Cholakyan v. MERCEDES-BENZ USA, LLC
796 F. Supp. 2d 1220
C.D. Cal.2011Background
- Cholakyan purchased a 2005 E-320 Mercedes from MBUSA dealer in 2008.
- Vehicle later leaked water; incidents occurred in Jan 2010 and Mar 2010.
- He alleges MBUSA knew of a water-leak defect via a technical service bulletin.
- Plaintiff seeks class treatment for model years 2002–2009 E-Class vehicles with water leaks.
- He claims MBUSA concealed defects and used selective, case-by-case repairs/remedies.
- Warranties: New-Vehicle warranty expired; certified pre-owned warranty did not cover water-leak repairs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to pursue CLRA/UCL claims | Cholakyan alleges injury in fact from water leak and costs. | Plaintiff lacked injury or standing for class claims. | Cholakyan has standing to pursue claims at this stage. |
| CLRA/UCL claims require safety concern and material omission | Defect poses safety risks and MBUSA concealed facts. | Safety risk is speculative and not shown. | Court finds plausible safety risk and material concealment; claims not dismissed. |
| Secret Warranty Law viability | TSB and after-warranty adjustments constitute an adjustment program. | TSB is warranty-related and not an extension program. | Secret Warranty claim dismissed as pleaded; no extension program proven. |
| Implied warranty (Song-Beverly) viability | Water-leak defect renders vehicle unmerchantable and unfit. | No proof of repair or direct defect viability at sale. | Implied warranty claim survives Rule 8 pleading at this stage. |
| Strike of class allegations | Class definitions are proper at this stage. | Class should be stricken for ascertainability and manageability. | Class allegations not struck; dismissal as to class deferred. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requirements; injury in fact)
- Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (1994) (jurisdictional challenge and merits intertwined)
- In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices, and Products Liability Litig., 754 F. Supp. 2d 1145 (C.D. Cal. 2010) (standing and redressability described)
- Brownfield v. Bayer Corp., 2009 WL 1953035 (E.D. Cal. 2009) (standing in UCL/ CLRA; reliance requirement)
- Isip v. Mercedes-Benz USA, LLC, 155 Cal. App. 4th 19 (2007) (merchantability; implied warranty standard)
- Daugherty v. Honda Motor Co., Inc., 144 Cal. App. 4th 835 (2006) (duty to disclose; safety/latent defect rule)
- Smith v. Ford Motor Co., 749 F. Supp. 2d 980 (2010) (safety concerns; disclosure duty; warranty context)
- Mexia v. Rinker Boat Co., 174 Cal. App. 4th 1297 (2009) (latent defect; one-year time limit interaction)
- Ehrlich v. BMW of North America, LLC, No. CV 10-1151 ABC (PJWx) (2010) (CLRA/merchantability; latent defect discussion)
- Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009) (injury in fact; misperceived safety risk)