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Gillard v. Volkswagen Group of America, Inc.
4:17-cv-07287
N.D. Cal.
Aug 8, 2019
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Background

  • Plaintiffs (owners/lessees of 2010–2015 Audi S4/S5/S6/S7/RS5 vehicles) allege DSG transmissions cause juddering, surging, hesitation, and dangerous driving conditions; class action filed against VWGoA.
  • Plaintiffs allege VW had pre-sale knowledge (including a 2009 recall for similar DSG units and multiple TSBs from 2011–2016) and failed to disclose or adequately repair the defect.
  • Plaintiffs brought nine claims in the SAC: express warranty, implied warranty, MMWA, Song‑Beverly, CLRA, UCL, declaratory relief, unjust enrichment, and injunctive/declaratory equitable relief; some plaintiffs purchased new vehicles in California, others purchased used or outside California.
  • Court evaluated Rule 12(b)(6) and Rule 9(b) standards, and applied statutes of limitations, fraudulent concealment/tolling principles, and privity limits for implied warranty claims under California law.
  • Court dismissed many claims (express warranty for several plaintiffs, all implied warranty claims, most Song‑Beverly, most CLRA/UCL, MMWA and unjust enrichment for many plaintiffs) but allowed a narrowed set of claims to survive: express warranty and MMWA for Oushana and Chess; Song‑Beverly for Madani; declaratory and equitable injunctive relief for Oushana, Chess, and Madani. Madani and Oushana’s CLRA/UCL claims were dismissed with leave to amend limited to pleading reliance.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether express written warranty claims survive Plaintiffs say warranties cover the transmission defect and some experienced problems within warranty or tolling applies VW argues many plaintiffs’ symptoms occurred after warranty expiration and some claims are time‑barred Dismissed for most plaintiffs; survives only for Oushana and Chess (others dismissed as time‑barred or inadequately pleaded)
Whether implied warranty claims survive Plaintiffs assert implied merchantability despite privity/limitations VW: California privity rule and NY/TX law limiting implied warranties to express warranty duration bar claims All implied warranty claims dismissed (leave to amend denied)
Whether fraudulent concealment tolls statutes (Song‑Beverly/CLRA/UCL) Plaintiffs contend VW concealed defect, tolling limitations VW: plaintiffs had actual or inquiry notice; many discovered defects years before filing Tolling rejected for plaintiffs who alleged knowledge (e.g., Chess, Warchut); Song‑Beverly survives only for Madani who first experienced defect in 2017
Whether CLRA/UCL equitable claims barred by adequate legal remedy Plaintiffs argued equitable claims allowed alongside legal remedies VW argued adequate remedy at law precludes equitable claims Court (relying on recent CA authorities) permits pleading CLRA/UCL; but dismissed Madani and Oushana CLRA/UCL for failure to plead reliance (leave to amend granted)

Key Cases Cited

  • Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleading)
  • Ashcroft v. Iqbal, 556 U.S. 662 (courts accept well‑pleaded facts but not conclusory allegations)
  • Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097 (12(b)(6) standard in Ninth Circuit)
  • Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (California privity rule and limits on post‑warranty express warranty claims)
  • Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981 (court may deny further leave to amend after prior opportunities)
  • Kearns v. Ford Motor Co., 567 F.3d 1120 (Rule 9(b) applies to fraud‑sounding claims)
  • In re Gilead Scis. Secs. Litig., 536 F.3d 1049 (court need not accept unreasonable inferences)
  • Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025 (accept factual allegations as true on motion to dismiss)
Read the full case

Case Details

Case Name: Gillard v. Volkswagen Group of America, Inc.
Court Name: District Court, N.D. California
Date Published: Aug 8, 2019
Docket Number: 4:17-cv-07287
Court Abbreviation: N.D. Cal.