ORDER GRANTING PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES
Before the Court is Plaintiffs’ Motion for Attorneys’ Fees. ECF No. 69. For the reasons set forth below, the Court will grant the motion.
I. BACKGROUND
A. Parties and Claims
Plaintiffs Jean MacDonald, Veronica Aguirre, and Brian Barbee bring this putative class action on behalf of individuals who purchased or leased 2005-2008 Ford Escape Hybrid vehicles and/or 2006-2008 Mercury Mariner'Hybrid vehicles (“Class Vehicles”). ECF No. 27. Plaintiffs allege that Class Vehicles equipped with the Motor Electronic Cooling System (“MECS”) contain defective coolant pumps. Plaintiffs
B. Chronology of the Case
1. Demand Letters, Complaints, and Motions to Dismiss
On June 23, 2013, prior to filing the lawsuit, Plaintiffs served Ford with a pre-litigation demand letter pursuant to the California Legal Remedies Act (“CLRA"). .ECF No. 69- at 5. Plaintiffs filed their complaint five days later on June 28, 2013. ECF No. 1. Plaintiffs served a second formal demand letter requesting that Ford remedy the alleged defect on July 18,2013. ÉCF No. 69-4. Plaintiffs then filed a first amended complaint on September 5, 2013. ECF No. 17. On September 19, 2013, Ford filed a motion to dismiss.. ECF No. 19. After meeting and conferring with Ford, Plaintiffs filed a second amended complaint on October 24, 2013. ECF Nos. 24, 27. Ford then filed a motion to dismiss Plaintiffs’ second amended complaint on November 14, 2013. .ECF No. 28.
On March 31, 2014, the Court granted in part and denied in part Ford’s ■ motion to dismiss Plaintiffs’ second amended complaint. ECF No. 43. The Court dismissed Plaintiffs’ claims under the Song-Beverly and Magnuson-Moss Warranty Acts, but left intact Plaintiffs’ remaining CLRA and California Unfair Competition' Law (“UCL”) claims. Id.
On May 6, 2014, Ford filed an answer to Plaintiffs’ second- amended, complaint and the Parties commenced discovery. ECF No. 47. On July 10, 2014, Plaintiffs sent Ford a third settlement demand letter, ECF No. 69 at 10;
2. Ford’s Internal Activity Regarding the MECS Defect
Much of Ford’s evidence in opposition to this motion comes from- Kenneth Lilly, an Early Warning Data Trend Specialist in Ford’s Automotive Safety Office (“ASO”). Lilly first became aware., of the stalling problem with the Class Vehicles in-2009, when he first began to look at data related to the MEC and trends in that data. ECF No. 88-2 at 143. Specifically, Lilly looked at the number of paid
In. February 2014, Transport Canada
Ford contends that its personnel then “reviewed additional data and developed an action plan.” ECF No, 71-2- at 11. Ford, however, does not identify the data or detail the contents of the plan. .On , August 15, 2014, Ford’s Technical Review Group recommended a safety recall to replace the MECP and on August 25, 2014, Ford’s Field Review Committee approved the recall. Id. The person or people who actually made the recall decision, whoever they were, did not provide testimony.
3. Discovery
The Parties exchanged initial disclosures on April 16, 2014. ECF No. 48 at 6. Ford did not disclose the existence of any analysis or investigation regarding the alleged defect. ECF No. 69 at'9. Ford did not identify Kenneth Lilly or disclose Ford’s correspondence with Transport Canada, regarding that agency’s inquiry about a stalling complaint. ECF No. 69 at 9. Ford now contends it did not need disclose this information regarding' the alleged defect because the information requested did not relate to any of Ford’s claims or defenses. See ECF No. 71-2 at 15.
Ford served its response to Plaintiffs’ first set of interrogatories and requests for production on July 9, 2014. ECF No. 69 at 9. Again, Ford did not identify Kenneth Lilly, did not disclose the inquiry from Transport Canada, and otherwise did not identify any analysis or investigations germane to the defect alleged in the second amended complaint.
4. Ford’s Recall
On September 2, 2014, Ford informed the National Highway Traffic Safety Administration (“NHTSA”) of its intent to perform a voluntary safety recall (Recall No. 14V-526). ECF No. 56 at 1. In its notice, Ford stated:
The vehicle may experience a sudden partial or .full loss of motive power while driving caused by the FMEM strategy during a high temperature condition within the electronics cooling system. If this occurs, the vehicle’s braking and steering systems will continue to operate normally.; However, this condition can result in a sudden stall-like condition while driving. An engine stall without warning while driving may increase the risk of a crash.
ECF No. 70-6, Ex. E.
Ford offered to notify owners of the Class Vehicles of the potential pump, failure and instruct them to take the affected vehicle to a dealer. Id. Ford also offered to. replace all of the defective Motor Electronic Cooling Pumps (“MECP”) free of charge. and reimburse out of pocket repairs for the MECP.defect prior to the date of the safety recall notification. Id.
Ford’s voluntary recall took place over fourteen months after Plaintiffs’ sent demand letters requesting the relief offered by the recall and after Plaintiffs’ filed this lawsuit. Because the recall moots many of Plaintiffs’ claims, Plaintiffs agree that the only issue at the present time is whether Plaintiffs are entitled to attorneys’ fees under a catalyst theory. ECF No. 56 at 2.
II. LEGAL STANDARD
California’s Code of Civil Procedure section 1021.5 provides an exception to the general rule that each party to a lawsuit bears its own attorneys’ fees. See Graham v. DaimlerChrysler Corp.,
(a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.
Cal. Civ. Proc. Code § 1021.5.
To be entitled to an award of attorneys’ fees under section 1021.5, a plaintiff need not obtain a court-ordered change in the defendant’s behavior; it is enough when a plaintiffs action motivates the defendant to provide the primary relief sought. Graham,
Attorneys’ fee awards are reviewed for abuse of discretion, and an award will be upheld unless “there is no substantial evidence to support the trial court’s findings or when there has been a miscarriage of justice.” Bui v. Nguyen,
III. DISCUSSION
A. Whether Plaintiffs Are “Successful Parties”
A plaintiff is a “successful party” under section 1021.5 if “(1) the lawsuit was a catalyst motivating the defendants to provide the primary relief sought; (2) that the lawsuit had merit and achieved its
California law has a “broad, pragmatic view of what constitutes a successful party” within the meaning of section 1021.5. Graham,
Í. Whether the Suit Was a Catalyst That Prompted Defendant to Recall the Class Vehicles
“To be a catalyst, the lawsuit must have been ‘a substantial causal factor’ contributing to Defendant’s conduct, though the lawsuit need not be the only cause of Defendant’s conduct.” Henderson v. J.M. Smucker Co., No. CV 10-4524-GHK (VBKx),
Plaintiffs here argue that the chronology of events supports an inference that this lawsuit was a substantial factor in Ford’s decision to recall the Class Vehicles. ECF No. 69 at 5. Beginning in 2005, Ford was aware of ME CP failures and stalling problems. See ECF No. 71-2 at 6. Along with issuing Technical Service Bulletins that provided instructions to dealers on diagnosis and repair, Ford made manufacturing changes and design changes to address the ME CP failures and stalling. Id. Despite being aware of the ME CP failures' and resulting • stalling problems, however, Ford did not initiate a safety recall. Id.
Plaintiffs then filed their class action complaint in June of 2013 and filed the operative second amended complaint in October of 2013. Plaintiffs allege that “Ford knew or should have known that the Class Vehicles and the MECS coolant pump contain one or more design and/or manufacturing defects.” ECF No. 27 ¶ 15. Among the relief Plaintiffs-sought, Plain
Ford argues that its evidence, as summarized above, rebuts the inference arising from the chronology of events. ECF No. 71-2 at 5-6. For the following reasons, the Court finds that Ford’s evidence does overcome the presumption that the Plaintiffs’ lawsuit was a substantial factor in Ford’s decision to initiate a voluntary recall.
First, the Court finds it unconvincing that an email inquiry from Transport Canada about one car stalling in a parking lot would trigger Lilly’s (re-)analysis of the ME CP data and subsequent recommendation to recall the Class Vehicles, even though several complaints to the NHTSA and a class action lawsuit did not. Lilly stated in his deposition that the ASO has “a process” to look at NHTSA complaints and consumer complaints.
Second, Ford’s timeline relies too heavily on the power of coincidence. Ford had known about the defect since 2005 and had a department tasked with examining stalling trends that looked at sources including NHTSA complaints, consumer complaints, and lawsuits. ECF No. 71-2 at 8. The information from Transport Canada came to Lilly’s attention by February 21, 2014. ECF No. 71-4, Ex. B at 167:13-21. Lilly did not look into the issue until his “workload finally permitted him to follow up.” Id. at. 170:4-11; 184: 20723. And by happenstance, Lilly’s workload lightened shortly after this Court ruled on Ford’s motion to dismiss. As the Public Affairs Officer of the Naval Observatory once said in another context, “This is just too much of a coincidence to be coincidence.” Andrea Thompson, “Mystery Flash Traced To Russian Space Junk,” Space on NBCNews.com, http://www.nbcnews.com/ id/29958635 (Mar. 20, 2009) (accessed Nov. 2,2015).
Third,, and most significantly, there are significant holes in Ford’s evidence, as it pertains to the decision-making process behind the recall or as it pertains to the complaint in this case. Plaintiffs’ complaint was reviewed at the company; outside counsel appeared in court to defend its interests; a Ford employee acted the part of the client and gave direction — or at least permission — to outside counsel. Possibly, even presumably, that person spoke
Also missing from Ford’s evidence is the identity of the person who made the final decision to institute the recall. Was that person, whoever he or she was, aware of Plaintiffs’ complaint? Again, Ford does not say. Lilly did not make the decision to recall; he referred the matter to Ford’s Critical Concerns Review Group, and Ford personnel then “reviewed additional data and developed at action plan.” ECF No. 71-2 at 11. The issue was then passed to Ford’s Technical Review Group who recommended the recall. Id. Finally, Ford’s Field Review Committee approved the recall. Id. Notably, Ford has not described the additional data examined by the Critical Concerns Review Group or the factors specifically weighed by the Technical Review Group
The Henderson case is instructive. In that- case, the plaintiff sued the defendant for making allegedly false health claims about its food products. Henderson,
2. Whether the Lawsuit Had Merit
Under the catalyst theory, a lawsuit has merit if it is not “frivolous, unreasonable or groundless.... ” Graham,
The Court finds that this lawsuit had merit. Plaintiffs alleged that the Class Vehicles contained a defective coolant pump within the MECS that caused the Class Vehicles to shut down unexpectedly and that Ford knew or should have known of this defect. ECF No. 27. Plaintiffs requested relief including: a declaration that Ford be financially responsible for notifying all Class Members about the defective nature of the coolant pump; an order enjoining Ford from further deceptive distribution, sales, and lease practices; and an order requiring Ford to replace the defective coolant pumps. Id. ¶ 136. In its recall, Ford notified all owners of the Class Vehicles about the potential pump failure and offered to replace the current pumps with improved pumps at no charge to owners. ECF No. 56 at 1-2. Plaintiffs sufficiently established “the precise factual/legal condition” that they sought to change. See Graham,
3. Whether Plaintiffs Reasonably Attempted to Settle the Litigation Prior to Filing the Suit
A plaintiff seeking attorneys’ fees under a catalyst theory must first reasonably attempt to settle the matter short of litigation. Id. at 577,
Before determining whether this condition has been satisfied, the Court must determine what the appropriate rule is. “When the state supreme court has not ruled definitively on a point, this court looks to decisions by intermediate appellate state courts-for guidance.” State Farm Fire & Cas. Co. v. Abraio,
Ford argues that Cates was wrongly decided “because ignores the categorical
First, Ford buries it in a footnote with no explanation beyond the language just quoted. “Many courts will disregard arguments raised exclusively in footnotes.” Sanders v. Sodexo, Inc., No. 2:15-CV-00371-JAD,
Ford has not met its burden of demonstrating with convincing evidence that the California Supreme Court would decide this issue differently than Cates did. Accordingly, a movant for catalyst fees need not submit evidence of a pre-litigation settlement demand-where it is established that such a demand would have been futile. See also Henderson,
Here, the Parties agree that any attempt by Plaintiffs to settle this case would have been futile. ECF No. 69 at 14-15; ECF No. 69-11, Zohdy Decl., Ex. 10. Therefore, no rights would have been “vindicated by reasonable efforts short of litigation.” Graham,
B. Whether the Lawsuit Resulted in the Enforcement of an Important Right Affecting the Public Interest
Section 1021.5 allows courts to award attorneys’ fees if an action “resulted in the enforcement of an important right affecting the public interest.” Cal. Civ. Proc. Code § 1021.5. “[S]ection 1021.5 requires both a finding of a significant benefit conferred on a substantial number of people and a determination that the “subject matter of the action implicated the public interest.” Graham,
The Court finds that the interests underlying Plaintiffs’ claims under the CLRA and UCL, which sought to enforce California’s consumer protection laws, are important rights affecting the public interest. See Graham,
Plaintiffs have satisfied - section 1021.5’s requirement that the action have “resulted
C. Whether a Significant Benefit Has Been Conferred on the Gen- ,, eral Public or a Large Class of Persons
“ ‘The trial court must determine the significance of the benefit and the size of the class receiving that benefit by realistically assessing the gains that have resulted in a.particular case.’,” Baxter v. Salutary Sportsclubs, Inc.,
Ford’s nationwide recall involved 2005-2008 Ford Escape hybrid vehicles and 2006-2008 Mercury Mariner hybrid vehicles. In its notice to the NHTSA, Ford estimated that the recall affects 70,209 vehicles. ECF No. 70 — 6, Ex. E. The Parties stipulate, and the Court agrees, that the recall of the Class Vehicles. cónferred a significant benefit on the general public or a large class of persons. ECF No. 69 at 14-15; ECF No. 69-11, Zohdy Decl., Ex. 10; see also Graham,
D. Whether the Necessity and Financial Burden of Private Enforcement Makes the Award Appropriate
Section 1021.5 requires that “the necessity and financial burden of private enforcement ... are such as to make the award- appropriate.” .Cal., Civ. Proc, Code § 1021.5. “[T]he “necessity ... of private enforcement” has long been understood to mean simply that public enforcement is not available, or not sufficiently available.” In re Conservatorship of Whitley,
Ford disputes that private enforcement was necessary in this case.
The facts in the present case are distinguishable. Plaintiffs’ complaint alleges that several Ford customers complained about the MECP defect to the NHTSA. ECF No. 27 ¶¶ 13, 54. Athough Plaintiffs themselves did not call NHTSA’s attention to the. defect, other Ford consumers had previously complained to the NHTSA. At the time Plaintiffs commenced this lawsuit, however, NHTSA had not commenced a parallel action and “no government action was being taken to vindicate” Plaintiffs’ rights. This finding, combined with the fact that Ford would not have entertained any pre-litigation settlement (discussed above), is sufficient to show that necessity and financial burden of private enforcement makes the award appropriate. See Henderson,
IV. EVIDENTIARY OBJECTIONS
Ford objects to Exhibit B to the Declaration of Tarek H.. Zohdy in support of Plaintiffs’ Reply to Defendant’s Opposition to Plaintiffs’ Motion-for Attorneys’ Fees. ECF No. 81. Ford argues that the declaration, - which includes an excerpt from two tables produced by Ford to the Plaintiffs, is not authenticated or relevant and is hearsay. Id. at 1-2.
Under Federal Rule of Evidence 901 “the proponent [of an item of evidence], must produce evidence sufficient to support a finding that- the item is what the proponent, claims it is.” Fed. R. Evid. 901(a).
Yeager is inapposite, here. During discovery, Ford produced the documents and now objects to Plaintiffs’ submission. ECF No. 84 at 1. Ford turned over the documents with a cover letter stating the document contains “FMC360/MORS and DCQIS records” and the document included the “Bates Range: MCN3 009661.”
Next, Ford argues the documents to which Plaintiffs refer are hearsay. Id. at 2. To qualify as hearsay, the statement must be made not while testifying and the proponent of the statement must be offering it to prove the truth of the matter asserted. Fed. R. Evid. 801(c). However, in their Reply brief, Plaintiffs use the Zoh-dy Declaration and Exhibit B to support their argument that Ford knew of at least two alleged accidents resulting from the MECP defect. See ECF No. 79 at 8. Plaintiffs assert that Ford had knowledge of the events, not that the events were true. See United States v. Rogers,
Last, Ford argues the exhibit is not relevant. ECF No. 81 at 2. To be relevant, evidence must have “any tendency to make a fact more or less probable than it would be without the evidence” and that fact must be “of consequence in determining the action.” Fed. R. Evid. 401. Plaintiffs’ allege that the Class Vehicles were defective and that Ford knew or should have known about the defect. Complaints made to Ford and catalogued by Ford about the loss of power in 2008 Ford Escape hybrid vehicles are relevant to Plaintiffs’ argument about Ford’s knowledge of the complaints made about the Class Vehicles.
Ford’s objections to Exhibit B are overruled.
CONCLUSION
For the reasons explained above, the Court grants Plaintiffs’ motion for fees, Within thirty days of this order, Plaintiffs will submit a motion for attorneys’ fees. Ford may file an opposition within fourteen days thereafter. Plaintiffs may file any reply to the opposition within seven days thereafter.
IT IS SO ORDERED.
Notes
. Transport Canada is the department within the government of Canada that is responsible for developing transportation regulations, policies, and programs. For purposes of this order, it is analogous to the National Highway Traffic Safety’ Administration ("NHTSA”). .
. Ford notes that, ordinarily, Plaintiffs’ complaints' would have been forwarded to the ASO for review. See ECF- No. 71-2 at 9. However, Ford argues that "Plaintiffs’ various complaints provided no information that was not already known to Ford based on ASO’s review of warranty data, complaints to
. Ford reports that ASO employees regularly, ■ sometimes on a daily basis, reviewed data from complaints by to the NHTSA, reports from dealers, consumer complaints made directly to Ford, and' lawsuits and complaints. ECF No. 71-2. at 8.
. Ford’s description of its recall procedure notes that the Technical Review Group membership typically includes employees from Ford's engineering group, public affairs, as well as those from the Office of the General Counsél. See ECF No. 71-5, Ex. C.
. By contrast, the court did find that plans to remove the "wholesome” and "homemade goodness” claims predated the litigation because defendant provided mock-ups of the product package that did not include the language. Id. at *7. This suggested that the defendant independently decided to remove
. Ford does not dispute that the financial burden of private enforcement makes the award appropriate. See ECF No. 71 at 17-18. The Court finds that bringing a class action lawsuit constitutes a financial burden.
. The Federal Rules of Evidence apply to diversity cases. Yeager v. AT & T Mobility, LLC, No. CIV S 07-2517 KJM GGH,