A recent post noted that several recent decisions have undermined the privity requirement that has been applied to breach of implied warranty claims under the U.C.C. in California. A recent Central District of California opinion continues that trend.
In Michael v. Honest Co., No. 15-cv-07059 (C.D. Cal. Dec. 6, 2016), Judge John A. Kronstadt declined to dismiss both express and implied warranty claims under California law. Plaintiffs brought their implied warranty claims under California’s U.C.C. provision, rather than under the Song Beverly Consumer Warranty Act (which does not have a privity requirement).
The court held first that “Plaintiffs’ express warranty claim is sufficiently alleged because vertical privity is not required for such claims.” The court then recognized that while privity is required under the California U.C.C. provision for implied warranty claims, there is a recognized exception for when the plaintiff is a third-party beneficiary of the contract between the manufacturer and retailer. Because plaintiffs had bought a consumer product (sunscreen), the court had no trouble holding plaintiffs were third-party beneficiaries and that the privity requirement did not apply.… Read more
California allows for two different types of implied warranty claims. The first arises under the Uniform Commercial Code, and the second arises under the Song Beverly Consumer Warranty Act. Claims under the two statutes differ in a few ways, but perhaps most notably is the privity requirement that exists for the U.C.C. claim, but not for the Song Beverly Claim. Several recent opinions have undermined the U.C.C.’s privity requirement in the context of automotive defect class actions.
In Bryde v. General Motors, the plaintiffs alleged they bought vehicles with defective airbag systems. 2016 WL 6804584, at *15 (N.D. Cal. Nov. 17, 2016). Plaintiffs brought several claims, including a California U.C.C. implied warranty claim. GM sought to dismiss the U.C.C. claim on the grounds that a claim under California Commercial Code section 2314 requires vertical privity. See Sec. 2314 (“a plaintiff asserting breach of warranty claims must stand in vertical contractual privity with the defendant”). Rather than contesting the privity requirement, plaintiffs argued that an exception applies where plaintiff is a third-party beneficiary to a contract that gives rise to the implied warranty.
Judge William H. Orrick agreed. He noted first that “in a previous decision, I declined to recognize the third-party beneficiary exception under California law,” interpreting prior cases as foreclosing the exception. … Read more
Dating back to 2009, when the California Court of Appeal decided Mexia v. Rinker Boat Co., there has been a debate about when Song Beverly implied warranty claims must be brought by. Within a year of sale? Within four years? Or later?
The text of the statute can be read to suggest one year: it states that the duration of an implied warranty can last no “more than one year following the sale.” Cal. Civ. Code § 1791.1(c). But Mexia held that with “a latent defect, a product is rendered unmerchantable, and the warranty of merchantability is breached, by the existence of the unseen defect, not by its subsequent discovery.” 95 Cal. Rptr. 3d at 291. Last December, the Ninth Circuit in Daniel v. Ford Motor Co., held that despite the post-Mexia uncertainty of the past 6 years, “there is not convincing evidence that the California Supreme Court would decide the latent defect discovery issue that was presented in Mexia differently.” As a result, the defect need not manifest, and the implied warranty claim need not be brought, within one year of the sale.
The new question, then, is whether there is any deadline for a Song Beverly implied warranty claim. … Read more
Judge Amy St. Eve’s recent motion to dismiss ruling in the In re Rust-Oleum Restore Marketing, Sales Practices and Products Liability Litigation, 2016 WL 74671 (N.D. Ill. Jan. 7, 2016), is worthy of review — it covers a range of warranty and consumer protection issues.
The opinion is noted without further analysis since my colleagues and I contributed to the pleadings.… Read more