291 F. Supp. 3d 936
N.D. Cal.2018Background
- Plaintiffs (certified state classes) allege Ford's MyFord Touch (MFT) infotainment system had a systemic software defect causing freezes, loss of navigation, rear‑view camera failures, Bluetooth/climate control malfunctions, and driver distraction, diminishing vehicle value.
- Certified claims include implied warranty (multiple states), express warranty (California, Washington), Massachusetts consumer protection, Ohio negligence, and Colorado strict products liability; some fraud/other warranty claims were not certified.
- Plaintiffs seek classwide diminution‑in‑value damages; experts offered two competing damages approaches: Dr. Arnold (treats MFT value as zero; uses Ford revenue/pricing) and Mr. Boedeker (choice‑based conjoint surveys estimating willingness‑to‑pay drops under different disclosure scenarios).
- Ford moved for summary judgment on several grounds: no unmerchantability, Song‑Beverly timing and used‑car limits, economic‑loss preclusion (Colorado), failure to exhaust repair remedy for express warranty, and Daubert/Comcast attacks on experts.
- The court examined legal standards for merchantability, Song‑Beverly, economic‑loss rule under Colorado law, warranty remedy limits, and admissibility/fit of expert damages models under Daubert and Comcast.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MFT‑equipped vehicles were unmerchantable | MFT had persistent defects impairing reliability, operability, and creating distractions — unfit for ordinary purpose | Continued use and some positive customer feedback show vehicles still provide transportation; no proof of increased accident rate | Denied Ford JM S J: jury may find persistent defects render vehicles unmerchantable (safety/reliability/operability theory) |
| Song‑Beverly one‑year manifestation and used‑car purchasers | Defect inherent at sale and manifested within one year; used‑car buyers can sue where express warranty was given | Song‑Beverly covers only new goods; Ford not a "retailer/distributor" of used cars | Denied as to one‑year manifestation; Granted re: used‑car purchasers (no evidence Ford acted as distributor/retailer) |
| Colorado strict products liability (economic‑loss doctrine) | Plaintiffs assert a strict liability design defect creating safety risk | Economic‑loss rule bars tort claims for pure economic loss absent independent tort duty | Granted: Colorado law (Town of Alma, Forest City) applies economic‑loss rule to bar strict products liability for purely economic harm |
| Ohio negligence class claim (duty/breach/causation) | Ford breached duty to design reasonably safe vehicles causing economic loss (diminution in value) | No showing of unreasonable safety risk or proximate causation (use without accidents) | Denied: sufficient evidence exists to let jury decide breach and economic harm causation |
| Express warranty — exhaustion of repair remedy (two repairs) | Plaintiffs contend repair remedy fails or class members exhausted repairs; some plaintiffs had multiple related repair attempts | Warranty requires opportunity to repair; Ford records show most class members had zero or one MFT repair | Denied classwide; individualized issues remain; court found some named plaintiffs satisfied two‑repair requirement and classwide SJ inappropriate |
| Admissibility and fit of damages experts (Daubert/Comcast) | Dr. Arnold and Mr. Boedeker provide models to estimate diminution in value at purchase; surveys and revenue approaches are reliable | Models flawed: Dr. Arnold assumes zero value; Boedeker ignores supply side/post‑purchase mitigation and mixes fraud‑based scenarios | Denied: experts admissible and sufficiently tied to warranty damages theory (Daubert); Comcast challenge fails because models can measure damages tied to warranty theory and issues go to weight at trial |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard) (defendant may move where plaintiff lacks evidence of an essential element)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard) (reasonable jury standard; view evidence in light most favorable to nonmoving party)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (summary judgment standard) (no genuine issue if record could not lead a rational trier of fact to find for nonmoving party)
- Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (expert admissibility) (trial judge gatekeeper for expert methodology/reliability)
- Comcast Corp. v. Behrend, 569 U.S. 27 (class damages model must measure only damages attributable to the certified theory)
- Daniel v. Ford Motor Co., 806 F.3d 1217 (9th Cir. 2015) (construction of Ford limited warranty; reliance element in omission fraud claims)
- Town of Alma v. AZCO Constr. Inc., 10 P.3d 1256 (Colo. 2000) (adopted economic‑loss rule: economic loss recoverable in contract, not tort, absent independent tort duty)
- Forest City Stapleton Inc. v. Rogers, 393 P.3d 487 (Colo. 2017) (discusses Town of Alma and economic‑loss doctrine applicability)
- Haynes Trane Serv. Agency, Inc. v. Am. Standard, Inc., 573 F.3d 947 (10th Cir. 2009) (what constitutes an independent duty under Colorado law)
- Brand v. Hyundai Motor Am., 226 Cal.App.4th 1538 (Cal. Ct. App. 2014) (vehicle unmerchantability may be shown by safety, reliability, or substantial defects beyond mere point‑to‑point transport)
- Isip v. Mercedes‑Benz USA, LLC, 155 Cal.App.4th 19 (Cal. Ct. App. 2007) (vehicle must be in safe condition and substantially free of defects to be merchantable)