In Re Toyota Motor Corp.
790 F. Supp. 2d 1152
C.D. Cal.2011Background
- C.D. California federal multi-district litigation concerning Toyota unintended acceleration; domestic economic loss plaintiffs allege overpayment and diminished vehicle value due to a defect with SUA and lack of fail-safes.
- Court previously granted in part and denied in part the defendants’ motions to dismiss/strike; amended complaint filed; current order addresses standing, CLRA/UCL/FAL, and warranty-related claims.
- Plaintiffs allege a safety defect plausibly causing economic loss, with some lead plaintiffs asserting personal SUA experiences.
- Toyota challenges standing under Article III and California consumer-protection statutes, arguing overbroad, conclusory, or non-personalized injury assertions.
- Court distinguishes between injury-in-fact and liability theories, finds plausible safety defect allegations, and sustains some but not all warranty and statutory claims.
- New non-consumer plaintiff Auto Lenders Liquidation Center, Inc. added with related loss allegations; court applies previous rulings to warranty claims for added party.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiffs have Article III standing based on economic loss from a safety defect | Brown and other lead plaintiffs allege overpayment due to defect and market effects; market-based evidence supports injury-in-fact. | Boilerplate overpayment language is insufficient; market-effect allegations are too general and not tied to individual overpayments. | Yes; plausible safety defect alleged so economic losses satisfy standing; market effects may support injury even for non-defect cases. |
| Whether lead plaintiffs have standing based on a credible threat of future harm | Some lead plaintiffs fear driving their cars due to SUA and stopped driving, alleging credible future-harm. | Generalized future-risk allegations are insufficient for most lead plaintiffs. | Partially; a subset (Baldisseri, Kamphaus, Laidlaw) meet the credible-threat standard; others do not. |
| Whether Plaintiffs have standing to assert UCL, FAL, and CLRA claims given reliance and causation requirements | All plaintiffs relied on Toyota's safety/reliability representations and would have paid less or bought differently absent disclosures. | Defendants argue lack of individualized reliance and causation; minimal reliance arguments addressed. | Yes; actual reliance presumed where misrepresentation is material; materiality and reliance satisfied for UCL/FAL/CLRA. |
| Whether CLRA and FAL claims based on TREAD Act violations were properly pled and not to be stricken | TREAD Act violations are material omissions/corrupt disclosures that support CLRA; not redundant to UCL. | TREAD Act references are immaterial to consumers and not misrepresentations to the public. | CLRA/FAL claims upheld; TREAD Act references not stricken; permissible as basis for CLRA. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standing requires injury-in-fact; low pleading burden at stage of standing)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (truth-in-advertising labels can render consumers to have suffered economic loss)
- In re Tobacco II Cases, 46 Cal.4th 298 (Cal. 2009) (presumption of reliance where misrepresentation is material; broad applicability to UCL/FAL)
- Engalla v. Permanente Med. Group, Inc., 15 Cal.4th 951 (Cal. 1997) (material misrepresentation creates presumption of reliance; substantial factor standard)
- Mass. Mutual Life Ins. Co. v. Superior Court, 97 Cal.App.4th 1282 (Cal. App. 2002) (economic injury under UCL/CLRA can arise from overpayment due to deceptive labeling)
- Daugherty v. American Honda Motor Co., 144 Cal.App.4th 824 (Cal. App. 2006) (implied warranty/consumer duties; relevance to CLRA/implicit disclosures)
- Hicks v. Kaufman & Broad Home Corp., 89 Cal.App.4th 908 (Cal. App. 2001) (implied warranty standing and latent defect considerations)