Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 1 of 18 Page ID #:8804
`
`United States District Court
`Central District of California
`
`
`Shaun Sater et al.,
`
`
`
`Plaintiffs,
`
`
`
`v.
`
`Chrysler Group LLC et al.,
`
`
`
`
`
`
`
`Defendants.
`
`EDCV 14-700-VAP (DTBx)
`
`
`Order Granting
`Defendant’s Motion for
`Partial Summary Judgment
`
`On September 13, Defendant FCA US LLC, f/k/a Chrysler Group LLC, filed a
`
`motion for partial summary judgment as to all claims of Texas Plaintiff Scott Johnson and
`
`all claims on issue of defect. (Doc. No. 176.) On October 3, 2016, Plaintiffs Jeff Looper,
`
`Michael Bright, and Scott Johnson filed their Opposition. (Doc. No. 186.) On October
`
`10, 2016, Defendant filed its Reply. (Doc. No. 192.) After reviewing and considering all
`
`papers filed in support of, and in opposition to, the Motion, the Court GRANTS the
`
`Motion.
`
`
`
`I.
`Plaintiffs initiated the present action against Defendant, on April 9, 2014. (Doc.
`
`BACKGROUND
`
`No. 1.) In their operative complaint, Plaintiffs allege a variety of claims against Defendant
`
`on behalf of a class of persons who own or lease the following 2009-12 Dodge Ram trucks:
`
`2500 4x4; 3500 4x4; 3500 Cab Chassis 4x2; 4500 all series; and 5500 all series (“class
`
`vehicles”). Third Amended Complaint at 1. Plaintiffs Bright and Looper allege claims
`
`under federal and California law for: violation of the federal Magnuson-Moss Warranty
`
`Act, 15 U.S.C. § 2301, et seq. (Count I); violation of the California Song-Beverly Warranty
`
` 1
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 2 of 18 Page ID #:8805
`
`Act, Cal. Civ. Code section 1791, et seq. (Count II); violation of the California Consumer
`
`Legal Remedies Act, Cal. Civ. Code section 1750, et seq. (Count III); violation of
`
`California Unfair Competition Law, Cal. Bus. & Prof. Code section 17200, et seq. (Count
`
`IV); negligent failure to warn (Count VI); negligent failure to test (Count VII); and
`
`negligent misrepresentation (Count VIII). Plaintiff Johnson alleges a single claim under
`
`the Texas Deceptive Trade Practices Act (“DTPA”), Tex. Bus. & Com. Code section
`
`17.46, et seq. (Doc. No. 101.)
`
`
`
`II. LEGAL STANDARD
`A motion for partial summary judgment, like summary judgment, shall be granted
`
`when there is no genuine issue as to any material fact, and the moving party is entitled to
`
`judgment as a matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477
`
`U.S. 242, 247-48 (1986); Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Ready Pac Foods,
`
`Inc., 782 F. Supp. 2d 1047, 1053 (C.D. Cal. 2011). The moving party must show that
`
`“under the governing law, there can be but one reasonable conclusion as to the verdict.”
`
`Anderson, 477 U.S. at 250.
`
`
`
`Generally, the burden is on the moving party to demonstrate that it is entitled to
`
`summary judgment. Margolis v. Ryan, 140 F.3d 850, 852 (9th Cir. 1998); Retail Clerks
`
`Union Local 648 v. Hub Pharm., Inc., 707 F.2d 1030, 1033 (9th Cir. 1983). The moving
`
`party bears the initial burden of identifying the elements of the claim or defense and
`
`evidence that it believes demonstrates the absence of an issue of material fact. Celotex
`
`Corp. v. Catrett, 477 U.S. 317, 323 (1986).
`
`
`
`Where the non-moving party has the burden at trial, however, the moving party
`
`need not produce evidence negating or disproving every essential element of the non-
`
`moving party’s case. Celotex, 477 U.S. at 325. Instead, the moving party’s burden is met
`
` 2
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 3 of 18 Page ID #:8806
`
`by pointing out that there is an absence of evidence supporting the non-moving party’s
`
`case. Id.
`
`
`
`“If a moving party fails to carry its initial burden of production, the nonmoving
`
`party has no obligation to produce anything, even if the nonmoving party would have the
`
`ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz Co., 210
`
`F.3d 1099, 1102–03 (9th Cir. 2000). “In such a case, the nonmoving party may defeat the
`
`motion for summary judgment without producing anything.” Id. at 1103.
`
`
`
`If the moving party carries its burden of production, however, the burden then
`
`shifts to the non-moving party to show that there is a genuine issue of material fact that
`
`must be resolved at trial. See Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 324; Anderson,
`
`477 U.S. at 256; Nissan Fire, 210 F.3d at 1103. The non-moving party must make an
`
`affirmative showing on all matters in issue by the motion as to which it has the burden of
`
`proof at trial. Celotex, 477 U.S. at 322; Anderson, 477 U.S. at 252. See also William W.
`
`Schwarzer, A. Wallace Tashima & James M. Wagstaffe, FEDERAL CIVIL PROCEDURE
`
`BEFORE TRIAL, § 14:144. “This burden is not a light one. The non-moving party must
`
`show more than the mere existence of a scintilla of evidence.” In re Oracle Corp. Secs.
`
`Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citing Anderson, 477 U.S. at 252).
`
`
`
`A genuine issue of material fact will exist “if the evidence is such that a reasonable
`
`jury could return a verdict for the non-moving party.” Anderson, 477 U.S. at 248. In
`
`ruling on a motion for summary judgment, a court construes the evidence in the light
`
`most favorable to the non-moving party. Barlow v. Ground, 943 F.2d 1132, 1135 (9th Cir.
`
`1991); T.W. Elec. Serv. Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630-31 (9th Cir.
`
`1987).
`
`
`
` 3
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 4 of 18 Page ID #:8807
`
`III. FACTS
`To the extent certain facts or conclusions are not mentioned in this Order, the
`
`Court has not relied on them in reaching its decision. The Court has considered
`
`independently the admissibility of the evidence that both parties submitted and has not
`
`considered irrelevant or inadmissible evidence.
`
`
`
`The following material facts are supported adequately by admissible evidence and
`
`are uncontroverted. They are “admitted to exist without controversy” for the purposes of
`
`this Motion. See L.R. 56-3.
`
`
`A. Initial Discovery of Defect
`This case concerns a steering linkage defect in the class vehicles.1 Each class
`vehicle came factory-equipped with a newly-designed “Cross Car” steering linkage
`system.2 (Plaintiffs’ Statement of Undisputed Facts (“PSUF”) ¶ 2.) A steering linkage
`system is a set of components that attach to a vehicle’s wheels, causing the wheels to turn
`
`when the driver rotates the steering wheel. (PSUF ¶ 3.) Within those components are tie
`
`rods that connect the two front wheels and transfer steering motion between them, as well
`
`as ball studs that move forward or backward, or “articulate,” to accommodate turning and
`
`bumps on the road. (PSUF ¶ 4; Hannemann Decl ¶ 31.)
`
`
`1 In its Reply, Defendant notes that it “vehemently contests the accuracy of most of the
`purported ‘facts’ set forth by Plaintiffs in their opposition,” but does not offer any
`evidence to controvert Plaintiffs’ purported facts. The Court, therefore, accepts the
`facts noted above as true for the purposes of this motion for partial summary judgment.
`See Bond v. Knoll, No. EDCV 11-1929, 2014 WL 7076901, at *2 (C.D. Cal. Dec. 10,
`2014) (“Properly supported facts contained in Plaintiff’s SUF and Defendants’ SUF are
`accepted as true to the extent they have not been controverted.”).
`2 The “Cross Car” steering linkage system takes its name from the fact that it crosses
`underneath the truck all the way from one front wheel to the other. (Opposition at 3;
`Doc. No. 185-5 at 14-15.)
`
` 4
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 5 of 18 Page ID #:8808
`
`Plaintiffs have presented undisputed evidence that the class vehicles suffered from
`
`a design flaw that could cause the driver’s side ball stud to break and result in a loss of
`
`steering control. (PSUF ¶ 17-21.) As early as December 2007, an engineer employed by
`
`Defendant reported internally that, during testing, the driver’s side ball stud was
`
`fracturing from what appeared to be repeated contact between the stud and the socket
`
`window. (PSUF ¶ 24.) The steering linkage system supplier verified that the December
`
`2007 stud fracture was due to repeated contact between the stud and the socket window.
`
`(PSUF ¶ 25.) In July 2008, an internal report noted that the steering linkage tie rod end
`
`was being replaced at rates so high that an “[i]nvestigation [was] [r]equired.” (PSUF ¶
`
`29.)
`
`
`
`As early as March 2009, Defendant’s internal reports suggested that the tie rod
`
`alignment feature might need to be redesigned. (PSUF ¶ 33.) In October 2009,
`
`Defendant issued an internal part-change notice that called for the installation of an “anti-
`
`rotation feature” in future vehicles “to . . . maintain parallel alignment of left and right
`
`hand ball studs” and “minimize the chance of ball joint damage.” (PSUF ¶¶ 38-40.) In
`
`April 2010, one of Defendant’s employees responded to customer complaints concerning
`
`tie rod failures by noting that “[w]e are familiar with this issue . . . . [and] have a long-term
`
`production fix being validated, which will be an anti-rotation device on the tie rod. This
`
`will be in production next spring.” (PSUF ¶¶ 49-52.) In June 2010, another one of
`
`Defendant’s employees reported that there was “an alarming rate of failures of the tie rod
`
`end ball studs” in the class vehicles and was told by a different employee within the
`
`company that “a part design [was] in process to help.” (PSUF ¶¶ 53, 54.)
`
`
`B. Defendant’s Defect Disclosure and Recalls
`In December 2010, Defendant contacted the National Highway Traffic Safety
`
`Administration (“NHTSA”) to disclose it had “recently” determined that “misalignment
`
` 5
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 6 of 18 Page ID #:8809
`
`between the left and right ball studs” was causing “fractured left ball studs” in its 4500
`
`and 5500 model trucks. (PSUF ¶¶ 60, 64.) In that letter, Defendant stated it would
`
`perform safety recall “K28,” which applied only to the 4500 and 5500 model trucks.
`
`(PSUF ¶¶ 61, 72.)
`
`
`
`Around the same time, one of Defendant’s employees sent internal emails
`
`acknowledging that “any vehicle[s] with the new style linkage,” including some not
`
`covered by the recall, were at risk of left ball stud fractures. (PSUF ¶ 73.) The employee
`
`also emphasized that “[i]t is critical to properly align the ball stud on any of these vehicles
`
`equipped with the [new] style linkage.” (PSUF ¶ 75.) In March 2011, NHTSA told
`
`Defendant that it had received “complaints for ball stud fracture” in the 2500 and 3500
`
`model trucks, class vehicles which were not recalled under the K28 safety recall. (PSUF
`
`¶ 80.)
`
`
`
`In June 2011, Defendant announced the “L16” safety recall for the 2500 and 3500
`
`model trucks. (PSUF ¶ 80.) Defendant reported to NHTSA that, when it announced the
`
`K28 safety recall, it “believed the 2500/3500 4x4 steering linkage to be unaffected as it
`
`was a different design.” (Doc. No. 186-8.) Defendant stated that it only realized in March
`
`2011 that the 2500 and 3500 models “may warrant further analysis” and did not
`
`determine a recall was appropriate until June 28, 2011. (Doc. No. 186-8.)
`
`
`
`
`
`Unfortunately, both the K28 and L16 recalls proved ineffective. Under those
`
`recalls, Defendant attempted to fix the defect with an inclinometer—a device that, in
`
`theory, could orient the tie rod ends properly. (PSUF ¶ 66; Opposition at 7.) But
`
`following the K28 and L16 recalls, left ball studs continued to fracture in class vehicles
`
`aligned using an inclinometer. (PSUF ¶ 92.) In September 2012, Defendant opened a
`
`formal inquiry into the continuing fractures of left ball studs in class vehicles built or
`
` 6
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 7 of 18 Page ID #:8810
`
`repaired after the K28 and L16 recalls. (PSUF ¶ 101.) As of October 2013, Defendant had
`
`discovered 425 post-recall left ball stud fractures in class vehicles. (PSUF ¶ 124.)
`
`
`
`In November 2013, Defendant announced recalls “N49” and “N63”—Defendant
`
`later renamed recall “N63” to “R16.”3 (PSUF ¶¶ 127, 128.) Recalls N49 and R16
`provided owners with a new steering linkage package that included tie rods to prevent left
`
`ball stud fractures in class vehicles. (Defendant’s Statement of Undisputed Facts
`(“DSUF”) ¶¶ 13, 14.)4 The parties do not dispute that those recalls were effective in
`remedying the design defect for class vehicles, and they agree that effective repairs were
`
`ultimately provided to all three named plaintiffs under those recalls. (See Opposition at
`
`23-24.)
`
`
`
`C. Plaintiffs’ Truck Purchases and Repairs
`In July 2010, before Defendant announced any of its steering linkage recalls or
`
`publically disclosed any risk associated with the left ball stud alignment in its vehicles,
`
`Plaintiff Bright purchased a 2010 Dodge RAM 2500 truck for approximately $55,000.
`
`(PSUF ¶¶ 48, 56, 57.) In November 2010, before Defendant announced any of its steering
`
`linkage recalls or publically disclosed any risk associated with the left ball stud alignment
`
`
`3 Plaintiffs spend a significant portion of their Opposition alleging facts that they claim
`establish Defendant, after realizing the K28 and L16 recalls were ineffective,
`intentionally delayed the issuance of an effective recall. (See Opposition at 9-11.) The
`Court does not discuss those allegations because they are irrelevant for the purposes of
`resolving Defendant’s Motion. Rather, the pertinent inquiry as to Plaintiff Johnson’s
`DTPA claims is whether Defendant fraudulently concealed the defect at the time
`Johnson purchased his truck in November 2010, which was before Defendant issued the
`K28 and L16 recalls.
`4 Plaintiffs contend that recall N63 only provided a temporary remedy and was renamed
`“R16” when permanent replacement parts became available in May 2015. (PSUF at 7-
`8.) Plaintiffs, however, admit that the R16 recall was effective in eliminating the steering
`linkage defect. (Opposition at 23-24.)
`
` 7
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 8 of 18 Page ID #:8811
`
`in its vehicles, Plaintiff Johnson purchased a 2010 Dodge RAM 2500 truck for
`
`approximately $50,000. (PSUF ¶¶ 48, 58, 59.) In June 2013, after Defendant announced
`
`its initial (and ineffective) K28 and L16 recalls but before it announced the (effective)
`
`N49, N63, and R16 recalls, Plaintiff Looper bought a 2012 Dodge Ram 3500 truck for
`
`approximately $60,000. (PSUF ¶¶ 122, 123.)
`
`
`
`
`
`Plaintiff Johnson, whose claim under the Texas Deceptive Trade Practices Act is
`
`challenged by Defendant’s motion for partial summary judgment, purchased his 2010
`
`Dodge RAM 2500 truck from a car dealer in Lampasas, Texas. (DSUF ¶ 31.) Johnson
`
`testified that, before purchasing the truck, he researched the truck’s “safety” online and
`
`he “bought the truck because of the simple fact of safety.” (Doc. No. 179-1 at 72.) He
`
`also testified he entered into an agreement to purchase the truck over the telephone,
`
`before seeing it in person. (Doc. No. 179-1 at 75.) During that telephone conversation, he
`
`told the salesman that he wanted “a safe vehicle for my family,” and the salesman
`
`responded he would “not go wrong with this truck.” (DSUF ¶ 35; Doc. No. 179-1 at 76.)
`
`When Johnson purchased the truck, he signed a retail purchase agreement in which he
`
`agreed that he was purchasing the truck “AS-IS” with the exception of warranties
`
`provided by the truck’s manufacturer. (DSUF ¶ 36.)
`
`
`
`On January 30, 2014, the steering linkage package available under recall N49 was
`
`installed on Bright’s truck. (DSUF ¶ 67.) On May 6, 2014, the steering linkage package
`
`available under recall N49 was installed on Looper’s truck. (DSUF ¶ 63.) On May 29,
`
`2015, the steering linkage package available under recall N49 was installed on Johnson’s
`
`truck. (DSUF ¶ 38.)
`
`
`
` 8
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 9 of 18 Page ID #:8812
`
`
`
`Plaintiffs do not dispute that the trucks of all three named plaintiffs—Bright,
`
`Looper, and Johnson—were effectively repaired pursuant to the N49 recall. (Opposition
`
`at 23-24.)
`
`IV. DISCUSSION
`A. Texas Deceptive Trade Practices Act Claim
`Defendant has moved for summary judgment as to Johnson’s claim under the
`
`DTPA. “The elements of a DTPA claim are (1) the plaintiff is a consumer; (2) the
`
`defendant committed a false, misleading, or deceptive act; and (3) the act caused the
`
`consumer’s damages.” Kersh v. UnitedHealthcare Ins. Co., 946 F. Supp. 2d 621, 643
`
`(W.D. Tex. 2013) (citing Tex. Bus. & Com. Code Ann. §§ 17.45(4), 17.50(a)).
`
`
`
`“To prevail on a claim for failure to disclose [under the DTPA], [the plaintiff ] must
`
`prove four elements: (1) a failure to disclose information concerning goods or services, (2)
`
`which was known at the time of the transaction, (3) if such failure was intended to induce
`
`the consumer into a transaction, (4) which the consumer would not have entered had the
`
`information been disclosed.” Head v. U.S. Inspect DFW, Inc., 159 S.W.3d 731, 744 (Tex.
`
`App. 2005) (citing Tex. Bus. & Com.Code Ann. § 17.46(b)(24)). Defendant challenges
`
`Johnson’s claim under the DTPA both procedurally and on the merits.
`
`
`1.
`Defendant argues that Johnson’s claim under the DTPA is barred by the statute of
`
`Statute of Limitations
`
`
`
`limitations. The statute of limitations for a claim seeking relief for violations of the DTPA
`
`is two years. KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746,
`
`749 (Tex. 1999). “The claim accrues when the consumer discovered or in the exercise of
`
`reasonable diligence should have discovered the occurrence of the false, misleading, or
`
`deceptive act or practice.” Id. (internal citation omitted).
`
`
`
` 9
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 10 of 18 Page ID
`#:8813
`
`Texas courts have consistently held that the statute of limitations for a DTPA claim
`
`does not begin to run until discovering “the injury and that it was likely caused by the
`
`wrongful acts of another.” LaGloria Oil & Gas Co. v. Carboline Co., 84 S.W.3d 228, 234-
`
`35 (Tex. App. 2001) (citing Childs v. Haussecker, 974 S.W.2d 31, 40 (Tex. 1998) (emphasis
`
`added); see also Cal Fed Mortgage Co. v. Street, 824 S.W.2d 622, 625 (Tex. App. 1991)
`
`(“[F]or all DTPA actions, limitations begins to run from the date of the occurrence or
`
`discovery of the deceptive act or practice. If the legislature had intended limitations in
`
`DTPA actions to run from the date a consumer suffers damages, that intention could
`
`easily have been expressed in specific terms.”) (emphasis added).
`
`
`
`
`
`Defendant contends that, because Johnson did not file his complaint until more
`
`than two years after he received a recall notice in March 2012, his claim is barred by the
`
`statute of limitations. Essentially, Defendant argues Johnson was put on notice of
`
`Defendant’s allegedly fraudulent conduct at the moment he discovered his truck had a
`
`defect. This argument fails. Mere knowledge of a recall does not put drivers on notice
`
`that they have been victimized by wrongful or deceptive conduct. Cf. In re MyFord
`
`Touch Consumer Litig., 46 F. Supp. 3d 936, 961-62 (N.D. Cal. 2014) (“[E]ven after
`
`successive problems with the [vehicle], that does not in and of itself establish that
`
`Plaintiffs should therefore have known of Ford’s alleged fraud in concealing the extent of
`
`the problems.”) (emphasis in original).
`
`
`
`
`
`Indeed, information suggesting that Defendant may have fraudulently concealed a
`
`known-defect in their trucks was never publically available, and Defendant concedes that
`
`“all of the evidence Johnson relies on . . . to convince this Court that [Defendant] knew of
`
`the purported defect ‘since 2008’ is evidence that he got only through discovery.” (Reply
`
`at 4.) Accordingly, the Court holds that Johnson’s claim is not barred by the statute of
`
`limitations.
`
` 10
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 11 of 18 Page ID
`#:8814
`
`
`
`
`
`
`
`2. Reliance
`
`In order to bring a DTPA claim, Johnson must establish that “[the] false,
`
`misleading, or deceptive act . . . caused [him] damages.” Kersh, 946 F. Supp. 2d at 643.
`
`That is, the consumer must show that he “relied to his detriment on a false or misleading
`
`representation.” Id. (citing Brown & Brown of Tex., Inc., 317 S.W.3d at 387). Defendant
`
`argues that Johnson cannot establish that he relied on a false or misleading representation
`
`because the contract he signed when he purchased the truck stated he was purchasing the
`
`truck “as is.”
`
`
`
`Defendant’s argument is unpersuasive. Texas law does not enforce “as is” clauses
`
`within contracts that were formed due to a fraudulent omission. See, e.g., Ritchey v.
`
`Pinnell, 357 S.W.3d 410, 411-12 (Tex. App. 2012) (“[A]n ‘as is’ clause is not binding on a
`
`purchaser if it is the product of a fraudulent representation or concealment of information
`
`by the seller.”) (citing Prudential Insurance Co. of America v. Jefferson Assocs., Ltd., 896
`
`S.W.2d 156, 161-62 (Tex. 1995)); CAS, Ltd. V. TM Aviation Partners, LP, No. 05-15-
`
`00779, 2016 WL 4151455, at *3 (Tex. App. Aug. 4, 2016) (“A buyer is not bound by an
`
`agreement to purchase something ‘as is’ that he is induced to make because of fraudulent
`
`representation or concealment of information by the seller.”).
`
`
`
`Johnson alleges Defendant employed “false, misleading, or deceptive acts or
`
`practices” to induce him into purchasing his truck. As early as 2007, Defendant’s
`
`employees were aware of the presence of the steering linkage defect and, by April 2010,
`
`one of Defendant’s employees responded to customer complaints concerning tie rod
`
`failures by noting that “[w]e are familiar with this issue . . . . [and] have a long-term
`
`production fix being validated.” (PSUF ¶¶ 24, 49-52.) Moreover, internal emails show
`
`Defendant’s employees were aware that the defect affected all truck models with the
`
` 11
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 12 of 18 Page ID
`#:8815
`
`Cross Car linkage as early as December 2010. (PSUF ¶¶ 73, 75.) Despite that awareness,
`
`Defendant did not announce a recall for the 2500 and 3500 models until the end of June
`
`2011, almost seven months after it announced the initial recall of the 4500 and 5500
`
`models. (PSUF ¶¶ 61, 72, 80.)
`
`
`
`Johnson purchased his model 2500 truck in November 2010, before Defendant
`
`announced any of its recalls, but long after some of Defendant’s employees internally
`
`reported the presence of the defect. Viewing that evidence in the light most favorable to
`
`Johnson as the non-moving party, Barlow, 943 F.2d at 1135, a reasonable juror could find
`
`that Defendant fraudulently withheld information relating to the design defect from the
`
`public for a number of years, including during the time that Johnson purchased his truck.
`
`Defendant, therefore, is not entitled to summary adjudication that the “as is” clause
`prevents Johnson from establishing reliance.5
`
`
`
`
`Defendant also contends that Johnson’s own testimony prevents him from
`
`establishing reliance. Specifically, Defendant points to Johnson’s deposition testimony
`
`that he purchased the truck “over the phone, without seeing it in person, and without
`
`giving serious consideration to purchasing any other truck.” (Motion at 15-16.) Johnson,
`
`however, rebuts that argument by highlighting other portions of his deposition testimony,
`
`in which he stated that: he researched the truck’s safety online before purchasing the
`
`truck; he “bought the truck because of the simple fact of safety”; he told the car salesman
`
`that he wanted “a safe vehicle for my family”; and the salesman responded he would “not
`
`go wrong with this truck.” (Doc. No. 179-1 at 72, 76.) Viewing such evidence in the light
`
`5 As the reasoning above is sufficient to determine that the “as is” provision does not
`preclude Johnson from establishing reliance at this stage of the proceedings, the Court
`declines to reach Plaintiffs’ alternative arguments that non-parties cannot enforce “as
`is” provisions under Texas law and that the “as is” provision is unenforceable in light of
`the totality of the circumstances of this case. See generally Opposition at 17-19.
`
` 12
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 13 of 18 Page ID
`#:8816
`
`most favorable to Johnson, Barlow, 943 F.2d at 1135, it is clear that a reasonable juror
`
`could find that Johnson would not have purchased the truck had the steering defect been
`
`disclosed.
`
`
`
`
`
`
`
`3.
`
`Benefit-of-the-Bargain Damages
`
`“Under Texas common law, direct damages for misrepresentation are measured in
`
`two ways. Out-of-pocket damages measure the difference between the value the buyer has
`
`paid and the value of what he has received; benefit-of-the-bargain damages measure the
`
`difference between the value as represented and the value received. Under the DTPA, a
`
`plaintiff may recover under the damage theory that provides the greater recovery.”
`
`Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 817 (Tex. 1997).
`
`
`
`
`
`Johnson seeks to recover benefit-of-the-bargain damages as reimbursement “for
`
`the difference in value between the non-defective trucks promised and the dangerously
`
`defective trucks [Defendant] actually sold and leased.” Opposition at 20. Defendant
`
`contends that Johnson is not entitled to benefit-of-the-bargain damages because Johnson
`
`already received the benefit of the bargain when his truck was repaired pursuant to Recall
`
`N49.
`
`
`
`
`
`The parties have not submitted, nor has the Court been able to locate, any Texas
`
`state authority addressing whether benefit-of-the-bargain damages are available after the
`defendant has cured a product defect.6 Texas state courts have, however, unequivocally
`
`6 Defendant presents two Texas federal district court opinions as authority, however,
`neither of those opinions are particularly persuasive. See Cox Operating, L.L.C. v. St.
`Paul Surplus Lines Ins. Co., No. H-07-2724, 2012 WL 290027 (S.D. Tex. 2012); U.S. ex
`rel. Stebner v. Steward & Stevenson Servs., Inc., 305 F. Supp. 2d 694 (S.D. Tex. 2004).
`In Cox Operating, the court rejected the plaintiff’s benefit-of-the-bargain claim under
`Texas contract law, in part, because the plaintiff was not “claiming that having the
`[bargained-for] documents in a more timely fashion would have protected it from fraud.”
`
` 13
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 14 of 18 Page ID
`#:8817
`
`stated that parties cannot both “retain all the benefits of the transaction and escape all of
`
`the obligations.” Hendon v. Glover, 761 S.W.2d 120, 122 (Tex. App. 1988) (quoting Talley
`
`v. Nalley, 277 S.W.2d 739, 740 (Tex. Civ. App. 1955)); see also Foley v. Parlier, 68 S.W.3d
`
`870, 883 (Tex. App. 2002) (“The prohibition against double recovery is a corollary of the
`
`rule that a party is entitled to but one satisfaction for the injuries sustained by him.”);
`
`Hart v. Moore, 952 S.W.2d 90, 97 (Tex. App. 1997) (“Double recoveries for alternative
`
`measures of damages are not permitted.”).
`
`
`
`“Benefit of the bargain-type damages place the injured party in as nearly as
`
`possible the position that he would have occupied if the contract had been properly
`
`performed.” Coghlan v. Wellcraft Marine Corp., 240 F.3d 449, 454 (5th Cir. 2001) (citing
`
`Cook v. Rowhanian, 774 S.W.2d 679, 686 (Tex. App. 1989)). As Defendant has repaired
`
`Johnson’s truck, Johnson is already in essentially the same position he would have been in
`
`had Defendant sold him a non-defective truck. Permitting Johnson to retain benefit-of-
`
`the-bargain damages for the difference in value between a non-defective truck and the
`
`defective truck, even though Defendant has repaired his truck, would afford him precisely
`
`the type of double-recovery windfall Texas courts have held is impermissible.
`
`
`
`The above conclusion is bolstered by persuasive authority. This Court previously
`
`rejected an argument almost identical to Johnson’s benefit-of-the-bargain theory in In re
`
`Toyota Motor Corp. Hybrid Brake Mktg., Sales Practices & Prod. Liab. Litig., 288 F.R.D.
`
`445, 449-50 (C.D. Cal. 2013), aff’d sub nom. Kramer v. Toyota Motor Corp., No. 13-
`
`
`2012 WL 290027 at *6. Johnson, however, is claiming that receiving a non-defective
`truck at the time of purchase would have protected him from fraud. Stebner, likewise, is
`of little use to the issues in the present case as it concerned a plaintiff’s benefit-of-the-
`bargain claim under the federal False Claims Act and the court found that the plaintiff
`had “fail[ed] to demonstrate nonconformance that deprives the [benefit] of the bargain.”
`305 F. Supp. 2d at 701.
`
` 14
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 15 of 18 Page ID
`#:8818
`
`56433, 2016 WL 4578370 (9th Cir. Sept. 2, 2016). In In re Toyota Motor Corp., Toyota
`
`discovered a defect in its anti-lock braking system and corrected the issue through a recall
`
`of its Prius and Lexus HS 250h cars. Id. at 449. Following the recall, the plaintiffs filed a
`
`class-action complaint under California law contending they were entitled to benefit-of-
`
`the-bargain damages because “they would not have paid the same purchase price for each
`
`of their vehicles had they known” that the vehicles had a defective anti-lock brake system.
`
`Id. This Court determined the plaintiffs’ argument was “insufficient as a matter of law”
`
`because, “[a]fter the updated software was installed in their vehicles, [the plaintiffs] had
`
`no problems with the braking performance of their vehicles. They were able to apply their
`
`brakes and stop their vehicles without incident. They never sold their vehicles. They
`
`never incurred any expense as a result of any problem with [the anti-lock brake system] in
`
`their vehicles.” Id. In short, this Court held that the plaintiffs were not entitled to
`
`benefit-of-the-bargain damages because they “received exactly what they paid for—that is
`
`a vehicle with a safe and operable [anti-lock brake system].” Id.; see also Waller v.
`
`Hewlett-Packard Co., 295 F.R.D. 472, 487-88 (S.D. Cal. 2013) (rejecting the plaintiffs’
`
`benefit-of-the-bargain theory of injury after the plaintiffs received, through a free software
`
`update that occurred several months after purchasing the product, “just what they paid
`
`for”).
`
`
`
`
`
`Plaintiffs attempt to counter the weight of that authority by citing to several cases
`
`that declined to dismiss similar damages claims at the pleading stage. Of the cases
`
`Plaintiffs rely on in their briefing, In re Gen. Motors LLC Ignition Switch litigation, 14-
`
`MD-2543, 2016 WL 3920353, (S.D.N.Y. July 15, 2016), is the most compelling. In In re
`
`Gen. Motors, the court held that the plaintiffs’ claims for benefit-of-the-bargain damages
`
`were not mooted when General Motors recalled and repaired the defected cars in
`
`question. Id. at *40. The court stressed that the claims were cognizable because the
`
`plaintiffs alleged that the fully repaired cars “were and are worth less than cars sold
`
` 15
`
`

`

`Case 5:14-cv-00700-VAP-DTB Document 202 Filed 10/25/16 Page 16 of 18 Page ID
`#:8819
`
`without the undisclosed defects.” Id. The court determined that, “[b]ecause the recalls,
`
`even those sufficient to remedy the defects, [did] not compensate Plaintiffs for the
`
`damages sought” the benefit-of-the-bargain damages claims were not “prudentially
`
`moot.” Id. (emphasis added).
`
`
`
`Unlike in In re Gen. Motors, Plaintiffs in this case have not argued in their briefing
`
`that the value of the fully repaired trucks is less than the value of a truck that never had a
`
`defect. See generally Opposition at 20-23. Plaintiffs have instead chosen to assert they
`
`are entitled to recover the difference “in the value between the non-defective trucks
`
`promised and the dangerously defective trucks [Defendant] actuall