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