2012), the only case that Plaintiffs cite. (PM 38.) In Ries, the defendant continued to market theproduct with the allegedly deceptive statement on it, and thus declaratory and injunctive relief couldaddress the allegedly unlawful conduct. Notably, the court denied certification of the 23(b)(2) class“to the extent the plaintiffs seek restitution, refund, reimbursement and disgorgement” because suchmonetary damages were not incidental to the request for injunctive relief and determining suchdamages would require individualized inquiry. Id. at *55.


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Dated: April 30, 2015 Respectfully submitted,

/s/ Amir Nassihi

Amir Nassihi (SBN: 235936)SHOOK, HARDY 7 BACON L.L.P.One Montgomery, Suite 2700San Francisco, California 94104Tel: [email protected]

Counsel for DefendantFord Motor Company
