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Consumers’ claims for automobile defects allowed to proceed

In Mui Ho v. Toyota Motor Corporation, a U.S. district court in the Northern District of California refused to dismiss several consumer claims brought by automobile owners against the manufacturer of the automobiles and the manufacturer's sales company. The owners filed a federal class action suit which alleged certain damages stemming from inherent defects on the subject vehicles.

Background and procedural history

The three named plaintiffs brought a class action on behalf of themselves and all other purchasers or lessees of any 2004 to 2009 model year Toyota Lexus RX vehicles. The suit asserts that the headlamp assemblies on the vehicles are defective because of condensation and moisture retention. The plaintiffs claimed that the defect causes the headlamps to become dangerously dim or to short circuit and fail completely before their expected useful life has run, resulting in significant safety hazards, exposure to the risk of moving violations, and to additional expenses to owners to diagnose and repair the headlight defect.

The plaintiffs claimed that the manufacturer had known about the headlight defect since as early as 2004, and that the manufacturer issued technical service informational bulletins to their dealers in 2007 and 2010 which permitted dealers to provide new headlamps to replace old ones, but that the repair parts were also allegedly defective. The suit further claimed that the manufacturer never disclosed the defects publicly or issued a recall.

The plaintiffs asserted claims under the California Consumer Legal Remedies Act, the California Unfair Competition Law, fraud by omission, breach of implied warranty under the California Song-Beverly Consumer Warranty Act, and breach of express warranty.

The defendants filed a motion to dismiss the suit on the ground that the specific allegations contained in the plaintiffs' pleadings were legally insufficient.

The decision by the district court

The district court ruled that the plaintiff's legal pleadings properly stated a violation of the Consumer Legal Remedies Act. The plaintiff's asserted that the headlamp problem was inherently unsafe and that the defendants knowingly and intentionally concealed the truth about the alleged headlamp problem from the public.

The district court also determined that the plaintiff's pleadings were sufficient to assert a claim of fraud by omission by claiming that the defendants concealed a material safety defect that resulted in harm to the plaintiffs.

Likewise, the court determined that the plaintiff's pleadings adequately asserted that the concealment violated California's Unfair Competition Law as an "unlawful practice," an "unfair business practice," and a "fraudulent business practice."

The district court did, however, dismiss the breach of implied warranty claims filed by two of the plaintiffs who had purchased used vehicles. Under California law, an implied warranty for used consumer goods is provided for a period of up to three months after they are purchased from a distributor or retail seller. Despite the dismissal, the district court gave permission to amend the pleadings to add allegations regarding when and from whom the used automobile was purchased.

With regard to the claims for breach of express warranty, the court stated that the plaintiffs did not need to provide the manufacturer with notice prior to filing suit. However, the court dismissed the breach of express warranty claim of one of the plaintiffs where the repairs were made beyond the warranty's 50,000-mile limit.

Contact an attorney

Individuals who have purchased defective products are urged to seek the advice of a competent attorney experienced in such matters in order to secure the remedies and legal protections provided to consumers under state and federal law.

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