In re Myford Touch Consumer Litigation
46 F. Supp. 3d 936
N.D. Cal.2014Background
- Plaintiffs (23 individuals + 1 organization) sued Ford in a nationwide class action contending the MyFord Touch (MFT) infotainment system is defectively designed/implemented (software/hardware), causes safety and usability problems, and that Ford knew of the defects when it sold/leased vehicles.
- MFT (built on Ford SYNC) was rolled out beginning 2010; plaintiffs purchased/leased vehicles 2010–2013. Ford issued multiple Technical Service Bulletins (TSBs), software updates, and Campaign 12M01 (warranty extension for APIM) in response to problems.
- Plaintiffs allege fraud (fraudulent concealment and statutory consumer-fraud claims), various tort claims, breach of express and implied warranties under state law, Magnuson-Moss Warranty Act (MMWA) claims, and a claim under California’s Secret Warranty Law.
- Ford moved to dismiss under Fed. R. Civ. P. 12(b)(6) and Rule 9(b) (fraud), arguing plaintiffs failed to plead affirmative misrepresentations, lacked duty/knowledge for nondisclosure claims, many warranty claims fail for lack of presentation/notice/privity/exhaustion, and some statutory claims are time-barred.
- The court granted in part and denied in part: it dismissed affirmative-representation fraud claims generally (except one plaintiff), denied dismissal of failure-to-disclose fraud claims, sustained and dismissed various warranty claims by plaintiff and state (with some dismissals with prejudice), and dismissed the MMWA claim for failure to exhaust informal dispute procedures (without prejudice).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraud — affirmative misrepresentation | Ford touted MFT features; those statements are actionable | Statements described functionality, not absolute defect-free guarantees; limited warranty disclaims defect‑free status | Affirmative‑misrepresentation fraud claims dismissed (generally); one plaintiff’s dealership statement survived to plead agency/fact question |
| Fraud — failure to disclose / duty to disclose | Ford knew of systemic defects (TSBs, complaints, updates) and had a duty to disclose (safety and superior knowledge) | No duty because product still operable; public complaints put consumers on notice; limited warranty disclosed possible defects | Failure‑to‑disclose fraud claims survive; court finds plausible knowledge and duty (safety concerns and superior knowledge) |
| Statute of limitations (IA, TX, VA) | Tolling applies because Ford actively concealed defects and repairs were superficial | Plaintiffs filed after two‑year statute; no tolling | Tolling plausibly pleaded via active concealment; claims not dismissed at 12(b)(6) stage |
| Express warranty — presentation/repair and notice | Warranty failed of essential purpose because repeated repairs unsuccessful; futility excuses presentation/repair and notice | Plaintiffs failed to present vehicles or provide statutory notice to seller/manufacturer; some states require pre‑suit notice to manufacturer; filing suit generally insufficient in some jurisdictions | Claims of four plaintiffs who never presented vehicles dismissed (without prejudice); multiple plaintiffs’ express‑warranty claims dismissed with prejudice where notice to required party was not pleaded; other claims survive pending proof |
| Express warranty — "lumping" multiple defects | Multiple, related MFT failures reflect single systemic defect; grouping permissible | Different repairs for distinct problems cannot be aggregated to show failure of remedy | Court allows grouping at pleading stage — underlying systemic defect plausibly alleged |
| Implied warranty/privity | Implied warranty claims allege unmerchantable vehicles (unsafe/unreliable) and third‑party‑beneficiary exception to privity | Some states require privity; manufacturer suits by non‑privity buyers should be dismissed | Implied warranty claims survive in many states where privity exception applies (or Song‑Beverly applies); plaintiffs conceded/dismissed some claims where privity required |
| MMWA — lessee standing & exhaustion | Lessees qualify under MMWA categories (transferred during warranty; state law enforcement rights); exhaustion futility alleged | MMWA limited to buyers; plaintiffs failed to exhaust required informal dispute process in warranty | Court finds lessees can plausibly be consumers under MMWA; but dismissal (without prejudice) for failure to exhaust Ford’s informal dispute procedure, absent pleaded futility |
| California Secret Warranty Law | TSBs and ad hoc reimbursements constitute an adjustment program; Ford failed to notify | TSBs and ad hoc payments are not adjustment programs; only Campaign 12M01 extended warranty | Secret‑warranty claim survives only as to Campaign 12M01 (plausibly an adjustment program and notice failure) |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for pleadings under Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleadings must contain enough facts to state a plausible claim)
- Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008) (vertical privity required for implied‑warranty claims under California UCC absent recognized exceptions)
- Hiigel v. Gen. Motors Corp., 544 P.2d 983 (Colo. 1976) (strict liability and treatment of product‑only damage under § 402A)
- Town of Alma v. AZCO Constr., 10 P.3d 1256 (Colo. 2000) (economic loss rule—source of duty determines tort vs. contract recovery)
- Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins. Co., 537 N.E.2d 624 (Ohio 1989) (economic loss rule bars negligence recovery for purely economic loss in privity contexts)
- Kwikset Corp. v. Superior Court, 246 P.3d 877 (Cal. 2011) (materiality in consumer protection claims is generally a question of fact)