Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 1 of 125 Page ID #:225 1 2 3 4 5 6 7 8 9 10 11 12 13 PENELOPE A. PREOVOLOS (CA SBN 87607) PPreovolos@mofo.com DANIEL JAMES WILSON (CA SBN 299239) DWilson@mofo.com MORRISON & FOERSTER LLP 425 Market Street San Francisco, California 94105-2482 Telephone: 415.268.7000 KIMBERLY R. GOSLING (CA SBN 247803) KGosling@mofo.com MORRISON & FOERSTER LLP 12531 High Bluff Drive, Suite 100 San Diego, California 92130-2040 Telephone: 858.720.5100 SEAN GATES (CA SBN 186247) SGates@charislex.com CHARIS LEX, P.C. 16 N. Marengo Avenue, Suite 300 Pasadena, California 91101 Telephone: 626.508.1717 Attorneys for Defendant TESLA, INC. 14 UNITED STATES DISTRICT COURT 15 CENTRAL DISTRICT OF CALIFORNIA 16 SOUTHERN DIVISION 17 18 19 20 21 22 JI CHANG SON, GHODRAT KHANSARI, MADHUSUDHANA SHASTRULA, ALI JARRAHI, and MICHAEL TOMKO individually and on behalf of all others similarly situated, and K.M.S., a minor by and through his Guardian ad Litem YUN SOO OH, 23 Plaintiffs, 24 25 26 v. TESLA, INC., Case No. 8:16-cv-02282-JVS (KESx) NOTICE OF MOTION AND MOTION; DEFENDANT TESLA, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS AND/OR STRIKE Date: May 1, 2017 Time: 1:30 p.m. Crtrm: 10C Hon. James V. Selna Defendant. 27 28 sf-3750199 Case No. 8:16-cv-02282-JVS (KESx) TESLA’S MOTION TO DISMISS AND/OR STRIKE Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 2 of 125 Page ID #:226 1 NOTICE OF MOTION AND MOTION 2 PLEASE TAKE NOTICE that on May 1, 2017, at 1:30 p.m., or as soon 3 thereafter as the matter may be heard, in Courtroom 10C of this Court, located at 4 411 West 4th Street, Santa Ana, California, Defendant Tesla, Inc. (“Tesla”), will 5 and hereby does move this Court for an order dismissing the fourth, sixth, seventh, 6 eighth, thirteenth, fourteenth, fifteenth, seventeenth, eighteenth, twentieth, twenty- 7 third, and twenty-fourth causes of action. Dismissal is warranted, pursuant to 8 Federal Rule of Civil Procedure 12(b)(6), because Plaintiffs fail to state a claim for 9 relief in each of these causes of action. 10 Tesla also moves for an order, pursuant to Rules 12(b)(6) and 12(f), 11 dismissing and/or striking as immaterial the class allegations associated with 12 Plaintiffs’ claim under the Ohio Consumer Sales Practices Act. 13 The motion is based upon this Notice; the accompanying Memorandum of 14 Points and Authorities; the pleadings, files, and records in this action; and such 15 additional evidence and arguments as may be presented at the hearing of this 16 motion. 17 18 This motion is made following a conference of counsel pursuant to Civil Local Rule 7-3, which took place on March 24, 2017. 19 20 March 31, 2017 21 Respectfully submitted, MORRISON & FOERSTER LLP 22 By: /s/ Penelope Preovolos Penelope Preovolos Attorneys for Defendant TESLA, INC. 23 24 25 26 27 28 sf-3750199 Case No. 8:16-cv-02282-JVS (KESx) TESLA’S NOTICE OF MOTION AND MOTION Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 3 of 125 Page ID #:227 1 TABLE OF CONTENTS 2 MEMORANDUM OF POINTS AND AUTHORITIES ........................................ III 3 I. INTRODUCTION........................................................................................... 1 4 II. BACKGROUND............................................................................................. 2 5 III. LEGAL STANDARD..................................................................................... 3 6 A. Motion to Dismiss Under Fed. R. Civ. P.............................................. 3 7 B. Motion to Strike Under Fed. R. Civ. P ................................................. 3 8 IV. ARGUMENT .................................................................................................. 4 10 The Court Should Dismiss Plaintiffs’ Claims for Breach of Express Warranty and Breach of Contract/Common Law Warranty (Claims 4, 6, 7, 8, 15, 17, 20, and 24) .................................. 4 11 1. 9 A. 12 13 Plaintiffs Fail to State a Claim Based Tesla’s Express Basic Vehicle Limited Warranty................................................ 5 a. Because Tesla’s Basic Vehicle Limited Warranty Covers Only Materials or Workmanship Defects, It Does Not Cover Design Defects ...................................... 5 b. Courts Clearly Differentiate Between Manufacturing and Design Defects.................................. 6 c. Plaintiffs’ Express Warranty Claims Fail Because Plaintiffs Allege Only a Design Defect............................ 8 14 15 16 17 2. 18 19 20 B. The Court Should Dismiss the Ohio Deceptive Trade Practices Act Claim Because the Act Does Not Allow Claims by Consumers (Claim 23) ........................................................................ 11 C. The Court Should Dismiss or, in the Alternative, Strike the Class Allegations from the Ohio Consumer Sales Practices Act Claim Because Plaintiffs Fail to Plead Notice (Claim 22) ................. 12 D. The Court Should Dismiss the Georgia Uniform Deceptive Trade Practices Act Claim Because Plaintiff Shastrula Does Not and Cannot Plead a Likelihood of Future Injury (Claim 13).............. 14 21 22 23 24 Tesla’s Marketing Statements Cannot Support Plaintiffs’ Express Warranty Claims ......................................................... 10 25 26 27 28 i Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 4 of 125 Page ID #:228 1 E. The Court Should Dismiss the Georgia Fair Business Practices Act Claim Because Plaintiff Shastrula Does Not and Cannot Allege That He Provided the Requisite Pre-Suit Notice (Claim 14) ....................................................................................................... 16 F. The Court Should Dismiss the Unjust Enrichment Claim Under Georgia Law Because Plaintiff Shastrula Has an Adequate Remedy at Law and Alleges an Enforceable Contract (Claim 18) .... 17 2 3 4 5 6 V. CONCLUSION ............................................................................................. 18 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 5 of 125 Page ID #:229 1 TABLE OF AUTHORITIES 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Page(s) Cases Am. Casual Dining, L.P. v. Moe’s Sw. Grill, LLC, 426 F. Supp. 2d 1356 (N.D. Ga. 2006) ............................................................... 18 Apodaca v. Whirlpool Corp., No. SACV 13-00725 JVS (ANx), 2013 U.S. Dist. LEXIS 176363 (C.D. Cal. Nov. 8, 2013) ....................................................................................... 5 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .............................................................................................. 3 Banks v. ICI Ams., 264 Ga. 732 (1994)................................................................................................ 7 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .............................................................................................. 3 Brothers v. Hewlett-Packard Co., No. C-06-02254, 2007 U.S. Dist. LEXIS 13155 (N.D. Cal. Feb. 12, 2007) ...................................................................................... 6 Brown Realty Assocs., Inc. v. Thomas, 193 Ga. App. 847 (1989)..................................................................................... 16 Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir. 2010)............................................................................... 17 Castaneda v. Fila USA, Inc., No. 11-CV-1033-H (BGS), 2011 WL 7719013 (S.D. Cal. Aug. 10, 2011)...................................................................................... 4 Catrett v. Landmark Dodge, Inc., 253 Ga. App. 639 (2002)..................................................................................... 15 Cipollone v. Liggett Grp., Inc., 505 U.S. 504 (1992) .............................................................................................. 5 27 28 iii Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 6 of 125 Page ID #:230 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Clark v. LG Elecs., U.S.A., Inc., No. 13-cv-485 JM (JMA), 2013 U.S. Dist. LEXIS 155179 (S.D. Cal. Oct. 29, 2013)................................................................................... 5, 9 Collins v. GameStop Corp., No. C10-1210 TEH, 2010 U.S. Dist. LEXIS 88878 (N.D. Cal. Aug. 6, 2010) ....................................................................................... 4 Cook v. Citibank, N.A., No. 1:12-CV-03765-RWS-GGB, 2013 U.S. Dist. LEXIS 193519 (N.D. Ga. Mar. 20, 2013), adopted by 2013 U.S. Dist. LEXIS 193517 (N.D. Ga. July 16, 2013) ........................................................................ 16 Corcoran v. CVS Health Corp., 169 F. Supp. 3d 970 (N.D. Cal. 2016) .......................................................... 13, 16 Davidson v. Apple, Inc., No. 16-CV-04942-LHK, 2017 U.S. Dist. LEXIS 36524 (N.D. Cal. Mar. 14, 2017) ..................................................................................... 5 Dawson v. Blockbuster, Inc., 2006-Ohio-1240, 2006 WL 1061769 (Ct. App. 2006), appeal not allowed, 110 Ohio St. 3d 1442 (Ohio 2006) ....................................................... 12 Garcia v. Chrysler Grp., 127 F. Supp. 3d 212 (S.D.N.Y. 2015).......................................................... passim Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147 (1982) .............................................................................................. 4 Gertz v. Toyota Motor Corp., No. CV 10-1089 PSG, 2011 U.S. Dist. LEXIS 94183 (C.D. Cal. Aug. 22, 2011) ............................................................................. 6, 7, 8 Gibbs v. Abbott Labs., Inc., No. 01-C-1315, 2001 U.S. Dist. LEXIS 20411 (N.D. Ill. Dec. 4, 2001)........................................................................................ 16 Goldstein v. Home Depot U.S.A., Inc., 609 F. Supp. 2d 1340 (N.D. Ga. 2009) ............................................................... 18 27 28 iv Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 7 of 125 Page ID #:231 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Gray v. Abbott Labs., No. 10-cv-6377, 2011 U.S. Dist. LEXIS 80189 (N.D. Ill. July 22, 2011) ................................................................................ 17, 18 Grieco v. Tecumseh Prods. Co., No. 4:12-cv-195, 2013 U.S. Dist. LEXIS 152405 (S.D. Ga. Oct. 23, 2013)...................................................................................... 10 Hansen v. Freedom Mobility, Inc., No. 5:08-CV-131-DCK, 2010 U.S. Dist. LEXIS 101882 (W.D.N.C. Sept. 24, 2010) .................................................................................... 6 Holbrook v. La.-Pac. Corp., 533 F. App’x 493 (6th Cir. 2013).................................................................. 11, 12 In re Experian Data Breach Litig., No. SACV 15-1592 (AG), 2016 WL 7973595 (C.D. Cal. Dec. 29, 2016).................................................................................... 11 In re Oreck Corp. Halo Vacuum & Air Purifiers Mktg. & Sales Practices Litig., No. ML 12-2317 CAS, 2012 WL 6062047 (C.D. Cal. Dec. 3, 2012) .... 11, 13, 14 In re Porsche Cars N. Am., Inc. Plastic Coolant Tubes Prods. Liab. Litig., 880 F. Supp. 2d 801 (S.D. Ohio 2012)................................................................ 15 In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prods. Liab. Litig., 754 F. Supp. 2d 1145 (C.D. Cal. 2010)............................................................... 10 Johnson v. Riverside Healthcare Sys., 534 F.3d 1116 (9th Cir. 2008)............................................................................... 3 Marrone v. Philip Morris, USA, Inc., 110 Ohio St. 3d 5 (2006) ............................................................................... 13, 14 McCabe v. Am. Honda Motor Co., 100 Cal. App. 4th 1111 (2002)...................................................................... 7, 8, 9 Miller v. ALZA Corp., 759 F. Supp. 2d 929 (S.D. Ohio 2010).................................................................. 7 28 v Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 8 of 125 Page ID #:232 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mitsubishi Int’l Corp. v. Cardinal Textile Sales, Inc., 14 F.3d 1507 (11th Cir. 1994)............................................................................. 17 Moore-Davis Motors, Inc. v. Joyner, 252 Ga. App. 617 (2001)..................................................................................... 14 Otto v. Abbott Labs., Inc., No. 5:12-cv-01411-SVW-DTB, 2013 WL 12131380 (C.D. Cal. Aug. 2, 2013) ..................................................................................... 12 Pake v. Byrd, 55 N.C. App. 551 (1982)..................................................................................... 11 Phillips v. Philip Morris Cos., 290 F.R.D. 476 (N.D. Ohio 2013)................................................................. 11, 12 Resnick v. Hyundai Motor Am., Inc., No. 16-00593-BRO, 2016 U.S. Dist. LEXIS 160179 (C.D. Cal. Nov. 14, 2016) ............................................................................. 10, 11 Rice v. Sunbeam Prods., No. CV 12-7923-CAS, 2013 U.S. Dist. LEXIS 7467 (C.D. Cal. Jan. 7, 2013)..................................................................................... 5, 9 Sater v. Chrysler Grp., LLC, No. EDCV 14-00700-VAP, 2015 WL 736273 (C.D. Cal. Feb. 20, 2015) .................................................................................. 7, 9 Sparks v. Oxy-Health, LLC, 134 F. Supp. 3d 961 (E.D.N.C. 2016)................................................................... 7 Susilo v. Wells Fargo Bank, N.A., 796 F. Supp. 2d 1177 (C.D. Cal. 2011)................................................................. 4 Tait v. BSH Home Appliances Corp., No. SACV 10-711 DOC, 2011 U.S. Dist. LEXIS 54456 (C.D. Cal. May 12, 2011).................................................................................. 6, 8 Terlesky v. Fifth Dimension, Inc., No. 1:15-cv-374, 2015 U.S. Dist. LEXIS 155236 (S.D. Ohio Nov. 17, 2015) ............................................................................ 11, 12 Terrill v. Electrolux Home Prods., Inc., 753 F. Supp. 2d 1272 (S.D. Ga. 2010) .................................................... 14, 15, 18 vi Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 9 of 125 Page ID #:233 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Tietsworth v. Sears, Roebuck & Co., 720 F. Supp. 2d 1123 (N.D. Cal. 2010) ................................................................ 4 Troup v. Toyota Motor Corp., 545 F. App’x 668 (9th Cir. 2013)...................................................................... 6, 9 Vinson v. J.M. Smucker Co., No. CV 12-4936-GHK, 2013 U.S. Dist. LEXIS 183515 (C.D. Cal. Mar. 25, 2013).................................................................................... 13 Volbers-Klarich v. Middletown Mgmt., Inc., 125 Ohio St. 3d 494 (2010) ........................................................................... 13, 14 Whitt v. Mazda Motor of Am., Inc., 2011-Ohio-3097 .................................................................................................... 6 Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970 (9th Cir. 2010)................................................................................. 3 Young v. Carrier Corp., No. 4:14CV0974, 2014 U.S. Dist. LEXIS 163451 (N.D. Ohio Nov. 21, 2014).................................................................................. 11 Statutes Cal. Civ. Code § 1761(d) ............................................................................................................. 12 20 Ga. Code Ann. § 10-1-370 et seq. ................................................................................................ 14 § 10-1-399(b)................................................................................................. 16, 17 21 Rules 22 Fed. R. Civ. P. 12(b)(6).................................................................................................................. 3 12(f) ....................................................................................................................... 3 19 23 24 25 26 27 28 vii Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 10 of 125 Page ID #:234 1 2 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION 3 Defendant Tesla, Inc.’s (“Tesla”) mission is to accelerate the world’s 4 transition to sustainable energy. Among other things, Tesla designs, manufactures, 5 and sells the world’s most advanced zero-emissions, all-electric vehicles, including 6 its Model S sedan, introduced in 2012, and its Model X sports utility vehicle, 7 introduced in 2015. 8 Plaintiffs are purchasers of both models. They allege that all Model S and 9 Model X vehicles are susceptible to sudden unintended acceleration (“SUA”), 10 either because one or more vehicle systems are defectively designed or because 11 Tesla did not do what no manufacturer has ever done—“develop and implement 12 computer algorithms that would eliminate the danger of full throttle acceleration 13 into fixed objects” even if it is caused by human error. (FAC ¶ 34.) Tesla’s data 14 demonstrates that each of the SUA incidents alleged in the FAC resulted from 15 human error, and Tesla disputes that there is a legal duty to design a failsafe car. 16 However, for purposes of this motion, which requires that the Court assume the 17 truth of Plaintiffs’ allegations, Tesla moves to dismiss 13 of the 27 causes of action 18 in Plaintiffs’ First Amended Complaint (“FAC”) on the ground that they are fatally 19 defective under the laws applicable to those claims. 20 First, all of the Plaintiffs’ express warranty claims should be dismissed 21 because Plaintiffs plainly allege a design defect with respect to Tesla’s entire fleet, 22 not a defect in “materials or workmanship” covered by Tesla’s express Basic 23 Vehicle Limited Warranty. Further, to the extent that Plaintiffs rely on alleged 24 marketing statements by Tesla outside the written warranty to create a separate 25 “express warranty,” those claims also fail because no Plaintiff alleges that he ever 26 read or saw a single one of the alleged statements. The Court thus should dismiss 27 all of Plaintiffs’ claims for breach of express warranty and breach of 28 1 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 11 of 125 Page ID #:235 1 contract/common law warranty. A number of the named Plaintiffs’ other claims also suffer from fatal legal 2 3 flaws and should be dismissed. Plaintiff Michael Tomko’s Ohio Deceptive Trade 4 Practices Act claim fails because that Act does not allow lawsuits by a consumer. 5 Further, Tomko’s class allegations under the Ohio Consumer Sales Practices Act 6 claim should be dismissed or, in the alternative, stricken, because Plaintiffs do not 7 plead a prior regulation or court ruling finding the specific practice alleged to be 8 unconscionable or deceptive, as the statute requires. Similarly, three of plaintiff Madhusudhana Shastrula’s Georgia-law claims 9 10 (in addition to his express warranty-based claims) are legally defective and should 11 be dismissed. His Georgia Uniform Deceptive Trade Practices Act claim fails 12 because the Act is limited to claims for injunctive relief for future injury; it does not 13 permit claims based upon the past purchase of an allegedly defective product (even 14 under the theory that it might one day inflict future harm). Shastrula’s Georgia Fair 15 Business Practices Act claim is also defective because he has failed to provide (and 16 plead) 30 days’ pre-suit written notice, which cannot be cured by amendment and 17 requires dismissal with prejudice. Finally, his unjust enrichment claim fails 18 because Georgia law prohibits such a claim where, as here, a plaintiff has adequate 19 remedies at law or alleges an enforceable contract. For these reasons, Tesla respectfully asks that the Court dismiss Plaintiffs’ 20 21 fourth, sixth, seventh, eighth, thirteenth, fourteenth, fifteenth, seventeenth, 22 eighteenth, twentieth, twenty-third, and twenty-fourth causes of action, and dismiss 23 and/or strike the class allegations from the twenty-second cause of action. 24 II. 25 BACKGROUND Plaintiffs Ji Chang Son and his minor son, K.M.S., filed this putative class 26 action on December 30, 2016. (ECF No. 1.) The original Complaint asserted 27 claims related only to the Model X, under California and federal law. The First 28 Amended Complaint (“FAC”), filed on March 1, 2017, added four named 2 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 12 of 125 Page ID #:236 1 plaintiffs—Ali Jarrahi, Ghodrat Khansari, Madhusudhana Shastrula, and Michael 2 Tomko; claims related to the Model S; and claims under Georgia, North Carolina, 3 and Ohio law. (ECF No. 25.) Every claim in the FAC arises out of the allegation that the Model S and 4 5 Model X are defective because they are prone to sudden, unintended acceleration. 6 Plaintiffs speculate about possible design defects in various vehicle systems that 7 could have caused such acceleration, but contend that, even if such acceleration 8 resulted from human error, Tesla should have developed a failsafe system to 9 prevent it. Based on this central allegation, Plaintiffs assert 27 claims for violations 10 of consumer protection statutes, breaches of warranty and contract, and product 11 liability. 12 III. LEGAL STANDARD 13 A. 14 Under Rule 12(b)(6), a complaint must contain “more than labels and 15 conclusions” or “a formulaic recitation of the elements of a cause of action.” Bell 16 Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A “complaint must allege 17 sufficient facts to state the elements of” each cause of action to survive dismissal. 18 Johnson v. Riverside Healthcare Sys., 534 F.3d 1116, 1122 (9th Cir. 2008). A 19 court is “not bound to accept as true a legal conclusion couched as a factual 20 allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). Motion to Dismiss Under Fed. R. Civ. P. 12(b)(6) 21 B. 22 Under Rule 12(f), the Court may “strike from a pleading . . . any redundant, Motion to Strike Under Fed. R. Civ. P. 12(f) 23 immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f) (emphasis 24 added). “Immaterial” means “that which has no essential or important relationship 25 to the claim for relief or the defenses being plead.” Whittlestone, Inc. v. Handi- 26 Craft Co., 618 F.3d 970, 974 (9th Cir. 2010) (citation omitted). This includes 27 improper class allegations, which the Court has “the authority to strike . . . prior to 28 discovery if the complaint demonstrates that a class action cannot be maintained.” 3 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 13 of 125 Page ID #:237 1 Tietsworth v. Sears, Roebuck & Co., 720 F. Supp. 2d 1123, 1146 (N.D. Cal. 2010); 2 see also Collins v. GameStop Corp., No. C10-1210 TEH, 2010 U.S. Dist. LEXIS 3 88878, at *5 (N.D. Cal. Aug. 6, 2010) (same); Castaneda v. Fila USA, Inc., No. 11- 4 CV-1033-H (BGS), 2011 WL 7719013, at *2 (S.D. Cal. Aug. 10, 2011) (partly 5 granting motion to strike after finding class definition “overly broad”); Gen. Tel. Co. 6 of Sw. v. Falcon, 457 U.S. 147, 160 (1982) (“[s]ometimes the issues are plain 7 enough from the pleadings to determine whether” class claims are proper). “The essential function of a Fed. R. Civ. P. 12(f) motion is to avoid the 8 9 expenditure of time and money that must arise from litigating spurious issues.” 10 Susilo v. Wells Fargo Bank, N.A., 796 F. Supp. 2d 1177, 1196 (C.D. Cal. 2011) 11 (citation omitted). 12 IV. 13 ARGUMENT A. 14 15 The Court Should Dismiss Plaintiffs’ Claims for Breach of Express Warranty and Breach of Contract/Common Law Warranty (Claims 4, 6, 7, 8, 15, 17, 20, and 24) As Plaintiffs admit in the FAC, Tesla’s express “Basic Vehicle Limited 16 Warranty” extends only to “defects in the materials or workmanship of any parts 17 manufactured or supplied by Tesla.” (FAC ¶ 142.) Courts have routinely held that 18 such warranties do not cover design defects. Plaintiffs speculate about potential 19 defects in various vehicle systems, including that Tesla did not create a “fail-safe” 20 mechanism to prevent all SUA incidents, even if they were caused by driver 21 negligence. Under any of these theories, Plaintiffs are unquestionably alleging that 22 all Model S and Model X vehicles have a uniform design defect, a claim not 23 covered by Tesla’s Basic Vehicle Limited Warranty. Moreover, Plaintiffs cannot 24 avoid this result by relying on their boilerplate incantations of “manufacturing,” 25 “materials,” or “workmanship” defects. Courts reject the use of such conclusory 26 allegations to end-run the scope of an express warranty. 27 28 Further, to the extent Plaintiffs seek to treat other marketing statements by Tesla as express warranties, their claims still fail. To state a claim based on 4 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 14 of 125 Page ID #:238 1 statements outside an express written warranty, Plaintiffs must allege that they 2 actually saw the statements; none of the Plaintiffs does so. Accordingly, Plaintiffs’ 3 eight express warranty claims—including their claims for breach of express 4 warranty and breach of contract/common law warranty1—should be dismissed. 5 1. 6 a. 7 8 9 Plaintiffs Fail to State a Claim Based Tesla’s Express Basic Vehicle Limited Warranty Because Tesla’s Basic Vehicle Limited Warranty Covers Only Materials or Workmanship Defects, It Does Not Cover Design Defects “A manufacturer’s liability for breach of an express warranty derives from, 10 and is measured by, the terms of that warranty.” Cipollone v. Liggett Grp., Inc., 11 505 U.S. 504, 525 (1992). Where a warranty covers only defects in “materials” and 12 “workmanship,” courts applying the laws of California, Georgia, North Carolina, 13 and Ohio have consistently held that a design defect does not breach that warranty, 14 and that a claim based on such a design defect should be dismissed. See, e.g., 15 Apodaca v. Whirlpool Corp., No. SACV 13-00725 JVS (ANx), 2013 U.S. Dist. 16 LEXIS 176363, at *25 (C.D. Cal. Nov. 8, 2013) (Selna, J.) (“an express written 17 warranty covering ‘materials and workmanship’ does not include design defects”) 18 (citation omitted); Davidson v. Apple, Inc., No. 16-CV-04942-LHK, 2017 U.S. Dist. 19 LEXIS 36524, at *34 (N.D. Cal. Mar. 14, 2017) (same); Clark v. LG Elecs., U.S.A., 20 Inc., No. 13-cv-485 JM (JMA), 2013 U.S. Dist. LEXIS 155179, at *23-25 (S.D. 21 Cal. Oct. 29, 2013) (written warranty covering “materials and workmanship” does 22 not cover design defects); Rice v. Sunbeam Prods., No. CV 12-7923-CAS (AJWx), 23 24 25 26 27 28 1 The claims are: statutory breach of express warranty under California, Georgia, and Ohio law (claims 4, 15, and 24); breach of written warranty under the Magnuson-Moss Warranty Act (claim 6); breach of express warranty under the California Song-Beverly Act (claim 8); and breach of contract/common law warranty under California, Georgia, and North Carolina law (claims 7, 17, and 20). 5 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 15 of 125 Page ID #:239 1 2 2013 U.S. Dist. LEXIS 7467, at *37-38 (C.D. Cal. Jan. 7, 2013) (same).2 In Troup v. Toyota Motor Corp., 545 F. App’x 668 (9th Cir. 2013), the Ninth 3 Circuit affirmed the dismissal of an express warranty claim where the warranty 4 covered only “defects in materials or workmanship.” Id. at 668-69. Although the 5 complaint contained “scattered” references to defects in “materials,” the Ninth 6 Circuit found these allegations inadequate because the “gravamen” of the complaint 7 suggested a design defect. Id. at 669. Courts applying Georgia, North Carolina, 8 and Ohio law have reached similar results. See Garcia v. Chrysler Grp., 127 F. 9 Supp. 3d 212, 225-27 (S.D.N.Y. 2015) (dismissing Georgia plaintiffs’ claim for 10 breach of materials and workmanship warranty because complaint made only 11 “offhand references to manufacturing defects,” and the allegations generally 12 suggested design defect); Hansen v. Freedom Mobility, Inc., No. 5:08-CV-131- 13 DCK, 2010 U.S. Dist. LEXIS 101882, at *2, *14-15 (W.D.N.C. Sept. 24, 2010) 14 (granting summary judgment in favor of North Carolina defendant where 15 unsupported allegation that wheelchair was improperly “manufactured” did not 16 show breach of materials and workmanship warranty); Whitt v. Mazda Motor of 17 Am., Inc., 2011-Ohio-3097 at ¶¶ 20-24 (affirming summary judgment in favor of 18 Ohio defendant where plaintiff alleged design defect that warranty did not cover). 19 Accordingly, because Tesla’s Basic Vehicle Limited Warranty covers only 20 “materials or workmanship” defects, design defects are excluded. 21 b. 22 23 Courts Clearly Differentiate Between Manufacturing and Design Defects The law draws a clear distinction between manufacturing defects (including 24 25 26 27 28 2 See also Gertz v. Toyota Motor Corp., No. CV 10-1089 PSG, 2011 U.S. Dist. LEXIS 94183, at *10-11 (C.D. Cal. Aug. 22, 2011) (same); Tait v. BSH Home Appliances Corp., No. SACV 10-711 DOC, 2011 U.S. Dist. LEXIS 54456, at *9-10 (C.D. Cal. May 12, 2011) (same); Brothers v. Hewlett-Packard Co., No. C-0602254, 2007 U.S. Dist. LEXIS 13155, at *14 (N.D. Cal. Feb. 12, 2007) (same). 6 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 16 of 125 Page ID #:240 1 2 defects in materials or workmanship) and design defects. A manufacturing defect exists when a specific unit in a product line “is 3 produced in a substandard condition” and “perform[s] differently from other 4 ostensibly identical units of the same product line.” McCabe v. Am. Honda Motor 5 Co., 100 Cal. App. 4th 1111, 1120 (2002); see also Banks v. ICI Ams., 264 Ga. 732, 6 733 (1994) (under Georgia law, existence of “manufacturing defect” can be 7 determined by “simply comparing [an item in the product line] to a properly 8 manufactured item from the same product line”); Sparks v. Oxy-Health, LLC, 134 9 F. Supp. 3d 961, 986 (E.D.N.C. 2016) (in North Carolina, “manufacturing defect” 10 is defined by Third Restatement of Torts, which requires that the “product depart[] 11 from its intended design”); Miller v. ALZA Corp., 759 F. Supp. 2d 929, 941 (S.D. 12 Ohio 2010) (under Ohio law, manufacturing defect exists when product “deviated 13 in a material way from the design specifications, formula, or performance standards 14 of the manufacturer, or from otherwise identical units”). 15 By contrast, a design defect exists when “the product is built in accordance 16 with its intended specifications, but the design itself is inherently defective.” 17 McCabe, 100 Cal. App. 4th at 1120. In Gertz v. Toyota Motor Corp., No. CV 10- 18 1089 PSG (VBKx), 2011 U.S. Dist. LEXIS 94183 (C.D. Cal. Aug. 22, 2011), the 19 court held that the plaintiffs had alleged a design defect where their “pleadings 20 [made] clear that the alleged . . . defects . . . exist[ed] with respect to all of Toyota’s 21 2004-2009 Prius vehicles, not merely the particular vehicle owned by [plaintiffs].” 22 Id. at *10 (rejecting argument that plaintiffs alleged materials or workmanship 23 defect falling within Toyota’s express warranty). Similarly, the plaintiffs in Sater v. 24 Chrysler Grp., LLC, No. EDCV 14-00700-VAP (DTBx), 2015 WL 736273 (C.D. 25 Cal. Feb. 20, 2015), pled a design defect where the complaint alleged a “uniform” 26 defect and the plaintiffs “define[d] the class as all purchasers . . . indicating the 27 trucks were built in the manner Chrysler intended (but the intended manner was 28 faulty).” Id. at *4 (Chrysler’s express warranty covering defects in “material, 7 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 17 of 125 Page ID #:241 1 workmanship or factory preparation” did not cover this alleged design defect); 2 Garcia, 127 F. Supp. 3d at 227 (Georgia plaintiff’s complaint alleged design defect 3 because plaintiff alleged all vehicles were defective and sought to represent class of 4 “all persons” who purchased such vehicles). 5 c. 6 Plaintiffs’ Express Warranty Claims Fail Because Plaintiffs Allege Only a Design Defect 7 The various theories in the FAC allege only a defect in design. Although 8 Plaintiffs invoke the words “manufacturing,” “materials,” and “workmanship,” 9 these boilerplate and conclusory allegations cannot survive a motion to dismiss. 10 According to Plaintiffs, the purported defect is that Tesla’s vehicles are 11 allegedly prone to sudden, unintended acceleration. Plaintiffs allege that the sudden 12 acceleration may be caused by defects in various vehicle systems or by driver 13 negligence, but that, in any event, Tesla should have designed a failsafe system to 14 prevent it. Tesla contends that each sudden acceleration incident alleged in the FAC 15 was the result of driver error, denies that its cars are defective in any way, and 16 disputes that there is a legal duty to design a failsafe car. But for purposes of this 17 motion, it is clear that all Plaintiffs’ theories postulate a design defect that applies to 18 all Model S and Model X vehicles. 19 For instance, Plaintiffs allege: “What has become evident . . . is that Tesla 20 vehicles are susceptible to sudden unintended acceleration.” (FAC ¶ 20.) Plaintiffs 21 similarly allege that “[t]he Model S and Model X . . . are defective in that they are 22 vulnerable to incidents of sudden full power unintended acceleration.” (Id. ¶ 84). 23 These are the hallmarks of a design defect claim. Indeed, the section of the FAC 24 that purports to set forth the “Defects in the Model S and Model X” (id. ¶¶ 84-86) 25 unequivocally alleges that all Model S and Model X vehicles are defectively 26 designed. See, e.g., McCabe, 100 Cal. App. 4th at 1120; Gertz, 2011 U.S. Dist. 27 LEXIS 94183, at *10; Tait, 2011 U.S. Dist. LEXIS 54456, at *9. Plaintiffs also 28 seek to represent a purported class of “[a]ll persons or entities . . . who are current 8 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 18 of 125 Page ID #:242 1 owners and/or lessees of a Tesla Model S or Model X,” which further confirms that 2 their claims are predicated on an alleged fleet-wide design defect. (FAC ¶ 91 3 (emphasis added).) See Sater, 2015 WL 736273, at *4. 4 In contrast, nothing in the FAC suggests that Plaintiffs are alleging a defect 5 in “manufacturing” or “materials and workmanship,” and Plaintiffs do not allege a 6 single fact or theory that suggests such a defect. Plaintiffs do not allege that Tesla 7 assembled particular vehicles improperly, or that certain vehicles “perform 8 differently from other ostensibly identical units of the same product line,” McCabe, 9 100 Cal. App. 4th at 1120. They do not even refer to the materials used to build the 10 Model S or Model X, let alone point to any issues with such materials. And 11 although Plaintiffs recite the words “manufacturing,” “materials,” and 12 “workmanship,” courts regularly reject such conclusory allegations as the basis for 13 shoehorning design claims into a “materials and workmanship” express warranty. 14 Garcia illustrates this point. In Garcia, the court held that the plaintiffs 15 failed to allege a manufacturing defect where “[t]he only allegations relating to 16 manufacturing defects [were] the repetitive statements that the [power module] in 17 each plaintiff's vehicle was ‘defective because of design defects, manufacturing 18 defects, or both.’” 127 F. Supp. 3d at 227. These “offhand references” did not 19 suffice. Id. at 226-27. Similarly, the Troup court rejected “scattered” references to 20 “materials” where the thrust of the complaint suggested a design defect. 545 21 F. App’x at 669; see also Rice, 2013 U.S. Dist. LEXIS 7467, at *38-39 (holding 22 that, despite alleging that the defect arose from “design and/or manufacturing” 23 issues, plaintiff did not allege manufacturing defect). Plaintiffs’ bare allegations of 24 a “manufacturing” or “materials and workmanship” defect are no different here.3 25 26 27 28 3 That discovery has not begun does not excuse Plaintiffs from alleging specific facts. See Clark, 2013 U.S. Dist. LEXIS 155179, at *23 (rejecting argument that plaintiff “is not required to prove whether these problems are design 9 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 19 of 125 Page ID #:243 1 2 Because Plaintiffs do not allege a defect covered by Tesla’s express Basic Vehicle Limited Warranty, they fail to state a claim for breach of that warranty. 3 2. 4 5 Tesla’s Marketing Statements Cannot Support Plaintiffs’ Express Warranty Claims For three of their claims, Plaintiffs argue that alleged marketing statements 6 by Tesla outside the Basic Vehicle Limited Warranty create a separate “express 7 warranty.” (See FAC ¶¶ 19, 51, 55, 57, and 59.)4 They fare no better. A plaintiff 8 claiming that such statements create an express warranty must specifically allege 9 that he or she saw the statements before the purchase. See, e.g., In re Toyota Motor 10 Corp. Unintended Acceleration Mktg., Sales Practices, & Prods. Liab. Litig., 754 11 F. Supp. 2d 1145, 1182 (C.D. Cal. 2010). Plaintiffs have not done so here. 12 In Toyota, this Court dismissed the claim that Toyota breached warranties 13 made in its advertisements because the plaintiffs did not specifically allege that they 14 saw the advertisements. Id. As the Court explained, “Plaintiffs cannot base a claim 15 on [representations in advertisements] in the absence of allegations that they were 16 exposed to them.” Id. (applying California law). Such allegations are necessary to 17 establish that the statements were “part of the basis of the bargain” between the 18 parties. Resnick v. Hyundai Motor Am., Inc., No. 16-00593-BRO (PJWx), 2016 19 U.S. Dist. LEXIS 160179, at *30 (C.D. Cal. Nov. 14, 2016) (citation omitted) 20 (same). 21 The same rule applies to express warranty claims under the laws of Georgia, 22 North Carolina, and Ohio. See Grieco v. Tecumseh Prods. Co., No. 4:12-cv-195, 23 2013 U.S. Dist. LEXIS 152405, at *17 (S.D. Ga. Oct. 23, 2013) (express warranty 24 25 26 27 28 defects or problems with materials and workmanship at this stage in the litigation . . . without access to [defendant’s] discoverable information”). 4 Plaintiffs cite such statements as the basis for the express warranty claims in only the eighth, fifteenth, twenty-fourth causes of action. (See FAC ¶¶ 184, 251, and 317.) 10 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 20 of 125 Page ID #:244 1 only created “under Georgia law when [seller] makes . . . an affirmation [that] 2 becomes part of the basis of the bargain”) (citing Ga. Code Ann. § 11-2-313(1)(a)); 3 Pake v. Byrd, 55 N.C. App. 551, 553 (1982) (“the essential ingredient for this 4 determination” of whether a statement constitutes a warranty “is whether the 5 seller’s affirmation became the basis of the bargain”; court must consider “whether 6 the buyer knew of the seller’s statements” before time of sale); Young v. Carrier 7 Corp., No. 4:14CV0974, 2014 U.S. Dist. LEXIS 163451, at *10 (N.D. Ohio Nov. 8 21, 2014) (report prepared by seller, but not seen by buyer before purchase, could 9 not be part of basis of bargain). 10 Plaintiffs fail to meet this standard here. Out of the five named plaintiffs 11 who bought Tesla vehicles, not a single one alleges that he saw any of the specific 12 representations alleged in the FAC. Thus, Plaintiffs fail to plead facts suggesting 13 that any of the statements were “part of the basis of the bargain.” Resnick, 2016 14 U.S. Dist. LEXIS 160179, at *30 (citation omitted). These “warranty” statements 15 cannot support the express warranty claims. 16 B. 17 The Court Should Dismiss the Ohio Deceptive Trade Practices Act Claim Because the Act Does Not Allow Claims by Consumers (Claim 23) 18 “The vast majority of federal courts and all lower state courts to address the 19 issue have concluded that relief under the [Ohio Deceptive Trade Practices Act] is 20 not available to consumers.” Phillips v. Philip Morris Cos., 290 F.R.D. 476, 482- 21 83 (N.D. Ohio 2013) (collecting cases and granting judgment on the pleadings 22 against consumer plaintiff); see also Holbrook v. La.-Pac. Corp., 533 F. App’x 493, 23 497-98 (6th Cir. 2013) (affirming dismissal of consumer ODTPA claim because 24 plaintiff “[did] not have standing to raise an ODTPA claim as a consumer”); 25 Terlesky v. Fifth Dimension, Inc., No. 1:15-cv-374, 2015 U.S. Dist. LEXIS 155236, 26 at *5-7 (S.D. Ohio Nov. 17, 2015) (granting motion to dismiss against consumer 27 plaintiff); In re Experian Data Breach Litig., No. SACV 15-1592 (AG) (DFMx), 28 2016 WL 7973595, at *8 (C.D. Cal. Dec. 29, 2016) (same); In re Oreck Corp. Halo 11 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 21 of 125 Page ID #:245 1 Vacuum & Air Purifiers Mktg. & Sales Practices Litig., No. ML 12-2317 CAS 2 (JEMx), 2012 WL 6062047, at *11 (C.D. Cal. Dec. 3, 2012) (same); Otto v. Abbott 3 Labs., Inc., No. 5:12-cv-01411-SVW-DTB, 2013 WL 12131380, at *12 (C.D. Cal. 4 Aug. 2, 2013) (same). 5 As many courts have recognized, the ODTPA is “analogous” and 6 “substantially similar” to the Lanham Act. Phillips, 290 F.R.D. at 483; Holbrook, 7 533 F. App’x at 197; Dawson v. Blockbuster, Inc., 2006-Ohio-1240 at ¶ 23, 2006 8 WL 1061769, at *3 (Ct. App. 2006), appeal not allowed, 110 Ohio St. 3d 1442 9 (Ohio 2006). For that reason, courts routinely “look to the Lanham Act when 10 adjudicating claims under the DTPA,” and the Lanham Act does not allow 11 consumer claims. Phillips, 290 F.R.D. at 483-84 (collecting cases); see also 12 Terlesky, 2015 U.S. Dist. LEXIS 155236, at *6.5 13 Plaintiffs cannot deny that Tomko, who bought his Model S vehicle from 14 Tesla (FAC ¶ 39), is a consumer. Indeed, the notion that Plaintiffs are all 15 consumers is a central premise of the FAC, which asserts numerous consumer 16 claims. (See, e.g., FAC ¶ 103 (alleging that Plaintiffs are “consumers” within 17 meaning of California’s Consumer Legal Remedies Act, which means each is an 18 “individual who seeks or acquires, by purchase or lease, any goods or services for 19 personal, family, or household purposes,” Cal. Civ. Code § 1761(d)); see also FAC 20 ¶¶ 113, 133, 163, 185, 300.) Accordingly, Tomko cannot pursue a claim under the 21 ODTPA, and the Court should dismiss the claim with prejudice. 22 C. 23 The Court Should Dismiss or, in the Alternative, Strike the Class Allegations from the Ohio Consumer Sales Practices Act Claim Because Plaintiffs Fail to Plead Notice (Claim 22) 24 The Ohio Consumer Sales Practices Act (“OCSPA”) precludes a class claim 25 26 27 28 5 Many courts also have observed that Ohio’s Consumer Sales Protection Act would be rendered “superfluous” by reading the ODTPA to include consumer suits, because the former regulates the same type of conduct and is clearly directed at consumers. Phillips, 290 F.R.D. at 484 (collecting cases). 12 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 22 of 125 Page ID #:246 1 unless the plaintiff complies with the OCSPA’s statutory notice requirements. To 2 do so, the plaintiff must plead either that “(1) a specific rule or regulation has been 3 promulgated under R.C. 1345.05 that specifically characterizes the challenged 4 practice as unfair or deceptive or (2) an Ohio state court has found the specific 5 practice either unconscionable or deceptive.” Volbers-Klarich v. Middletown 6 Mgmt., Inc., 125 Ohio St. 3d 494, 502 (2010). A failure to plead proper notice 7 requires dismissal. Id. 8 The standard is rigorous. A plaintiff may not rely on a general statute or 9 regulation prohibiting false advertising; “[t]o permit a generic rule to constitute 10 prior notice for purposes of R.C. 1345.09(B) would allow any previous 11 determination of a deceptive act or practice to qualify as prior notice for any 12 subsequent alleged deceptive act or practice.” Marrone v. Philip Morris, USA, Inc., 13 110 Ohio St. 3d 5, 10 (2006); see also In re Oreck Corp., 2012 WL 6062047, at *13 14 (dismissing class claims where notice was based on general Ohio regulation); 15 Corcoran v. CVS Health Corp., 169 F. Supp. 3d 970, 992 (N.D. Cal. 2016) (same). 16 Similarly, an Ohio state court decision can satisfy the notice requirement 17 only if the conduct the court or jury found deceptive is “substantially similar” to the 18 conduct challenged in the present case. Marrone, 110 Ohio St. 3d at 10. The case 19 must be similar “in essential circumstances or conditions,” id.; cases that “involve 20 industries . . . very different from the defendant’s do not provide meaningful notice 21 of specific acts or practices that violate the [O]CSPA,” id. at 9; see also Vinson v. 22 J.M. Smucker Co., No. CV 12-4936-GHK (VBKx), 2013 U.S. Dist. LEXIS 183515, 23 at *18-21 (C.D. Cal. Mar. 25, 2013) (case finding yogurt-maker’s health claims 24 deceptive was not “substantially similar” to purported case challenging health 25 claims regarding products that contained trans fats and high fructose corn syrup; 26 similarities between the cases were too high-level, and the cases differed in “the 27 specific nature and type of health claims at issue.”). 28 Plaintiffs here do not allege that any case provides the requisite statutory 13 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 23 of 125 Page ID #:247 1 notice to Tesla, let alone one that is “substantially similar.” Nor do Plaintiffs allege 2 that any rule or regulation provides such notice. To the extent Plaintiffs claim that 3 the reference to Ohio Revised Code section 1345.02 (see FAC ¶¶ 298, 301), which 4 broadly prohibits deceptive conduct, is enough, this position has been routinely 5 rejected by courts, including Ohio’s Supreme Court.6 See Marrone, 110 Ohio St. 6 3d at 10; Volbers, 125 Ohio St. 3d at 502; In re Oreck Corp., 2012 WL 6062047, at 7 *12-13. Thus, the Court should dismiss or, in the alternative, strike the class 8 allegations under the OCSPA. 9 D. 10 11 The Court Should Dismiss the Georgia Uniform Deceptive Trade Practices Act Claim Because Plaintiff Shastrula Does Not and Cannot Plead a Likelihood of Future Injury (Claim 13) Plaintiff Shastrula’s claim under the Georgia Uniform Deceptive Trade 12 Practices Act, Ga. Code Ann. § 10-1-370 et seq. (“GUDTPA”), fails because the 13 statute permits only injunctive relief claims for future injury. It does not permit 14 claims for damages, nor does it permit injunctive relief claims, like Shastrula’s 15 claims here, that are predicated on the past purchase of an allegedly defective 16 product—even where the plaintiff alleges that the product may or will cause injury 17 in the future. 18 “[T]he sole remedy available under the [G]UDTPA is injunctive relief.” 19 Moore-Davis Motors, Inc. v. Joyner, 252 Ga. App. 617, 619 (2001) (citing Ga. 20 Code Ann. § 10-1-373(a)). An injunction is “only available to remedy future 21 wrongs and does not afford a remedy for what is past.” Terrill v. Electrolux Home 22 Prods., Inc., 753 F. Supp. 2d 1272, 1291 (S.D. Ga. 2010) (citation omitted). If a 23 plaintiff does not meet the requirements for injunctive relief, his claim must be 24 dismissed: “An individual that has only suffered past harm, even when he brings 25 26 27 28 6 Moreover, this section is part of the OCSPA and generally describes what the OCSPA prohibits. If it qualified as notice, the OCSPA’s notice requirement would be meaningless: it would be automatically satisfied whenever a plaintiff sued under the OCSPA. 14 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 24 of 125 Page ID #:248 1 his claim on behalf of a putative class of plaintiffs, fails to state a claim under the 2 GUDTPA.” In re Porsche Cars N. Am., Inc. Plastic Coolant Tubes Prods. Liab. 3 Litig., 880 F. Supp. 2d 801, 846 (S.D. Ohio 2012). 4 Courts routinely dismiss GUDTPA claims arising from the sale of an 5 allegedly defective product, including misrepresentation and omissions allegations 6 like Shastrula’s here, because they do not allege the type of future injury required 7 for injunctive relief under the statute. For example, in Garcia v. Chrysler Group, 8 LLC, 127 F. Supp. 3d 212, 217 (S.D.N.Y. 2015), the plaintiffs alleged that the 9 defendant’s vehicles’ faulty electrical system could cause unintended acceleration 10 and other hazards, and that the defendant had failed to disclose this defect at the 11 time of sale. Id. at 224, 238. The plaintiffs attempted to plead the requisite future 12 injury under GUDTPA by alleging that the defect was “an ongoing presence . . . in 13 their vehicles,” and that their vehicles had diminished in value. Id. at 237-38. The 14 court rejected that attempt, holding that “these harms are due to past conduct, 15 specifically [defendant’s] alleged misrepresentations of the safety and quality of its 16 vehicles and failure to disclose the . . . defect at the time plaintiffs purchase their 17 vehicles.” Id. at 238. The court noted that the plaintiffs did “not allege that 18 [defendant] will engage in any additional future conduct (beyond mere inaction) 19 that will injure them” and dismissed the GUDTPA cause of action. Id.; see also 20 Terrill, 753 F. Supp. 2d at 1291-92 (dismissing GUDTPA claim where plaintiffs 21 were allegedly deceived into buying defective product, because this was past injury 22 that could not support injunctive relief); Catrett v. Landmark Dodge, Inc., 253 Ga. 23 App. 639, 644 (2002) (granting summary judgment for defendant on GUDTPA 24 claim because plaintiff’s injury—allegedly being deceived into buying a car—did 25 not “raise a factual question about the likelihood of some future wrong”). 26 Plaintiff Shastrula’s GUDTPA claim is squarely barred by these authorities. 27 The only injury Shastrula identifies in connection with his GUDTPA claim is that 28 he and the putative Georgia class “overpaid for their Defective Vehicles and did not 15 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 25 of 125 Page ID #:249 1 receive the benefit of their bargain, and their vehicles have suffered a diminution in 2 value.” (FAC ¶ 232.) Those are precisely the allegations held to be insufficient in 3 Garcia. Accordingly, Shastrula’s GUDTPA claim should be dismissed. 4 E. 5 6 The Court Should Dismiss the Georgia Fair Business Practices Act Claim Because Plaintiff Shastrula Does Not and Cannot Allege That He Provided the Requisite Pre-Suit Notice (Claim 14) Under the Georgia Fair Business Practices Act (“GFBPA”), a plaintiff must 7 provide the defendant with 30 days’ pre-suit written notice. Ga. Code Ann. § 10-1- 8 399(b). The notice must include the “demand for relief, identifying the claimant 9 and reasonably describing the unfair or deceptive act or practice relied upon and the 10 injury suffered.” Id. A plaintiff must plead that he has satisfied the GFBPA’s 11 notice requirements, and dismissal with prejudice is mandatory when the 12 requirements are not and cannot be met. See Gibbs v. Abbott Labs., Inc., No. 01-C- 13 1315, 2001 U.S. Dist. LEXIS 20411, at *10 (N.D. Ill. Dec. 4, 2001); Cook v. 14 Citibank, N.A., No. 1:12-CV-03765-RWS-GGB, 2013 U.S. Dist. LEXIS 193519, at 15 *19-20 (N.D. Ga. Mar. 20, 2013) (recommending dismissal of GFBPA claim 16 because complaint did not allege that notice requirements were satisfied), adopted 17 by 2013 U.S. Dist. LEXIS 193517 (N.D. Ga. July 16, 2013). 18 If a plaintiff fails to provide the required pre-suit notice, he cannot cure this 19 by providing post-suit notice and amending the complaint. See Gibbs, 2001 U.S. 20 Dist. LEXIS 20411, at *10 (also noting that plaintiff cannot rely on “constructive 21 notice” as result of other pending litigation); Corcoran, 169 F. Supp. 3d at 993-94 22 (dismissing claim without leave to amend for failure to provide pre-suit notice, and 23 noting that Georgia courts do not accept argument that earlier versions of complaint 24 provide “constructive notice”). Indeed, the GFBPA’s notice requirement leaves so 25 little room for flexibility that the Georgia Court of Appeal has overturned a jury 26 verdict after the plaintiff failed to prove that she complied. See Brown Realty 27 28 16 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 26 of 125 Page ID #:250 1 2 Assocs., Inc. v. Thomas, 193 Ga. App. 847, 851 (1989).7 Plaintiff Shastrula does not allege that he provided any pre-suit notice to 3 Tesla, let alone notice that meets the requirements of the GFBPA. Moreover, 4 Shastrula could not have provided the requisite 30 days’ notice, because his alleged 5 SUA incident occurred on February 27, 2017 (FAC ¶¶ 40, 83)—only two days 6 before Plaintiffs filed the FAC, which was the first complaint to include Shastrula 7 as a plaintiff. Accordingly, the Court should dismiss his GFBPA claim with 8 prejudice. See Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 893 (9th Cir. 9 2010) (court can deny leave to amend if amendment would be futile). 10 F. 11 12 The Court Should Dismiss the Unjust Enrichment Claim Under Georgia Law Because Plaintiff Shastrula Has an Adequate Remedy at Law and Alleges an Enforceable Contract (Claim 18) Unjust enrichment is a claim for equitable relief, and “equitable relief is only 13 available where there is no adequate remedy at law.” Mitsubishi Int’l Corp. v. 14 Cardinal Textile Sales, Inc., 14 F.3d 1507, 1518 (11th Cir. 1994) (applying Georgia 15 law). Under Georgia law, a court must dismiss a claim for unjust enrichment if the 16 complaint contains other viable causes of action arising out of the same underlying 17 conduct, because those other causes of action provide an adequate remedy at law. 18 See Gray v. Abbott Labs., No. 10-cv-6377, 2011 U.S. Dist. LEXIS 80189, at *21-23 19 (N.D. Ill. July 22, 2011) (applying Georgia law and dismissing unjust enrichment 20 claim because other causes of action, such as breach of warranty and negligence, 21 were not dismissed). 22 23 Separately, an unjust enrichment claim also cannot survive a motion to dismiss if the complaint alleges that an enforceable contract exists, and the unjust 24 25 26 27 28 7 The only exception to the notice requirement is if the defendant “does not maintain a place of business or does not keep assets within the state.” Ga. Code Ann. § 10-1-399(b). As the FAC admits, however, Tesla does have a place of business in Georgia because “Plaintiff Shastrula leased a Model X through a Tesla retail store in Marietta, Georgia.” (FAC ¶ 40.) 17 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 27 of 125 Page ID #:251 1 enrichment claim incorporates that allegation. See Goldstein v. Home Depot 2 U.S.A., Inc., 609 F. Supp. 2d 1340, 1347 (N.D. Ga. 2009) (dismissing unjust 3 enrichment claim and noting that, “[u]nder Georgia law, unjust enrichment is only 4 available in the absence of an enforceable contract”). A party may plead unjust 5 enrichment in the alternative to a contract-based claim only “if one or more of the 6 parties contests the existence of an express contract governing the subject matter of 7 the dispute.” Id.; see also Terrill, 753 F. Supp. 2d at 1290-91 (same). 8 Both rules defeat Shastrula’s unjust enrichment claim here. Even if the Court 9 grants this motion in full, Shastrula may have adequate remedies at law because his 10 claim for breach of implied warranty, which arises from the same underlying 11 conduct as his unjust enrichment claim, will remain. This alone warrants dismissal. 12 See Gray, 2011 U.S. Dist. LEXIS 80189, at *22-23. Further, the FAC alleges a 13 contract covering the subject matter of the dispute—the Basic Vehicle Limited 14 Warranty (see, e.g., FAC ¶¶ 142, 166-67); the unjust enrichment claim incorporates 15 the allegations about that contract (see id. ¶ 273); and Tesla does not dispute that 16 this warranty defines its obligations with respect to Shastrula. This is a separate 17 and independent ground requiring dismissal,8 even if Plaintiff’s express warranty 18 claims are dismissed.9 19 V. 20 CONCLUSION For the foregoing reasons, Tesla respectfully asks that the Court dismiss 21 Plaintiffs’ fourth, sixth, seventh, eighth, thirteenth, fourteenth, fifteenth, 22 seventeenth, eighteenth, twentieth, twenty-third, and twenty-fourth causes of action, 23 24 25 26 27 28 8 See Goldstein, 609 F. Supp. 2d at 1347; Terrill, 753 F. Supp. 2d at 1291. What matters is that Shastrula alleges a valid contract, not that he can recover under its terms. See Am. Casual Dining, L.P. v. Moe’s Sw. Grill, LLC, 426 F. Supp. 2d 1356, 1369, 1372 (N.D. Ga. 2006) (dismissing unjust enrichment claim based on existence of contract, and dismissing breach of contract claims on separate grounds). 9 18 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 28 of 125 Page ID #:252 1 and dismiss and/or strike the class allegations from the twenty-second cause of 2 action. 3 March 31, 2017 4 Respectfully submitted, MORRISON & FOERSTER LLP 5 By: /s/ Penelope Preovolos Penelope Preovolos Attorneys for Defendant TESLA, INC. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 29 of 125 Page ID #:253 1 2 CERTIFICATE OF SERVICE The undersigned hereby certifies that on the 31st day of March, 2017, the 3 foregoing document was filed electronically on the CM/ECF system, which caused 4 all CM/ECF participants to be served by electronic means. 5 By: /s/ Penelope Preovolos Penelope Preovolos 6 7 Attorneys for Defendant TESLA MOTORS, INC. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 Case No. 8:16-cv-02282-JVS (KESx) MEMORANDUM IN SUPPORT OF TESLA’S MOTION TO DISMISS AND/OR STRIKE sf-3750199 Case 8:16-cv-02282-JVS-KES Document 26 Filed 03/31/17 Page 30 of 125 Page ID #:254 Attachment 1: Plaintiffs’ First Amended Complaint (Per Court’s Standing Order Requiring Attachment of Challenged Pleading) Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page31 1 of 125 95 Page PageIDID#:130 #:255 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Richard D. McCune, State Bar No. 132124 rdm@mccunewright.com David C. Wright, State Bar No. 177468 dcw@mccunewright.com MCCUNE WRIGHT AREVALO, LLP 3281 E. Guasti Road, Suite 100 Ontario, California 91761 Telephone: (909) 557-1250 Facsimile: (909) 557-1275 BENEDICT O. KWON, State Bar No. 219052 bkwon@sycr.com STEPHEN L. RAM, State Bar No. 240769 sram@sycr.com STRADLING YOCCA CARLSON & RAUTH, P.C. 660 Newport Center Drive, Suite 1600 Newport Beach, CA 92660-6422 Telephone: (949) 725-4000 Facsimile: (949) 725-4100 Attorneys for Plaintiffs JI CHANG SON, GHODRAT KHANSARI, MADHUSUDHANA SHASTRULA, ALI JARRAHI, and MICHAEL TOMKO, individually and on behalf of the Putative Class, and Plaintiff K.M.S., a minor by and through his Guardian ad Litem YUN SOO OH 15 16 UNITED STATES DISTRICT COURT 17 FOR THE CENTRAL DISTRICT OF CALIFORNIA 18 19 20 21 22 JI CHANG SON, GHODRAT KHANSARI, MADHUSUDHANA SHASTRULA, ALI JARRAHI, and MICHAEL TOMKO individually and on behalf of all others similarly situated, and K.M.S., a minor by and through his Guardian ad Litem YUN SOO OH, Plaintiffs, 23 24 v. 25 TESLA, INC., 26 27 28 Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) -1- FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case No.: 8:16-cv-02282-JVS-KES Judge Assigned: Hon. James V. Selna Complaint filed: December 30, 2016 FIRST AMENDED CLASS ACTION COMPLAINT 1. Violation of the California Consumer Legal Remedies Act, Cal. Civ, Code § 1750, et seq. 2. Violation of California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq. 3. Violation of California False Advertising Law, Cal. Bus. & Prof. Code § 17500, et seq. Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page32 2 of 125 95 Page PageIDID#:131 #:256 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) -2- FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES 4. Breach of Express Warranty, Cal. Com. Code § 2313 5. Breach of the Implied Warranty of Merchantability, Cal. Com. Code § 2314 6. Breach of Written Warranty Under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq. 7. Breach of Contract/Common Law Warranty 8. Violation of the Song-Beverly Consumer Warranty Act for Breach of Express Warranties, Cal. Civ. Code § 1793.2(d) & 1791.2 9. Violation of the Song-Beverly Consumer Warranty Act for Breach of Implied Warranty of Merchantability, Cal. Civ. Code § 1792 & 1791.1 10.Strict Product Liability 11.Strict Product Liability (Failure to Warn) 12.Negligence 13.Violation of Georgia’s Uniform Deceptive Trade Practices Act, Ga. Code Ann. § 10-1-370, et seq. 14.Violation of Georgia’s Fair Business Practices Act, Ga. Code Ann. § 10-1390, Et Seq.) 15.Breach of Express Warranty, Ga. Code Ann. § 11-2-313 16.Breach of the Implied Warranty of Merchantability, Ga. Code Ann. § 112-314 17.Breach of Contract/Common Law Warranty (Based on Georgia Law) 18.Unjust Enrichment (Based on Georgia Law) 19.Breach of the Implied Warranty of Merchantability, N.C. Gen. Stat. § 252-314 20.Breach of Contract/Common Law Warranty (Based On North Carolina Law) 21.Unjust Enrichment (Based on North Carolina Law) 22.Violation of Ohio Consumer Sales Practices Act, Ohio Rev. Code Ann. § 1345.01, et seq. 23.Violation of Ohio Deceptive Trade Practices Act, Ohio Rev. Code Ann. § 4165.01, et seq.) 24.Breach of Express Warranty, Ohio Rev. Code Ann. § 1302.26, et seq. (U.C.C. § 2-313) Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page33 3 of 125 95 Page PageIDID#:132 #:257 1 2 3 4 5 6 7 ) ) ) ) ) ) ) ) ) ) ) ) ) ) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES 25.Ohio Breach of Implied Warranty of Merchantability - Strict Liability, Ohio Rev. Code Ann. § 1302.27 (U.C.C. § 2-314) 26.Ohio Negligent Design, Engineering & Manufacture (Based On Ohio Law) 27.Unjust Enrichment (Based On Ohio Law) DEMAND FOR JURY TRIAL Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page34 4 of 125 95 Page PageIDID#:133 #:258 1 TABLE OF CONTENTS 2 3 Page I INTRODUCTION ..................................................................................................... 1 4 A. Tesla Vehicles Are Computers on Wheels...................................................... 1 5 B. The Sudden Unintended Acceleration Problems With the Model X .............. 3 6 C. Cause of the SUA Events in the Model X....................................................... 9 7 II THE PARTIES ........................................................................................................ 11 8 III JURISDICTION AND VENUE .............................................................................. 13 9 IV FACTUAL BACKGROUND.................................................................................. 13 10 A. Tesla’s Development of the Model S and Model X Vehicles ...................... 13 11 B. Tesla Markets the Safety of the Model S and Model X ................................ 15 12 C. Tesla Is on Notice of SUA Complaints Involving Both its Model S 13 and Model X Vehicles ................................................................................... 18 14 1. Model S Reports of Sudden Unintended Acceleration to NHTSA .... 18 15 2. Model X Reports of Sudden Unintended Acceleration to NHTSA.... 31 16 a. 17 Reports of Sudden Unintended Acceleration are 71 Times Higher Than Historical Rates for Other Vehicles .................... 41 18 D. Plaintiff Ji Chang Son’s and Plaintiff Kyung Min Son’s SUA Event .......... 42 19 E. Plaintiff Khansari’s SUA Event .................................................................... 43 20 F. Plaintiff Jarrahi’s Vehicle’s SUA Event ....................................................... 44 21 G. Plaintiff Tomko’s Vehicle’s SUA Incidents ................................................. 45 22 H. Plaintiff Shastrula’s SUA Incident ................................................................ 45 23 I. Defects in the Model S and Model X ............................................................ 47 24 J. Choice of Law Allegations ............................................................................ 48 25 V CLASS ALLEGATIONS ........................................................................................ 48 26 VI CAUSES OF ACTION ............................................................................................ 52 27 28 FIRST CAUSE OF ACTION: VIOLATIONS OF CALIFORNIA’S CONSUMER LEGAL REMEDIES ACT ............................................................................ 52 i FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page35 5 of 125 95 Page PageIDID#:134 #:259 1 TABLE OF CONTENTS (cont.) 2 3 4 5 Page SECOND CAUSE OF ACTION: VIOLATIONS OF THE CALIFORNIA UNFAIR COMPETITION LAW .................................................................. 55 THIRD CAUSE OF ACTION: VIOLATION OF CALIFORNIA FALSE 6 ADVERTISING LAW .................................................................................. 57 7 FOURTH CAUSE OF ACTION: BREACH OF EXPRESS WARRANTY .......... 59 8 FIFTH CAUSE OF ACTION: BREACH OF IMPLIED WARRANTY................ 61 9 SIXTH CAUSE OF ACTION: BREACH OF WRITTEN WARRANTY 10 11 12 13 14 15 UNDER THE MAGNUSON-MOSS WARRANTY ACT ........................... 62 SEVENTH CAUSE OF ACTION: BREACH OF CONTRACT/COMMON LAW WARRANTY ...................................................................................... 64 EIGHTH CAUSE OF ACTION: Violation of the Song-Beverly Consumer Warranty Act for Breach of Express Warranties .......................................... 65 NINTH CAUSE OF ACTION: VIOLATION OF THE SONG-BEVERLY 16 ACT – BREACH OF IMPLIED WARRANTY ........................................... 67 17 TENTH CAUSE OF ACTION: STRICT PRODUCT LIABILITY ....................... 68 18 ELEVENTH CAUSE OF ACTION: NEGLIGENCE ............................................ 70 19 TWELFTH CAUSE OF ACTION: FAILURE TO WARN ................................... 71 20 THIRTEENTH CAUSE OF ACTION: VIOLATION OF GEORGIA’S 21 22 UNIFORM DECEPTIVE TRADE PRACTICES ACT................................ 72 FOURTEENTH CAUSE OF ACTION: VIOLATION OF GEORGIA’S 23 FAIR BUSINESS PRACTICES ACT .......................................................... 73 24 FIFTEENTH CAUSE OF ACTION: BREACH OF EXPRESS WARRANTY .... 74 25 SIXTEENTH CAUSE OF ACTION: BREACH OF THE IMPLIED 26 27 28 WARRANTY OF MERCHANTABILITY .................................................. 77 SEVENTEENTH CAUSE OF ACTION: BREACH OF CONTRACT/COMMON LAW WARRANTY ........................................... 78 ii FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page36 6 of 125 95 Page PageIDID#:135 #:260 1 TABLE OF CONTENTS (cont.) 2 Page 3 EIGHTEENTH CAUSE OF ACTION: UNJUST ENRICHMENT ....................... 79 4 NINETEENTH CAUSE OF ACTION: BREACH OF THE IMPLIED 5 6 WARRANTY OF MERCHANTABILITY .................................................. 79 TWENTIETH CAUSE OF ACTION: BREACH OFCONTRACT/COMMON 7 LAW WARRANTY ...................................................................................... 80 8 TWENTY-FIRST CAUSE OF ACTION: UNJUST ENRICHMENT ................... 81 9 TWENTY-SECOND CAUSE OF ACTION: VIOLATION OF OHIO 10 11 12 13 14 15 16 17 CONSUMER SALES PRACTICES ACT .................................................... 82 TWENTY-THIRD CAUSE OF ACTION: VIOLATION OF OHIO DECEPTIVE TRADE PRACTICES ACT ................................................... 83 TWENTY-FOURTH CAUSE OF ACTION: BREACH OF EXPRESS WARRANTY ................................................................................................ 84 TWENTY-FIFTH CAUSE OF ACTION: OHIO BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY - STRICT LIABILITY ............ 85 TWENTY-SIXTH CAUSE OF ACTION: OHIO NEGLIGENT DESIGN, 18 ENGINEERING & MANUFACTURE ........................................................ 86 19 TWENTY-SEVENTH CAUSE OF ACTION: UNJUST ENRICHMENT ............ 87 20 PRAYER FOR RELIEF .................................................................................................... 88 21 JURY DEMAND ............................................................................................................... 89 22 23 24 25 26 27 28 iii FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page37 7 of 125 95 Page PageIDID#:136 #:261 1 Plaintiffs Ji Chang Son, Ghodrat Khansari, Madhusudhana Shastrula, Ali Jarrahi, 2 and Michael Tomko, individually and on behalf of all others similarly situated, and 3 K.M.S., a minor by and through his Guardian ad Litem Yun Soo Oh, herein allege as 4 follows: 5 I 6 INTRODUCTION 7 A. 8 9 Tesla Vehicles Are Computers on Wheels 1. In 2008, Tesla Motors, Inc., (“Tesla”) first entered the vehicle market with the production of the Tesla Roadster, an all-electric sports car. In 2012, it began selling 10 the Model S, an all-electric luxury sedan. Following a series of delays, Tesla began 11 selling the Model X,1 an all-electric luxury crossover sports utility vehicle (“SUV”) in the 12 fourth quarter of 2015. 13 2. Tesla is led by technology pioneer and visionary entrepreneur Elon Musk, 14 who has parlayed his successes in Zip2 and PayPal, to transform the automobile industry 15 with Tesla, and the private space industry with SpaceX. 16 3. Elon Musk’s strategy with Tesla was to enter the automotive market with a 17 highly technical high-end and expensive vehicle that would appeal to environmentally 18 conscious consumers who value cutting-edge technology, luxury, high-performance, and 19 safety. 20 4. The Tesla vehicles are like no other vehicles that have ever been mass 21 produced. As reported by the Los Angeles Times on March 19, 2015, Elon Musk said in 22 connection with releasing software updates on the Model S, “We really designed the 23 Model S to be a very sophisticated computer on wheels.” That is just as true with the 24 Model X as the Model S. Elon Musk went to on to say: “Tesla is a software company as 25 26 27 28 Following the delivery of the 6 Founders’ Series vehicles at the launching ceremony for the Model X, Tesla only sold approximately 206 Model X vehicles in the fourth quarter of 2015. Sales really began in the first quarter of 2016. 1 1 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page38 8 of 125 95 Page PageIDID#:137 #:262 1 much as it is a hardware company. A huge part of what Tesla is, is a Silicon Valley 2 software company.” 3 5. Part of the excitement that Elon Musk and Tesla have created in the 4 automotive market segment is being a market and technology leader in the self-driving 5 technology. This technology allows the vehicle to operate on its own, and to make 6 drivers’ decisions for them. Engineers are responsible to anticipate all of the different 7 foreseeable scenarios vehicles are expected to encounter, and to program the computer 8 systems in the vehicle to anticipate and make decisions to safely operate the vehicle. Part 9 of the excitement around this technology is the potential for preventing driver errors in 10 11 judgment under times of high stress. 6. As reported by Electrek in December 2015, Elon Musk announced that the 12 technology is so advanced that the Tesla has the ability to not only track the vehicle in 13 front of it, but also the two vehicles in front of it. It has the ability to see through rain, 14 fog, snow, and dust to see and react to objects. Elon Musk went on to proclaim that 15 within two years Tesla would have a fully autonomous vehicle that could operate in any 16 condition and on any road. In October 2016, Elon Musk stated that from now on, all new 17 Tesla cars will have full self-driving capabilities. 18 7. The highly-touted ability of the Tesla vehicle computers to understand their 19 environment is futuristic. The vehicle is programmed to remember where home is, to 20 remember the preferred routes of going home, to open the garage door at home, and to 21 raise the suspension when the driver gets home to better handle the slope of the driveway. 22 Astoundingly, the driver can exit the vehicle and the Tesla will open the garage door, 23 enter the garage, park itself, and shut down without a driver operating the vehicle. It also 24 can be summoned by a driver with a cell phone – the vehicle, without a driver, will open 25 the garage door, exit the garage, and drive itself to the driver who summoned the car. 26 8. As is true for all computers, however, Tesla vehicles are only as good as the 27 hardware, engineering, and programming of their onboard computers. As even casual 28 computer users know, even the most sophisticated and successful computer companies in 2 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page39 9 of 125 95 Page PageIDID#:138 #:263 1 history, such as Microsoft and Apple, regularly release computers and software with 2 bugs, glitches, and unanticipated problems that cause their computers to unexpectedly 3 crash, malfunction, or work differently than intended. These bugs have serious 4 consequences for users of traditional computer products. But for a computer that controls 5 a 5,000 pound machine that can explosively accelerate from a standstill to 60 miles per 6 hour in under 3 seconds, the consequences of a computer glitch can be catastrophic. For 7 that reason, there has to be zero-tolerance for any glitch, bug, or malfunction - a goal no 8 computer company has ever been able to achieve. 9 9. Tesla is no exception. In a high-profile fatality accident in Florida where the 10 vehicle’s computer system failed to recognize the presence of a fixed object, Tesla’s 11 response, as reported by the New York Times, was to issue a statement stating that the 12 use of this technology “requires explicit acknowledgement that the system is new 13 technology.” 14 10. Part of the solution is that Tesla computers learn in order to carry out the 15 driver’s instructions, and to protect the driver while doing so. As stated by Elon Musk, as 16 reported in Wired on September 11, 2016, “We’re adding 1.5 million miles per day on 17 Autopilot,” and all vehicles learn at once. So just as with traditional computers, patches 18 and software updates can be downloaded remotely to remedy glitches, bugs, and 19 problems that were not anticipated by the programming engineers. 20 B. 21 The Sudden Unintended Acceleration Problems with Tesla Vehicles 11. Tesla first introduced its Model S sedan in 2012. According to Tesla, the 22 “Model S is designed from the ground up to be the safest, most exhilarating sedan on the 23 road. The Model S can accelerate from 0 to 60 miles per hour in as little as 2.5 seconds.” 24 12. Beginning in September 2014, all Tesla Model S vehicles were 25 manufactured with a camera mounted at the top of the windshield, forward looking radar, 26 and ultrasonic acoustic location sensors that provide the vehicle’s computer with a 360- 27 degree view around the car. This equipment allowed the Model S to detect road signs, 28 lane markings, obstacles, and other vehicles. Beginning in October 2016, Tesla upgraded 3 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page40 10of of125 95 Page PageID ID#:139 #:264 1 this hardware in all new Model S vehicles to include 8 surround cameras and 12 2 ultrasonic sensors. 3 13. Model S vehicles operate with an electronic acceleration control system by 4 which complex computer and sensor systems communicate an accelerator pedal’s 5 position to the vehicle’s onboard computers, telling the vehicle how fast it should go. 6 7 8 9 10 14. From the introduction of the Model S in 2012 through June 2016, Tesla has sold approximately 75,000 Model S vehicles in the United States. 15. The launch of the Model X was one of the most anticipated vehicle launches of all times. A futuristic looking electric luxury high-performance crossover SUV, it had originally been slated for release in 2014. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 16. But it was not until the very end of 2015, that it was actually released. The 26 delay was as a result of technological and mechanical challenges. Following the release, 27 problems arose almost immediately. A lawsuit was filed, and later settled, that 28 highlighted the electronic nature of the problems, including the electronically activated 4 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page41 11of of125 95 Page PageID ID#:140 #:265 1 doors that opened and closed unpredictably, the electronic self-parking feature that failed 2 to work, and other reported electronic problems with the vehicle, such as the 3 electronically activated windows failing to open or close. As reported by ABC News on 4 April 5, 2016, Tesla’s explanation for the electronic problems experienced by the Tesla X 5 was “hubris in adding too much new technology to the Model X in version 1.” 6 17. Since the introduction of the Model X in the fourth quarter of 2015 through 7 the end of 2016, Defendant Tesla, Inc., has sold approximately 18,240 Model X vehicles 8 throughout the United States. Model X vehicles operate with an electronic acceleration 9 control system by which complex computer and sensor systems communicate an 10 accelerator pedal’s position to the vehicle’s onboard computers, telling the vehicle how 11 fast it should go. 12 18. Able to accelerate from zero to sixty miles per hour in 2.9 to 3.8 seconds 13 (depending on battery pack) and equipped with advanced safety features including 14 Forward Collision Warning and Advanced Early Braking, Tesla proclaims that the Model 15 X is “the safest, fastest and most capable sport utility vehicle in history.” 16 19. In press releases, sales literature, brochures, online statements, and other 17 consumer-oriented documents, Tesla has consistently promoted “safety” as top priority in 18 all its vehicles, generally, and in the Model X, specifically. 19 20. What has become evident, however, is that Tesla vehicles are susceptible to 20 sudden unintended acceleration (“SUA”), in which the vehicles will accelerate at full 21 power even though the driver reports that they did not command the acceleration by 22 pressing on the accelerator pedal, either at all or not to the degree that would call for the 23 application of full power. 24 21. In the four years since the introduction of the Model S, there have been 13 25 reports to the National Highway Traffic Safety Administration in which Model S drivers 26 report having experienced full power acceleration either while in the act of parking the 27 Model S or while driving at slow speed, 12 of which resulted in a crash of the vehicle, 28 just as both Plaintiff Khansari and Plaintiff Tomko’s spouse experienced. 5 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page42 12of of125 95 Page PageID ID#:141 #:266 1 22. In the first full year of production since the Model X was first introduced, 2 Tesla has received, or is otherwise aware of, thirteen nearly identical instances in which 3 drivers of the Model X experienced full power acceleration either while in the act of 4 parking the Model X or while driving the Model X at slow speed, ten of which resulted in 5 a crash of the vehicle, precisely like Plaintiff Son herein experienced as shown below, 6 crashing through the wall that separated his garage from his living room. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page43 13of of125 95 Page PageID ID#:142 #:267 1 2 3 4 5 6 7 8 9 10 11 12 13 23. Ten of these are known to have been submitted to the National Highway 14 Traffic Safety Administration’s (“NHTSA”) publicly available complaints database that, 15 based on information and belief, is monitored by Tesla. As illustrated by one of those 16 instances, this picture shows a pattern similar to Plaintiffs’ incidents. 17 18 19 20 21 22 23 24 25 26 27 28 7 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page44 14of of125 95 Page PageID ID#:143 #:268 1 24. In addition to the ten reports to NHTSA, there are at least three additional 2 SUA events, including Plaintiff Son’s, Plaintiff Jarrahi’s, and another experienced by a 3 driver of a Model X that did not result in an accident. That other SUA event, which 4 mirrored the SUA incident experienced by Plaintiff Son – but did not result in a collision 5 – was reported to Tesla, but Tesla took no action. Based on that fact, there are likely 6 other Model X SUA events that Tesla is aware of but not recorded in the NHTSA 7 database. 8 25. 9 Sudden Unintended Acceleration (“SUA”) is a well-known safety issue. Though relatively rare, the danger of a vehicle accelerating uncontrollably is obvious. 10 According to a study by NASA of unintended acceleration reports to the National 11 Highway Traffic Administration from 2000 to 2010, there rate of SUA incidents was 1 12 per 100,000 vehicles per year. 13 26. In 2010, the issue became very public when Toyota Motor Company was 14 sued by hundreds of injured parties for claimed SUA events in their vehicles. Toyota 15 Motor Company paid hundreds of millions of dollars in settlement to victims and owners 16 for the claim that there was an electrical defect in the Toyota vehicles that caused SUA 17 events. It also paid the United States government $1.2 billion for concealing this safety 18 defect. According to a December 2009 Consumer Reports2 analysis of SUA event ratio 19 for Toyota’s 2008 model year vehicles, their reported events were 2 per 100,000 vehicles 20 (1 per 50,000 vehicles), or double the average reported by NHTSA. 21 27. By comparison, within the first year of Model X vehicles being on the road, 22 and with only 18,240 Model X vehicles in use (the vast majority of which have been on 23 the road significantly less than one year), there have been thirteen (13) reported incidents 24 of sudden unintended acceleration -- a staggeringly high rate of SUA incidents of 71 per 25 100,000 vehicles per year. 26 27 28 2 http://www.consumerreports.org/cro/news/2009/12/analysis-shows-over-40-percent-ofsudden-acceleration-complaints-involve-toyotas/index.htm (last viewed on December 29, 2016). 8 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page45 15of of125 95 Page PageID ID#:144 #:269 1 2 3 4 5 6 7 8 1 2 9 10 11 12 13 14 C. Cause of the SUA Events 28. There are different causes of SUA events. They can be caused by a problem 15 with the vehicle, by a driver error in pedal misapplication, or a combination of a problem 16 with the vehicle causing pedal misapplication. For the Model S, of the 14 SUA events 17 reported to NHTSA (one of the 13 reports actually reported two independent SUA 18 events), nine of SUA events occurred while the driver was in the process of parking the 19 vehicle, and all but one of 14 events resulted in a collision. For the Model X, remarkably 20 all ten of the reported SUA events occurred while the driver was in the process of parking 21 the Model X, all but one of which resulted in a collision. The reported Tesla SUA 22 incidents are eerily similar to the circumstances of the SUA events experienced by 23 Plaintiffs. 24 29. Irrespective of whether the SUA events in the Tesla vehicles are caused by 25 mechanical issues with the accelerator pedal, an unknown failure in the electronic motor 26 control system, a failure in other aspects of the electrical, mechanical, or computer 27 systems, or some instances of pedal misapplication, the Model S and Model X are 28 defective and unsafe. 9 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page46 16of of125 95 Page PageID ID#:145 #:270 1 30. Despite its knowledge of the problem, Tesla has failed to properly disclose, 2 explain, fix, or program safeguards to correct the underlying problem of unintended 3 acceleration. This leaves tens of thousands of Tesla owners with vehicles that could 4 potentially accelerate out of control. 5 31. Tesla’s lack of response to this phenomenon is even more confounding when 6 the vehicle is already equipped with the hardware necessary for the vehicle’s computer to 7 be able to intercede to prevent unintended acceleration into fixed objects such as walls, 8 fences, and buildings. 9 32. As set forth in more detail below, Tesla equips all its Model X vehicles, and 10 has equipped its Model S vehicles since March 2015, with Automatic Emergency 11 Braking whereby the vehicle computer will use the forward looking camera and the radar 12 sensor to determine the distance from objects in front of the vehicle. When a frontal 13 collision is considered unavoidable, Automatic Emergency Braking is designed to 14 automatically apply the brakes to reduce the severity of the impact. But Tesla has 15 programmed the system to deactivate when it receives instructions from the accelerator 16 pedal to drive full speed into a fixed object. Tesla confirmed that when it stated that 17 Automatic Emergency Braking will operates only when driving between 5 mph (8 km/h) 18 and 85 mph (140 km/h) but that the vehicle will not automatically apply the brakes, or 19 will stop applying the brakes, “in situations where you are taking action to avoid a 20 potential collision. For example: 21 • You turn the steering wheel sharply. 22 • You press the accelerator pedal. 23 • You press and release the brake pedal. 24 • A vehicle, motorcycle, bicycle, or pedestrian, is no longer detected ahead.” 25 33. Apparently, this includes situations where the computer believes, rightly or 26 wrongly, that the driver is commanding full throttle acceleration directly into fixed 27 objects immediately in front of the vehicle. Tesla has designed and manufactured a 28 vehicle that is capable of accelerating from zero to 60 miles per hour in 2.9 seconds – 10 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page47 17of of125 95 Page PageID ID#:146 #:271 1 acceleration that was previously achievable only in a select number of exotic sports cars – 2 and equipped the vehicle with the ability to sense objects in its path and brake 3 automatically to prevent or minimize frontal impacts, but Tesla has programmed these 4 systems to allow the Model S and Model X to engage full throttle acceleration into fixed 5 objects, such as walls, fences, and beams, that are in the direct path and immediate 6 proximity of the vehicle. 7 34. Despite repeated instances of Tesla drivers reporting uncommanded full 8 power acceleration while parking, Tesla has failed to develop and implement computer 9 algorithms that would eliminate the danger of full power acceleration into fixed objects. 10 This failure to provide a programming fix is especially confounding for a vehicle that 11 knows when it is located at the driver’s home and is being parked in the garage, yet 12 carries out an instruction, regardless of whether through an error by the vehicle control 13 systems or by driver pedal misapplication, to accelerate at full power into the garage wall. 14 35. Further, not only has Tesla failed to fix the problems, it has chosen instead 15 to follow in the footsteps of other automobile manufacturers and simply blame the driver. 16 As Toyota Motor Company learned not long ago, blaming the driver for inexplicable and 17 preventable instances of full throttle acceleration is no longer acceptable. That is 18 especially true for a disruption company that seeks to use technology to make smart and 19 safe vehicles. 20 II 21 THE PARTIES 22 36. Plaintiff Ji Chang Son and his son, Plaintiff K.M.S., are citizens of the 23 Republic of South Korea, who at all times relevant herein were residing in Orange 24 County, California. On or about August 5, 2016, Plaintiff Ji Chang Son and his wife, 25 Yun Soo Oh, purchased a 2016 Model X from the Tesla Gallery located in Costa Mesa, 26 California. Plaintiff Ji Chang Son was the driver of the Model X when the vehicle 27 experienced uncommanded full power acceleration while he was pulling into the garage 28 of his home in Orange County, California, on September 10, 2016, causing the vehicle to 11 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page48 18of of125 95 Page PageID ID#:147 #:272 1 crash through the interior wall of the garage of his home and come to rest in Plaintiff’s 2 living room, injuring Plaintiff Ji Chang Son and his son, Plaintiff K.M.S., who was a 3 front seat passenger in the vehicle. 4 37. Plaintiff Ghodrat Khansari is a resident of Dana Point, California. In our 5 about December, 2015, Plaintiff Khansari purchased a 2015 Model S from a Tesla retail 6 store in Costa Mesa, California. Plaintiff Khansari was the driver of the Model S when 7 the vehicle experienced uncommanded full power acceleration while pulling into a 8 parking spot at a gas station on January 26, 2016, in Orange County, California, causing 9 the vehicle to crash into a fixed steel post. 10 38. Plaintiff Ali Jarrahi is a resident of Winston-Salem, North Carolina. On or 11 about October 22, 2016, Plaintiff Jarrahi purchased a 2016 Model X through a Tesla 12 retail store in Raleigh, North Carolina. On December 5, 2016, Plaintiff Jarrahi’s wife 13 was the driver of the Model X when the vehicle experienced uncommanded full power 14 acceleration after she had come to a stop while waiting to make a right turn. As a result 15 of the full power acceleration, she could not negotiate the right hand turn and collided 16 with a vehicle that was also stopped in the left hand turn lane of the road onto which she 17 was attempting to turn. 18 39. Plaintiff Michael Tomko is a resident of Columbus, Ohio. On or about July 19 28, 2016, Plaintiff Tomko purchased a 2016 Model S from a Tesla retail store in 20 Columbus, Ohio. On October 15, 2016, Plaintiff Tomko’s spouse was driving the Model 21 S slowly in a parking lot and was preparing to stop when the vehicle experienced 22 uncommanded acceleration, causing the vehicle to surge forward, out of the parking lot 23 and into a wooded area. On January 20, 2017, Plaintiff Tomko’s spouse was again 24 driving the Model S in a parking lot and preparing to park when it again experienced 25 uncommanded acceleration and surged forward, jumping a parking block and traveling 26 50 feet before she was able to bring the vehicle to a stop. 27 28 40. Plaintiff Madhusudhana Shastrula is a resident of Marietta, Georgia. On or about December 29, 2016, Plaintiff Shastrula leased a Model X through a Tesla retail 12 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page49 19of of125 95 Page PageID ID#:148 #:273 1 store in Marietta, Georgia. On February 27, 2017, Plaintiff Shastrula was driving his 2 Model X in a parking structure at his office. Plaintiff Shastrula slowed the vehicle and 3 was making a left turn into a parking stall when his Model X experienced uncommanded 4 full power acceleration and collided with a concrete wall. 5 6 41. Defendant Tesla, Inc., is a Delaware corporation with its headquarters located at 3500 Deer Creek Road, Palo Alto, California 94304. 7 III 8 JURISDICTION AND VENUE 9 42. This Court has subject matter jurisdiction pursuant to the Class Action 10 Fairness Act, 28 U.S.C. § 1332(d). The aggregated claims of the individual class 11 members exceed the sum or value of $5,000,000, exclusive of interest and costs; there are 12 more than 100 putative class members defined below; and there are numerous members 13 of the proposed class who are citizens of a state different from Tesla. 14 43. This Court has personal jurisdiction over Defendant Tesla because its 15 corporate headquarters and primary manufacturing facility are located in California, it 16 conducts substantial business in the District, and because a substantial part of the acts and 17 omissions complained of occurred in the District. 18 44. Venue is proper in the Central District of California pursuant to 28 U.S.C. 19 § 1391(a) and (b) because a substantial part of the events, acts and omissions giving rise 20 to these claims occurred in the Central District of California. 21 IV 22 FACTUAL BACKGROUND 23 24 A. Tesla’s Development of the Model S and Model X Vehicles 45. Defendant Tesla Motors, Inc. (“Tesla”) designs, develops, manufactures, and 25 sells electric vehicles and electric vehicle powertrain components. The company also 26 provides services for the development and sale of electric powertrain systems and 27 components, to other automotive manufacturers. It markets and sells its vehicles through 28 Tesla stores, as well as via the Internet. As of October 2016, the company operated a 13 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page50 20of of125 95 Page PageID ID#:149 #:274 1 network of 99 Tesla Stores and Galleries in the United States, of which 28 are located 2 within California. Tesla was founded in July 2003 and is headquartered in Palo Alto, 3 California. Tesla claims to use proprietary technology and state-of-the-art manufacturing 4 processes to create one of the safest vehicles on the road today. 5 46. Tesla announced the development of the Model S four-door all electric 6 sedan on June 30, 2008. And on March 26, 2009, Tesla revealed the Model S prototype 7 to the public for the first time. The first Model S were delivered to buyers in June 2012. 8 Only approximately 2,620 vehicles were delivered in the United States 2012. In 2013, 9 however, that number would jump to approximately 18,650. 10 47. Tesla has also continued to increase the power and performance of the 11 Model S. In its Fourth Quarter & Full Year 2016 Update, Tesla announced that the 12 Model S P100D had posted a record setting 0 to 60 miles per hour in 2.275 seconds – the 13 fastest vehicle acceleration ever recorded by Motor Trend, “including million dollar, two- 14 seat, gasoline-powered super cars with almost no cargo space.” 15 48. On February 9, 2012, Tesla announced the development of a full-sized, all 16 electric, luxury crossover SUV called the Model X. At that time, Tesla announced that 17 “Tesla Model X Performance version will accelerate from 0 to 60 miles per hour in 4.4. 18 seconds [making the] Model X faster than many sports cars, including the Porsche 911 19 Carrera.” 20 49. By the time Tesla began deliveries of the Model X to North American 21 consumers, it had increased the power and performance of the Model X beyond Tesla’s 22 own projections. At the time of its introduction, Tesla offered the Model X in two 23 performance packages: 1) P90D that can accelerate from 0 to 60 m.p.h. in 3.8 seconds; 24 and 2) the Ludicrous P90D that can accelerate from 0 to 60 m.p.h. in 3.2 seconds. The 25 Model X has a top speed of 155 m.p.h. 26 27 50. Tesla now offers the Model with a 100 kWh battery that can accelerate the Model X “from zero to 60 miles per hour in as quick as 2.9 seconds.” 28 14 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page51 21of of125 95 Page PageID ID#:150 #:275 1 B. 2 3 Tesla Markets the Safety of the Model S and Model X 51. Tesla markets its Model S sedan as being “designed from the ground up to be the safest car on the road.” 4 52. Beginning in September 2014, all Tesla Model S vehicles were 5 manufactured with a camera mounted at the top of the windshield, forward looking radar, 6 and ultrasonic acoustic location sensors that provide the vehicle’s computer with a 360- 7 degree view around the car. This equipment allowed the Model S to detect road signs, 8 lane markings, obstacles, and other vehicles. 9 53. In March 2015, Tesla implemented Automatic Emergency Braking as parts 10 of its version 6.2 software update for the Model S. As described in more detail below, 11 the Automated Emergency Braking was a feature marketed by Tesla as a new “Collision 12 Avoidance Assist” feature that automatically engages the brakes to reduce the impact of 13 an unavoidable frontal collision. 14 15 54. Beginning in October 2016, Tesla upgraded this hardware in all new Model S vehicles to include 8 surround cameras and 12 ultrasonic sensors. 16 55. Equal with its staggering performance, Tesla marketed the Model X as being 17 “designed to be the safest car on the road,” with every Model X coming “standard with 18 automatic emergency braking and side collision avoidance to prevent accidents from 19 happening in the first place.” 20 56. Every Model X is equipped with “a forward-looking camera, radar, and 360 21 degree sonar sensors to enable advanced autopilot features.” 22 // 23 // 24 // 25 // 26 // 27 // 28 // 15 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page52 22of of125 95 Page PageID ID#:151 #:276 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page53 23of of125 95 Page PageID ID#:152 #:277 1 57. Tesla also promoted its “over-the-air software updates” allowing Tesla to 2 “regularly improve the sophistication of these features, enabling increasingly capable 3 safety and convenience features.” 4 58. Tesla equips the Model X with a pair of safety features called “Forward 5 Collision Warning” and “Automatic Emergency Braking.” As described in the Model X 6 Owner’s Manual: 7 [T]he following collision avoidance features are designed to increase the safety of you and your passengers: 8 • Forward Collision Warning provides visual and audible warnings in situations where there is a high risk of a frontal collision . . . . • Automatic Emergency Braking automatically applies braking to reduce the impact of a frontal collision . . . . 9 10 11 The forward looking camera and the radar sensor are designed to determine the distance from any object (vehicle, motorcycle, bicycle, or pedestrian) traveling in front of Model X. When a frontal collision is considered unavoidable, Automatic Emergency Braking is designed to automatically apply the brakes to reduce the severity of the impact. 12 13 14 15 When Automatic Emergency Braking applies the brakes, the instrument panel displays a visual warning and you'll hear a chime. You may also notice abrupt downward movement of the brake pedal. The brake lights turn on to alert other road users that you are slowing down. 16 17 18 ... 19 Automatic Emergency Braking operates only when driving between 5 mph (8 km/h) and 85 mph (140 km/h). 20 Automatic Emergency Braking does not apply the brakes, or stops applying the brakes, in situations where you are taking action to avoid a potential collision. For example: 21 22 • You turn the steering wheel sharply. • You press the accelerator pedal. • You press and release the brake pedal. • A vehicle, motorcycle, bicycle, or pedestrian, is no longer detected ahead. 23 24 25 26 27 59. With these and other features, Tesla touts the Model X as being “the safest, fastest and most capable sport utility vehicle in history.” 28 17 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page54 24of of125 95 Page PageID ID#:153 #:278 1 C. Tesla Is on Notice of SUA Complaints Involving Both its Model S and Model 2 X Vehicles 3 60. NHTSA maintains an online complaint database where consumers can file 4 complaints regarding issues they are experiencing with their vehicle. Complaints can be 5 entered into the system via the internet, through a toll-free Safety Auto Hotline, by 6 submitting a written vehicle owner questionnaire (“VOQ”) or by mailing a letter. The 7 NHTSA consumer complaints database is considered one of NHTSA’s most important 8 sources of field data and is monitored by all major automobile manufacturers, including 9 Tesla, for the purpose of ascertaining field data about the performance of their vehicles. 10 1. 11 In September 2013, the first two complaints of sudden unintended acceleration in Model S Reports of Sudden Unintended Acceleration to NHTSA 12 the Model S were reported to NHTSA. These were the first of what would become 13 13 separate reports detailing 14 SUA incidents, in the next 41 months. 14 15 61. The following information was entered into the NHTSA complaint database, and therefore, was available to Tesla, in connection with these seven complaints: 16 17 September 24, 2013 NHTSA ID NUMBER: 10545230 18 Components: VEHICLE SPEED CONTROL 19 NHTSA ID Number: 10545230 20 Incident Date September 21, 2013 21 Consumer Location SAN DIEGO, CA 22 Vehicle Identification Number 5YJSA1CN9DF**** 23 Summary of Complaint 24 CRASH Yes 25 FIRE No 26 INJURIES 0 27 DEATHS 0 28 THE CAR WAS GOING AT ABOUT 5 MPH GOING DOWN A SHORT RESIDENTIAL DRIVEWAY. BRAKE WAS CONSTANTLY APPLIED. THE CAR SUDDENLY 18 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page55 25of of125 95 Page PageID ID#:154 #:279 1 2 3 4 5 6 7 8 9 ACCELERATED. IT HIT A CURB AND THE MIDDLE PORTION OF THE CAR LANDED ON A 4.5 FT HIGH VERTICAL RETAINING WALL. THE WALL IS ONE FOOT AWAY FROM THE CURB. THE FRONT PORTION OF THE CAR WAS HANGING UP IN THE AIR. THE CAR WAS AT ABOUT 45 DEGREE UP AND ABOUT 20 DEGREE TILTED TOWARD THE RIGHT SIDE. AN ENGINEER FROM TESLA SAID THE RECORD SHOWED THE ACCELERATING PEDAL WAS STEPPED ON AND IT ACCELERATED FROM 18% TO 100% IN SPLIT SECOND. HE BLAMED MY WIFE STEPPING ON THE ACCELERATING PEDAL. BUT HE ALSO SAID THERE WAS A BUILT-IN SAFE-GUARD THAT THE ACCELERATOR COULDNOT GO BEYOND 92%. THE STATEMENTS ARE CONTRADICTORY. IF THERE IS A SAFEGUARD THAT THE ACCELERATOR CANNOT GO BEYOUND 92%, THERE WOULD BE NO WAY THAT MY WIFE COULD STEP ON IT 100%. THERE WERE SOME MECHANICAL PROBLEM THAT CAUSED THE ACCELERATOR TO ACCELERATE ON ITS OWN FROM 18% TO 100% IN SPLIT SECOND. *LN UPDATED 12/30/2013 *JS 1 Associated Product Vehicle 10 11 MAKE MODEL YEAR TESLA MODEL S 2013 12 13 14 15 16 September 26, 2013 NHTSA ID NUMBER: 10545488 17 Components: VEHICLE SPEED CONTROL 18 NHTSA ID Number: 10545488 19 Incident Date July 29, 2013 20 Consumer Location LAGUNA HILLS, CA 21 Vehicle Identification Number 5YJSA1CN1DF**** 22 Summary of Complaint 23 CRASH Yes 24 FIRE No 25 INJURIES 0 26 DEATHS 0 27 I WAS AT A FULL STOP WAITING TO TURN LEFT INTO THE PARKING GARAGE. WHEN IT WAS CLEAR OF ONCOMING TRAFFIC FOR ME TO MAKE THE LEFT TURN, I RELEASED MY FOOT OFF THE BRAKE PEDAL AND THE CAR INSTANTLY SURGED FORWARD VERY FAST AND HIT ANOTHER VEHICLE PARKED IN THE FRONT OF THE 28 19 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page56 26of of125 95 Page Page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ssociated Product 10 11 12 Vehicle MAKE MODEL YEAR TESLA MODEL S 2013 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 September 29, 2014 NHTSA ID NUMBER: 10639849 Components: VEHICLE SPEED CONTROL NHTSA ID Number: 10639849 Incident Date July 19, 2014 Consumer Location BAKERSFIELD, CA Vehicle Identification Number 5YJSA1H13EF**** Summary of Complaint CRASH Yes FIRE No INJURIES 0 DEATHS 0 TL* THE CONTACT OWNS A 2014 TESLA MODEL S. WHILE PULLING INTO A PARKING SPACE, THE VEHICLE SURGED FORWARD, JUMPED THE CURB, AND CRASHED INTO A BUILDING. A POLICE REPORT WAS FILED. THERE WERE NO INJURIES. THE 20 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page57 27of of125 95 Page PageID ID#:156 #:281 1 2 3 VEHICLE WAS TOWED TO AN IMPOUND LOT. THE MANUFACTURER WAS NOTIFIED OF THE FAILURE. THE APPROXIMATE FAILURE MILEAGE WAS 1,200. 1 Associated Product Vehicle 4 5 MAKE MODEL YEAR TESLA MODEL S 2014 6 7 8 9 10 September 29, 2014 NHTSA ID NUMBER: 10639935 11 Components: VEHICLE SPEED CONTROL 12 NHTSA ID Number: 10639935 13 Incident Date July 19, 2014 14 Consumer Location BAKERSFIELD, CA 15 Vehicle Identification Number 5YJSA1H13EF**** 16 Summary of Complaint 17 CRASH Yes 18 FIRE No 19 INJURIES 1 20 DEATHS 0 21 I PULLED SLOWLY IN TO A PARKING SPOT & MY CAR WAS AT A STOP POSITION JUST READY TO PUSH PARK BUTTON. WITHIN A SPLIT OF A SECOND, MY CAR (TESLA) JUMPED THE CURB AND TRAVELED 5' OF SIDEWALK BREAKING A GLASS WALL & TRAVELING THROUGH A RESTAURANT BREAKING TABLES & CHAIRS WITHIN COUPLE OF SECONDS W/O ME ACCELERATING THE PEDAL. BRAKE PEDAL WAS APPLIED BY ME HALF WAY THROUGH THE RESTAURANT BEFORE THE CAR STOPPED. NO SERIOUS INJURIES TO ANYONE. TESLA WAS NOTIFIED & THIS IS THE LOG FILE DATA WORD BY WORD FROM THEM. ?AT THE TIME OF THE INCIDENT THAT RESULTED IN DAMAGE TO YOUR VEHICLE, YOU INCREASED THE ACCELERATOR PEDAL POSITION FROM 1% TO 50% IN LESS THAN ONE SECOND WITHOUT DEPRESSING THE BRAKE PEDAL. ONE SECOND LATER, YOU INCREASED THE ACCELERATOR PEDAL TO 100% WITHOUT DEPRESSING THE BRAKE PEDAL. ONE SECOND LATER, YOU CONTINUED DEPRESSING THE ACCELERATOR PEDAL AT 100% WITHOUT DEPRESSING THE PEDAL; HOWEVER, THE VEHICLE'S TRACTION CONTROL ENGAGED & THEREFORE LIMITED THE VEHICLE'S TORQUE DESPITE THE FACT YOU WERE DEPRESSING THE ACCELERATOR PEDAL AT 100% UNTIL YOU 22 23 24 25 26 27 28 21 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page58 28of of125 95 Page PageID ID#:157 #:282 7 DEPRESSED THE BRAKE PEDAL IN THE FOLLOWING SECOND.? INSUFFICIENT INFORMATION PROVIDED BY TESLA. HOW MUCH WAS THE ACCELERATOR PEDAL DEPRESSED? SPEED OF THE CAR? DISTANCE TRAVEL? HOW DOES THIS PROVE THAT THIS IS NOT SUDDEN ACCELERATION? THE LOG DOES PROVE THAT I WAS AT A STOP. MY CAR WILL BE TOTALED BUT IS STILL SITTING AT STORAGE WITH INSURANCE COMPANY FOR A SHORT PERIOD OF TIME. MANY ACCIDENTS WITH TESLA HAS OCCURRED, EVEN JUST LIKE MINE IN TO A RESTAURANT( HTTP://INSIDEEVS.COM/TESLA-MODEL-S-CRASHES-THROUGH-RESTAURANTDRIVER-BLAMES-IT-ON-UNINTENDED-ACCELERATION/) (HTTP://WWW.MOTORAUTHORITY.COM/NEWS/1087171_TESLA-MODEL-SUNINTENDED-ACCELERATION-COMPLAINT-FILED-WITH-NHTSA.) THEY CAN'T ALL BE DRIVERS FAULT. NHTSA NEEDS TO INVESTIGATE THE BOX IN THE CAR BEFORE FATAL INJURIES OCCUR. PUBLIC SAFETY SHOULD BE THE PRIORITY. *TR 8 1 Associated Product 9 Vehicle 1 2 3 4 5 6 10 11 MAKE MODEL YEAR TESLA MODEL S 2014 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 August 18, 2015 NHTSA ID NUMBER: 10749575 Components: VEHICLE SPEED CONTROL NHTSA ID Number: 10749575 Incident Date August 4, 2015 Consumer Location RANCHO SANTA FE, CA Vehicle Identification Number 5YJSA1DN5DF**** Summary of Complaint CRASH Yes FIRE No INJURIES 0 DEATHS 0 TL* THE CONTACT OWNS A 2013 TESLA MODEL S. THE CONTACT STATED THAT THE VEHICLE SUDDENLY ACCELERATED WITHOUT WARNING TO ITS MAXIMUM ACCELERATION RATE AND CRASHED INTO FIVE PARKED VEHICLES. THE DRIVER SIDE OF THE VEHICLE WAS DAMAGED AND THE AIR BAGS DID NOT DEPLOY. THERE WERE NO INJURIES. A POLICE REPORT WAS FILED. THE VEHICLE WAS TOWED 22 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page59 29of of125 95 Page PageID ID#:158 #:283 1 2 3 AWAY BY AAA. THE MANUFACTURER WAS NOTIFIED BUT WAS UNABLE TO ADVISE THE CONTACT OF THE CAUSE OF THE FAILURE. THE FAILURE MILEAGE WAS 9,021. 1 Associated Product Vehicle 4 5 MAKE MODEL YEAR TESLA MODEL S 2013 6 7 8 9 10 December 15, 2015 NHTSA ID NUMBER: 10810457 11 Components: VEHICLE SPEED CONTROL 12 NHTSA ID Number: 10810457 13 Incident Date November 25, 2015 14 Consumer Location COPPELL, TX 15 Vehicle Identification Number 5YJSA1S28FF**** 16 Summary of Complaint 17 CRASH Yes 18 FIRE No 19 INJURIES 0 20 DEATHS 0 21 ON THE AFTERNOON OF NOVEMBER 25, 2015, I WAS DRIVING INTO A STRIP MALL PARKING LOT. I WAS GOING TO PULL INTO ONE OF THOSE SPACES WHERE YOU CAN PARK PERPENDICULAR TO A SIDEWALK CURB AND THE SIDEWALK LEADS UP TO THE STORE FRONTS. 22 23 24 25 26 27 28 WHEN APPROACHING THE PARKING SPACE, THE CAR WAS ALREADY IN REGENERATIVE BRAKING MODE, AND ACCORDING TO TESLA’S LOGS, THE CAR SLOWED DOWN TO 3.5 MPH. SINCE THE CAR HAD ENOUGH MOMENTUM TO ROLL INTO THE SPACE ON ITS OWN, MY FOOT WAS NOT ON THE ACCELERATOR OR THE BRAKE PEDAL. MY FOOT WAS UP RESTING ON ITS HEEL, READY TO TAP THE BRAKE WHEN IT GOT CLOSE ENOUGH TO THE CURB. WHILE THE CAR WAS COASTING INTO THE SPACE THE MOTOR WAS VERY QUIET. ALL OF A SUDDEN, I HEARD A “WHIRRING” SOUND FROM THE MOTOR. I DON’T KNOW HOW BETTER TO DESCRIBE IT, THAN TO SAY IT WAS ALMOST LIKE THE MOTOR WENT FROM A STATE OF SLUMBER TO A FULL STATE OF AWARENESS. 23 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page60 30of of125 95 Page PageID ID#:159 #:284 1 2 3 4 5 I BELIEVE THE MOTOR WAS “WHIRRING” LOUDLY FOR ABOUT A SECOND BEFORE THE CAR TOOK OFF AT SUCH A FAST PACE AND WOUND UP HITTING A BRICK WALL. IT HAPPENED SO QUICKLY, I DIDN’T HAVE ANY TIME TO REACT. AFTER THE IMPACT, I DIDN’T EVEN KNOW THE AIRBAGS DEPLOYED UNTIL I OPENED MY EYES AND SAW THE DEFLATED AIRBAGS IN THE CAR. IT LOOKED LIKE THE CAR JUMPED THE CURB, HIT THE BRICK WALL, BOUNCED BACKWARDS FROM THE IMPACT AND LANDED BACK INTO THE PARKING SPACE. 8 ACCORDING TO TESLA’S LOGS, THE DATA READS THAT THE PEDAL WAS DEPRESSED DOWN TO 97% AND THE CAUSE OF THE ACCIDENT WAS DUE TO DRIVER ERROR. I STAND FIRMLY BY MY STATEMENT THAT MY FOOT WAS NOT ON EITHER THE ACCELERATOR OR THE BRAKE PEDAL WHEN THE CAR ACCELERATED. DATA MAY SHOW THERE WAS PEDAL DEPRESSION BUT I DID NOT DO THE DEPRESSING. THIS WAS DUE TO UNINTENDED ACCELERATION BY THE CAR. 9 1 Associated Product 6 7 10 11 12 Vehicle MAKE MODEL YEAR TESLA MODEL S 2015 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 February 15, 2016 NHTSA ID NUMBER: 10836289 Components: VEHICLE SPEED CONTROL NHTSA ID Number: 10836289 Incident Date September 14, 2015 Consumer Location SEATTLE, WA Vehicle Identification Number 5YJSA3H12EF**** Summary of Complaint CRASH Yes FIRE No INJURIES 0 DEATHS 0 DRIVER PURCHASED A 2014 TESLA MODEL S CAR IN JUNE 2015 FROM THE HANGZHOU CHINA DEALERSHIP. THIS CAR WAS DRIVEN MODERATELY IN THE FOLLOWING MONTHS. IN SEPTEMBER 14, 2015, THE CAR WAS BEING DRIVEN 24 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page61 31of of125 95 Page PageID ID#:160 #:285 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 WITHIN A SMALL, ENCLOSED HOUSING COMPOUND. THE CAR WAS GOING VERY SLOW AS THE DRIVER WAS TURNING TO EXIT THE COMPOUND THROUGH A GATED ENTRANCE. THE CAR SUDDENLY ACCELERATED WITHOUT THE DRIVER’S ASSISTANCE AND DROVE THROUGH THE TRAFFIC GATE BEFORE THE DRIVER WAS ABLE TO QUICKLY BREAK AND BRING THE CAR TO A STOP. ELECTRONIC RECORDS ACCESSED ON SEPTEMBER 15, 2015 REVEALED THE FOLLOWING INFORMATION: THE CAR WAS ORIGINALLY BEING DRIVEN AT 4.7 KM/HR WITH THE ACCELERATION PEDAL DEPRESSED AT 2.8%. WITHIN ONE SECOND, THE ACCELERATION PEDAL WENT FROM BEING DEPRESSED 2.8% TO 84.8% AND THE CAR INCREASED TO 10.75 KM/HR. DURING THE FOLLOWING SECOND, THE CAR’S RECORDS SHOW THE ACCELERATION PEDAL TO CONTINUE TO BE COMPRESSED AT 84% WITH THE SPEED INCREASING TO 18.35 KM/HR, BUT WITH THE BREAK PEDAL ALSO BEING SIMULTANEOUSLY COMPRESSED. IN THE SUBSEQUENT SECOND, THE ANTI-LOCK BRAKES INITIATED, AND THE CAR WAS BROUGHT TO A STOP A SECOND LATER. WE REJECT THE DEALERSHIP’S DECISION THAT THIS WAS DRIVER’S ERROR. IN SUCH A NARROW ENVIRONMENT AS THE HOUSING COMPOUND, AND DURING A SLOW AND CONTROLLED TURN, THERE THE DRIVER HAD NO REASON TO PUT SIGNIFICANT PRESSURE ON THE ACCELERATION PEDAL AS THE RECORDS SHOW – WHETHER INTENTIONAL OR UNINTENTIONAL. WE ALSO FEEL THAT IT WOULD HAVE BEEN DIFFICULT FOR THE DRIVER TO PUSH BOTH THE ACCELERATOR AND BREAK PEDAL TO SUCH A DEGREE SIMULTANEOUSLY. THEREFORE, WE BELIEVE THAT THE CAR EXPERIENCED AN UNINTENDED ACCELERATION, WHICH WAS NOT OF THE DRIVER’S CAUSING. THERE HAVE BEEN MANY SIMILAR REPORTS OF TESLA MODEL S UNINTENDED ACCELERATION CRASHES IN CHINA. WE FEEL THAT THIS IS A SERIOUS SAFETY HAZARD WHICH NEEDS TO BE FURTHER INVESTIGATED. 1 Associated Product Vehicle 18 19 MAKE MODEL YEAR TESLA MODEL S 2014 20 21 22 23 24 May 10, 2016 NHTSA ID NUMBER: 10864163 25 Components: VEHICLE SPEED CONTROL 26 NHTSA ID Number: 10864163 27 Incident Date May 6, 2016 28 Consumer Location FREDERICK, MD 25 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page62 32of of125 95 Page PageID ID#:161 #:286 1 Vehicle Identification Number 5YJSA1E13GF**** 2 Summary of Complaint 3 CRASH Yes 4 FIRE No 5 INJURIES 0 6 DEATHS 0 7 UNINTENDED ACCELERATION OCCURRED ON 2 SEPARATE OCCASIONS WITH 2 DIFFERENT DRIVERS WITHIN 2 WEEKS. MODEL S 70D 8 9 10 11 12 13 14 15 16 17 18 INCIDENT 1: MY WIFE WAS AT A STOP SIGN. SHE REMOVED HER FOOT FROM THE BRAKE AND BEFORE APPLYING THE ACCELERATOR THE CAR SURGED FORWARD AGGRESSIVELY. SINCE HER FOOT NEVER TOUCHED THE ACCELERATOR SHE WAS ABLE TO APPLY THE BRAKE AND STOP WITHIN 8-10 FEET. SHE WAS VISIBLY SHAKEN WHEN SHE GOT HOME BUT, REGRETTABLY, NO REPORT WAS FILED. INCIDENT 2: ABOUT 2 WEEKS LATER, MAY 6, I WAS PULLING INTO MY GARAGE WITH MY WIFE AND BABY IN THE VEHICLE. 2-3 FEET FROM THE THE GARAGE WALL (IN CREEP MODE) I GENTLY TOUCHED THE BRAKE TO COME TO A STOP. AT THAT POINT THE CAR SURGED FORWARD VERY AGGRESSIVELY. I IMMEDIATELY APPLIED HEAVY BRAKE AND WAS ABLE TO STOP THE CAR IN A FEW FEET (SINCE MY FOOT WAS ALREADY OVER THE BRAKE PEDAL). THE FRONT END HIT THE GARAGE WALL AND PENETRATED 10-12 INCHES CAUSING DRYWALL DAMAGE AND SIGNIFICANT DAMAGE TO OUR POWDER ROOM ON THE OTHER SIDE. A REPORT WITH TESLA WAS FILED IMMEDIATELY. LOGS WERE DOWLOADED AND SHOW THAT THE ACCELERATOR WAS DEPRESSED TO 97% POWER IN LESS THAN A SECOND AND THAT IT WAS DRIVER ERROR. MY WIFE AND I HAVE A COMBINED 48 YEARS OF ACCIDENT FREE DRIVING AND NEITHER OF US HAVE EVER MISTAKEN CONTROL PEDALS OR HAVE EVER FLOORED A GAS PEDAL IN A SECOND. 19 20 21 22 23 MY WIFE IS 37, HEALTHY AND A PHYSICIAN, I AM A HEALTHY 42 YEAR OLD PILOT. WE CAN BOTH SAY WITH 100% CERTAINTY THAT NEITHER INCIDENT WAS DRIVER ERROR. TESLA HAS A SERIOUS UNINTENDED ACCELERATION PROBLEM ALSO MADE EVIDENT BY THE OTHER COMPLAINTS FILED ON NHTSA, ALL OF WHICH SEEM TO FALL UNDER SIMILAR OPERATING PARAMETERS. 24 WE NOW HAVE A $90,000 CAR SITTING IN OUR GARAGE THAT IS UNSAFE FOR MY FAMILY, IT SEEMS TESLA IS GOING THE ROUTE OF WAITING FOR INJURY AND DEATHS TO OCCUR BEFORE THEY ACKNOWLEDGE THIS SAFETY DEFECT. 25 1 Associated Product 26 Vehicle 27 28 MAKE MODEL YEAR 26 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page63 33of of125 95 Page PageID ID#:162 #:287 1 MAKE MODEL YEAR TESLA MODEL S 2016 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 May 11, 2016 NHTSA ID NUMBER: 10864353 Components: VEHICLE SPEED CONTROL NHTSA ID Number: 10864353 Incident Date May 11, 2016 Consumer Location DENHAM SPRINGS, LA Vehicle Identification Number 5YJSA1E23FF**** Summary of Complaint CRASH No FIRE No INJURIES 0 DEATHS 0 19 WHILE DRIVING SLOWLY ~5MPH IN A WAL MART PARKING LOT, MY WIFE WENT TO PULL INTO A PARKING SPOT, SHE TOOK HER FOOT OFF THE ACCELERATOR PEDAL AND THE CAR ACCELERATED "FULLY" ALMOST HITTING THE CAR IN FRONT. MY WIFE HAD TO SLAM ON THE BRAKES TO PREVENT AN ACCIDENT. 20 1 Associated Product 21 Vehicle 18 22 23 MAKE MODEL YEAR TESLA MODEL S 2015 24 25 26 27 28 June 17, 2016 NHTSA ID NUMBER: 10874744 Components: VEHICLE SPEED CONTROL 27 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page64 34of of125 95 Page PageID ID#:163 #:288 1 NHTSA ID Number: 10874744 2 Incident Date June 10, 2016 3 Consumer Location SAN JOSE, CA 4 Vehicle Identification Number 5YJSA1E28FF**** 5 Summary of Complaint 6 CRASH Yes 7 FIRE No 8 INJURIES 0 9 DEATHS 0 10 12 UNINTENDED, UNCOMMANDED ACCELERATION. CAR RAPIDLY ACCELERATED TO MAXIMUM THROTTLE DURING PARKING MANEUVER IN A PARKING STRUCTURE. I WAS TRAVELLING AT 3MPH. CAR ACCELERATED, HIT ANOTHER VEHICLE AND A WALL. TESLA CLAIMS VEHICLE LOGS SHOW THROTTLE WAS COMMANDED TO 98%. AT NO TIME DID I HAVE ANYTHING BUT A LIGHT TOUCH ON THE THROTTLE. 13 1 Associated Product 14 Vehicle 11 15 16 MAKE MODEL YEAR TESLA MODEL S 2015 17 18 19 20 21 22 23 24 25 26 27 28 September 27, 2016 NHTSA ID NUMBER: 10910065 Components: VEHICLE SPEED CONTROL, SERVICE BRAKES, AIR BAGS NHTSA ID Number: 10910065 Incident Date September 16, 2016 Consumer Location TUCSON, AZ Vehicle Identification Number SYJSA1H4SFF**** Summary of Complaint CRASH Yes FIRE No 28 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page65 35of of125 95 Page PageID ID#:164 #:289 1 INJURIES 1 2 DEATHS 0 3 I DROVE THE CAR INTO A PARKING SPACE AT THE SCHOOL (DESERT CHRISTIAN ELEMENTARY) IN TUCSON ARIZONA ON SEPT 16TH ABOUT 11:05 AM, WHEN THE CAR ACCELERATED ON ITS OWN (UNINTENDED ACCELERATION) AND CRASHED INTO 2 PARKED VEHICLES AND AIRBAGS DEPLOYED AND I SUSTAINED A FRACTURE OF MY RIGHT ARM REQUIRING SURGERY. ALSO MY CAR (THE TESLA MODEL S) WAS DAMAGED AND THE TWO OTHER PARKED CARS. 4 5 6 7 1 Associated Product Vehicle 8 9 MAKE MODEL YEAR TESLA MODEL S 2015 10 11 12 13 14 February 6, 2017 NHTSA ID NUMBER: 10949955 15 Components: SERVICE BRAKES, VEHICLE SPEED CONTROL 16 NHTSA ID Number: 10949955 17 Incident Date January 5, 2017 18 Consumer Location MOUNTAIN VIEW, CA 19 Vehicle Identification Number 5YJSA1E1XGF**** 20 Summary of Complaint 21 CRASH Yes 22 FIRE No 23 INJURIES 2 24 DEATHS 0 25 I WAS STOPPED AT A STOP LIGHT ON MY WAY TO WORK AROUND 8AM ON A VERY CROWDED CITY STREET. AS THE LIGHT TURNED GREEN, I SLOWLY PRESSED ON THE GAS TO MOVE FORWARD AND THE CAR TOOK OFF AT TOP SPEED. I HIT THE BRAKE BUT THE CAR DID NOT RESPOND - IT DID NOT SLOW DOWN OR STOP, NOR DID ANY ALARM, EITHER VISUAL OR AUDITORY, GO OFF INSIDE THE CAR. TO HIT THE CAR IN FRONT OF ME AND THEN HAD TO SWERVE TO AVOID HITTING DOZENS OF CARS IN MY PATH. I GRAZED PAST A LAMP POST, ANOTHER CAR AND FINALLY CRASHED INTO A TREE. 26 27 28 29 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page66 36of of125 95 Page PageID ID#:165 #:290 1 1 Associated Product 2 Vehicle 3 MAKE MODEL YEAR TESLA MODEL S 2016 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 February 9, 2017 NHTSA ID NUMBER: 10953656 Components: VEHICLE SPEED CONTROL, UNKNOWN OR OTHER NHTSA ID Number: 10953656 Incident Date December 23, 2016 Consumer Location PASADENA, CA Vehicle Identification Number 5YJSA1E22GF**** Summary of Complaint CRASH Yes FIRE No INJURIES 3 DEATHS 0 23 COMPLAINANT, A PHYSICIAN, HAD TAKEN DELIVERY OF A 2016 TESLA MODEL S ON DECEMBER 22, 2016. THE FOLLOWING DAY, SHE PULLED INTO HER DRIVEWAY AT HOME AND BROUGHT THE VEHICLE TO A STOP. WITH HER FOOT STILL ON THE BRAKE, THE VEHICLE SUDDENLY ACCELERATED ON ITS OWN FROM A STOPPED POSITION TO SPEEDS OF BETWEEN 40-60 MPH. THE VEHICLE PLOWED THROUGH THE BRICKS OF HER DRIVEWAY, THROUGH SHRUBS SEPARATING HER PROPERTY FROM HER NEIGHBOR, WENT THROUGH AND ACROSS THE NEIGHBOR’S YARD AND ONTO AND ADJOINING STREET, WHERE IT COLLIDED WITH A TRUCK. 24 1 Associated Product 25 Vehicle 20 21 22 26 27 MAKE MODEL YEAR 28 30 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page67 37of of125 95 Page PageID ID#:166 #:291 1 MAKE MODEL YEAR TESLA MODEL S 2016 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. Model X Reports of Sudden Unintended Acceleration to NHTSA 62. On June 7, 2016, less than six months into the full scale distribution of the Model X, the first complaint of sudden unintended acceleration was registered in NHTSA’s complaint database. This would be the first of seven separate complaints that would be entered in the NHTSA complaint database in just the next four months. 63. The following information was entered into the NHTSA complaint database, and therefore, was available to Tesla, in connection with these seven complaints: June 7, 2016 NHTSA ID NUMBER: 10873117 Components: STRUCTURE, VEHICLE SPEED CONTROL, AIR BAGS NHTSA ID Number: 10873117 Incident Date June 4, 2016 Consumer Location ANAHEIM, CA Vehicle Identification Number 5YJXCAE46GF**** Summary of Complaint CRASH Yes FIRE No INJURIES 1 DEATHS 0 OUR 5 DAY OLD TESLA X WHILE ENTERING A PARKING STALL SUDDENLY AND UNEXPECTEDLY ACCELERATED AT HIGH SPEED ON ITS OWN CLIMBING OVER GRASS AND AND CRASHED INTO A BUILDING. THE AIRBAGS DEPLOYED AND MY WIFE'S ARMS HAVE BURN MARKS AS A CONSEQUENCE. 31 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page68 38of of125 95 Page PageID ID#:167 #:292 1 1 Associated Product 2 Vehicle 3 MAKE MODEL YEAR TESLA MODEL X 2016 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 August 4, 2016 NHTSA ID NUMBER: 10893066 Components: VEHICLE SPEED CONTROL, AIR BAGS NHTSA ID Number: 10893066 Incident Date July 28, 2016 Consumer Location DANBURY, CT Vehicle Identification Number 5YJXCAE29GF**** Summary of Complaint CRASH Yes FIRE No INJURIES 0 DEATHS 0 22 TL* THE CONTACT OWNS A 2016 TESLA MODEL X. WHILE ATTEMPTING TO PARK, THE VEHICLE INDEPENDENTLY ACCELERATED WITHOUT WARNING AND CRASHED INTO A WOOD FENCE. THE AIR BAGS FAILED TO DEPLOY. THERE WERE NO INJURIES. A POLICE REPORT WAS FILED. THE VEHICLE WAS NOT DIAGNOSED OR REPAIRED. THE MANUFACTURER WAS NOTIFIED OF THE FAILURE. THE APPROXIMATE FAILURE MILEAGE WAS 49. 23 1 Associated Product 24 Vehicle 20 21 25 26 MAKE MODEL YEAR 27 28 32 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page69 39of of125 95 Page PageID ID#:168 #:293 1 MAKE MODEL YEAR TESLA MODEL X 2016 2 3 4 5 6 7 August 24, 2016 NHTSA ID NUMBER: 10898260 8 Components: STRUCTURE, VEHICLE SPEED CONTROL, FUEL/PROPULSION SYSTEM 9 NHTSA ID Number: 10898260 10 Incident Date July 8, 2016 11 Consumer Location ORMOND BEACH, FL 12 Vehicle Identification Number 5YJXCBE21GF**** 13 Summary of Complaint 14 CRASH Yes 15 FIRE No 16 INJURIES 0 17 DEATHS 0 18 ON JULY 8TH 2016, AT 9:37 A.M., WHILE SLOWLY PULLING INTO A PARKING SPACE AT CREEKWOOD DOG PARK IN BRADENTON FLORIDA, MY TESLA MODEL X SUDDENLY ACCELERATED UNDER ITS OWN VOLITION, DROVE OVER A PARKING STOP, OVER A FIVE INCH CURB, AND THEN HIT AND KNOCKED OVER A CONCRETE LIGHT POLE. ALL THIS HAPPENED IN A DISTANCE OF LESS THAN TWENTY FEET. TESLA WAS NOTIFIED IMMEDIATELY AND THE CAR WAS TAKEN TO DIMMITT COLLISION CENTER IN CLEARWATER, FLORIDA. THE SERVICE MANAGER AT TESLA OF TAMPA, TOLD ME VERBALLY THE LOG FROM THE EDR SAYS THE CAR WAS TRAVELING AT 6 MPH, THEN THE ACCELERATOR WAS ADVANCED TO OVER 50% AND THEN TO 87%. THE CAR ACCELERATED TO 20 MPH AND ABRUPTLY STOPPED. I DENIED THIS SCENARIO AND ASKED FOR A SUPERVISOR. TESLA’S SOUTHEAST REGIONAL MANAGER MET US AT THE BODY SHOP. HE HANDED ME A LETTER THAT HAD DIFFERENT EDR RESULTS-VEHICLE SPEED WAS 7 MPH, PEDAL POSITION WENT FROM 3.2% TO 15.6% TO 100% AND CAR WENT TO 14 MPH. THE FIRST REPAIR ESTIMATE SHOWED ACTUAL MILEAGE AS 205 AND A SUBSEQUENT REPAIR ESTIMATE SHOWS THE ACTUAL MILEAGE AS 1425. THESE FIGURES ARE INACCURATE SINCE I HAD LOOKED AT THE ODOMETER SEVERAL DAYS BEFORE THE ACCIDENT AND THE MILEAGE WAS OVER 1800. I INFORMED TESLA THAT I AM POSITIVE BEYOND A SHADOW OF DOUBT THAT THE CAR’S ELECTRONIC THROTTLE COMPUTER WAS RESPONSIBLE FOR THE ACCIDENT WHICH THEY DENY. THIS APPEARS TO BE THE INDUSTRY STANDARD SINCE EXPERTS WILL TESTIFY THAT ALTHOUGH A CAR IS RESPONSIBLE FOR UNINTENDED ACCELERATION THERE WILL 19 20 21 22 23 24 25 26 27 28 33 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page70 40of of125 95 Page PageID ID#:169 #:294 3 BE NO TRACEABLE EVIDENCE OF THAT RESPONSIBILITY AND THEREFORE THE MANUFACTURER HAS PLAUSIBLE DENIABILITY. TESLAS ARE UNDERGOING UNINTENDED ACCELERATION AT A RATE MORE FREQUENT THAN 1/5,000 VEHICLES MANUFACTURED. THIS IS WAY MORE FREQUENT THAN THE INDUSTRY STANDARD. GENERAL MOTORS HAS AN EXTREMELY GOOD RATE OF 1/123,000 VEHICLES. 4 1 Associated Product 5 Vehicle 1 2 6 MAKE MODEL YEAR TESLA MODEL X 2016 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 September 19, 2016 NHTSA ID NUMBER: 10908051 Components: VEHICLE SPEED CONTROL, UNKNOWN OR OTHER NHTSA ID Number: 10908051 Incident Date May 23, 2016 Consumer Location BOSTON, MA Vehicle Identification Number 5YJXCAE24GF**** Summary of Complaint CRASH Yes FIRE No INJURIES 0 DEATHS 0 WHILE TURNING LEFT TO ENTER A VERY NARROW GARAGE ENTRANCE I NEEDED TO DETERMINE WHETHER OR NOT I HAD TO STRAIGHTEN OUT BEFORE PULLING IN OR IF MY LEFT TURN WAS TIGHT ENOUGH TO PULL IN WITHOUT REVERSING TO STRAIGHTEN OUT. I SAW THAT I WAS IN THE POSITION THAT I COULD CONTINUE INTO THE GARAGE AND LIGHTLY PRESSED THE ACCELERATOR TO FINISH MY TURN INTO THE GARAGE. IT WAS AT THIS POINT THAT THE CAR ACCELERATED WITH EXTREME FORCE AND WITHIN A SECOND SLAMMED INTO A LARGE CONCRETE POLE THAT WAS JUST INSIDE THE GARAGE TO THE LEFT. I NEVER FELT THE CAR SLOW IN THAT MOMENT, ONLY SPEED UP AND I BELIEVE THE CAR SLAMMED INTO THE POLE WHILE ACCELERATING AND WOULD HAVE 34 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page71 41of of125 95 Page PageID ID#:170 #:295 1 CONTINUED TO ACCELERATE IF NOT FOR THE LARGE POLE. 2 I DID NOT HAVE EITHER FOOT DEPRESSED ON EITHER PEDAL AT THE MOMENT OF COLLISION. THE AIR BAGS DID NOT DEPLOY, BUT THERE WAS VERY SEVERE DAMAGE TO THE FRONT END OF THE CAR THAT WILL BE AT LEAST $25K. 3 4 5 6 7 8 9 10 11 12 13 14 I WAS NOT ON THE PHONE OR DISTRACTED IN ANY WAY. I WAS DRIVING CAREFULLY AND PAYING FULL ATTENTION. THIS IS NOT A CASE OF MISTAKEN PEDAL BECAUSE I WAS INTENDING TO ACCELERATE. AT FIRST TESLA TOLD US OVER THE PHONE THAT THEIR LOGS SHOW THAT THE DRIVER PRESSED THE PEDAL 100% AND THEN TAPPED THE BRAKE BEFORE IMPACT. THIS EXPLANATION SOUNDED PHYSICALLY IMPOSSIBLE BECAUSE THE DISTANCE COVERED WAS LESS THAN 3 CAR LENGTHS. A MONTH LATER TESLA SENT A LETTER STATING THE DRIVER PRESSED THE ACCELERATOR 100% UNTIL THE VEHICLE SENSED A CRASH. TESLA DID NOT RESPOND TO OUR QUERY ABOUT WHY THEIR LOG STORY HAD CHANGED. TESLA ALSO REFUSED TO PROVIDE DATA ABOUT ACCELERATOR/BRAKE PERCENTAGE AND CAR SPEED FOR THE CAR EARLIER IN THE DAY. IF A DRIVER IS PRESSING THE PEDAL 100% IT IS A VERY DELIBERATE ACTION. THIS IS A FAILURE OF THE ACCELERATOR AND THE AUTOMATIC BRAKING. THE CAR ACCELERATED ON ITS OWN AND CRASHED FULL FORCE INTO A LARGE CONCRETE POLE. 1 Associated Product Vehicle 15 16 MAKE MODEL YEAR TESLA MODEL X 2016 17 18 19 20 21 September 26, 2016 NHTSA ID NUMBER: 10909588 22 Components: VEHICLE SPEED CONTROL, WHEELS 23 NHTSA ID Number: 10909588 24 Incident Date September 22, 2016 25 Consumer Location LEXINGTON, MA 26 Vehicle Identification Number 5YJXCAE44GF**** 27 Summary of Complaint 28 CRASH Yes 35 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page72 42of of125 95 Page PageID ID#:171 #:296 1 FIRE No 2 INJURIES 0 3 DEATHS 0 4 6 I WAS GOING UP BY DRIVEWAY WAITING FOR MY GARAGE DOOR TO OPEN. I TOOK MY FOOT OFF THE ACCELERATOR AND WAS SLOWING DOWN WITHOUT HITTING THE BREAKS WAITING FOR THE GARAGE DOOR TO OPEN. THE CAR TOOK OFF THROUGH THE GARAGE DOOR AND HIT MY HUSBANDS CAR SITTING IN THE GARAGE. 7 1 Associated Product 8 Vehicle 5 9 10 MAKE MODEL YEAR TESLA MODEL X 2016 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 September 30, 2016 NHTSA ID NUMBER: 10910701 Components: VEHICLE SPEED CONTROL NHTSA ID Number: 10910701 Incident Date September 29, 2016 Consumer Location BEVERLEY HILLS, CA Vehicle Identification Number UNKNOWN**** Summary of Complaint CRASH No FIRE No INJURIES 0 DEATHS 0 HERE IS A NEW COMPLAINT OF UNINTENDED ACCELERATION WHICH SOUNDS HIGHLY CREDIBLE. HTTPS://FORUMS.TESLA.COM/FORUM/FORUMS/NEAR-ACCIDENT-WHILE-PARKINGJUST-NOW NEAR ACCIDENT WHILE PARKING JUST NOW!! 36 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page73 43of of125 95 Page PageID ID#:172 #:297 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 SUBMITTED BY HAMI05 ON SEPTEMBER 29, 2016 WOW GUYS I'VE SEEN THOSE UNINTENDED ACCELERATION THREADS BEFORE AND THOUGHT THAT THE PERSON MUST'VE ALWAYS DEFINITELY BEEN PUNCHING THE ACCELERATOR, BUT I'M NOT SO SURE AFTER WHAT JUST HAPPENED TO ME. PLEASE HEAR ME OUT, BECAUSE MY SON AND I ARE FRANKLY QUITE SCARED RIGHT NOW. I WAS DRIVING INTO A PARKING LOT AND I JUST LIGHTLY PRESSED THE ACCELERATOR AS I WAS GOING UNDER 10 MPH AND ALL OF A SUDDEN MY X WENT FROM 10 TO OVER 40 MPH IN ABOUT 2 SECONDS! I DIDN'T EVEN KNOW THE THING COULD ACCELERATE THAT FAST! CAN ANYBODY EXPLAIN WHAT THE HECK MIGHT'VE HAPPENED? THANKFULLY I WAS ABOUT 100 FT AWAY FROM ANY OTHER CARS BEFORE IT TOOK OFF, SO I HAD TIME TO SLAM THE BRAKES WITHOUT PANICKING, OTHERWISE WHO KNOWS WHAT WOULD'VE HAPPENED... I'M CERTAIN THAT I DIDN'T ACCIDENTALLY ACTIVATE CRUISE CONTROL/AP, SO THERE'S NO WAY THAT COULD'VE CAUSED IT. MY THEORY IS THAT THE REGENERATIVE BRAKES MAY HAVE GIVEN ME A SUDDEN KICK OF ACCELERATION? I'M KIND OF WORRIED NOW, BECAUSE THIS IS ACTUALLY THE SECOND TIME SOMETHING LIKE THIS HAS HAPPENED TO ME, EXCEPT THE FIRST TIME WASN'T NEARLY AS BAD, SO I DIDN'T ASK YOU GUYS ABOUT IT. HAS ANYONE ELSE HAD THIS HAPPEN TO THEM? DO YOU GUYS THINK I NEED TO ASK MY TESLA TEAM ABOUT THIS? THIS HASN'T ONLY HAPPENED TO ME WHILE GETTING READY TO PARK, THE FIRST TIME I WAS JUST ACCELERATING UP TO 25 IN MY NEIGHBORHOOD AND IT SUDDENLY WENT TO 35 IN A SECOND BUT I WASN'T TOO BOTHERED ABOUT THAT, BECAUSE IT WAS JUST A 10MPH BURST, BUT THIS ONE THAT HAPPENED TO ME TODAY WAS THE CAR JUMPING 30 MPH... I'VE DRIVEN THIS CAR FOR 2000 MILES NOW AND IT'S THE ONLY CAR I'VE BEEN DRIVING REALLY OVER THE PAST MONTH. 1 Associated Product Vehicle 17 18 MAKE MODEL YEAR TESLA MODEL X 2016 19 20 21 22 23 October 12, 2016 NHTSA ID NUMBER: 10915633 24 Components: SERVICE BRAKES, VEHICLE SPEED CONTROL 25 NHTSA ID Number: 10915633 26 Incident Date October 7, 2016 27 Consumer Location SANTA CLARA, CA 28 Vehicle Identification Number 5YJXCBE22GF**** 37 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page74 44of of125 95 Page PageID ID#:173 #:298 1 Summary of Complaint 2 CRASH Yes 3 FIRE No 4 INJURIES 0 5 DEATHS 0 6 8 TL* THE CONTACT OWNS A 2016 TESLA MODEL X. WHILE PARKING THE VEHICLE, IT ACCELERATED WHILE DEPRESSING THE BRAKE PEDAL AND CRASHED INTO A FENCE. THERE WERE NO INJURIES AND A POLICE REPORT WAS NOT FILED. THE AIR BAGS DID NOT DEPLOY. THE VEHICLE WAS NOT DIAGNOSED OR REPAIRED. THE MANUFACTURE WAS NOTIFIED OF THE FAILURE. THE FAILURE MILEAGE WAS 1,000. 9 1 Associated Product 7 10 11 12 Vehicle MAKE MODEL YEAR TESLA MODEL X 2016 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 December 14, 2016 NHTSA ID NUMBER: 10935272 Components: AIR BAGS, STRUCTURE, VEHICLE SPEED CONTROL NHTSA ID Number: 10935272 Incident Date December 13, 2016 Consumer Location AMAGANSETT, NY Vehicle Identification Number 5YJXCBE24GF**** Summary of Complaint CRASH Yes FIRE No INJURIES 1 DEATHS 0 I HAD PULLED INTO A PARKING LOT, PROCEEDED TO PULL INTO A SPOT ADJACENT TO A CINDER BLOCK BUILDING. I HAD MY FOOT LIGHTLY ON THE GAS PEDAL, THEN AS I MADE THE TURN INTO THE SPOT, MY FOOT WAS ON THE BRAKE - THE 38 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page75 45of of125 95 Page Page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ssociated Product Vehicle 8 9 MAKE MODEL YEAR TESLA MODEL X 2016 10 11 12 13 14 January 3, 2017 NHTSA ID NUMBER: 10939234 15 Components: STRUCTURE, FUEL/PROPULSION SYSTEM, VEHICLE SPEED CONTROL 16 17 18 19 20 21 22 23 24 25 26 27 28 NHTSA ID Number: 10939234 Incident Date November 2, 2016 Consumer Location SANTA CLARA, CA Vehicle Identification Number 5YJXCAE27GF**** Summary of Complaint CRASH Yes FIRE No INJURIES 0 DEATHS 0 WHILE TURNING LEFT INTO A PARKING SPOT AT A VERY SLOW SPEED, THE CAR SUDDENLY ACCELERATED WITH EXTREME FORCE. IT RAN OVER A CURB AND COLLIDED WITH A TREE AND A TRUCK. THERE WAS ONLY LIGHT PRESSURE ON THE ACCELERATOR. THE AUTOMATIC BRAKING AND THE AIRBAGS DID NOT DEPLOY. THERE WAS OVER $18 000 DAMAGE TO THE TWO VEHICLES AND THE TESLA MODEL X IS NOT DRIVEABLE WITHOUT REPAIRS. 39 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page76 46of of125 95 Page PageID ID#:175 #:300 1 1 Associated Product 2 Vehicle 3 MAKE MODEL YEAR TESLA MODEL X 2016 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 February 27, 2017 NHTSA ID NUMBER: 10957394 Components: STRUCTURE, VEHICLE SPEED CONTROL NHTSA ID Number: 10957394 Incident Date February 27, 2017 Consumer Location MARIETTA, GA Vehicle Identification Number 5YJXCAE24GF**** Summary of Complaint CRASH Yes FIRE No INJURIES 1 DEATHS 0 TAKATA RECALL I DROVE MY TESLA MODEL X 2016 TODAY TO WORK AND WHEN I WAS ABOUT TO PARK THE CAR IN THE PARKING LOT (AROUND 6 MILES PER HOUR MAY BE) IT SUDDENLY ACCELERATED AND HIT THE CONCRETE WALL AND BOUNCED BACK AROUND 8 FEET. SINCE IT WAS FOR PARKING I CAN SURELY SAY THAT I DID NOT ACCELERATE THE CAR. THE STEERING AIR BAGS AND KNEE AIR BAGS CAME OFF AND ALSO THE PASSENGER SIDE KNEE AIR BAGS CAME OFF AS WELL. I SEARCHED ONLINE AND THERE SEEMS TO BE A CLASS ACTION SUITE ON THIS ISSUE BUT TESLA IS NOT ACCEPTING IT AS THE GLITCH IN THEIR SOFTWARE OR SOME OTHER COMPONENT. I FELT LIKE THE ACCELERATOR GOT PRESSED THE WAY WHEN THE CAR WAS IN CRUISE MODE. UNLESS I WANTED TO HIT THE WALL INTENTIONALLY THERE WAS NO NEED FOR ME TO PRESS THE ACCELERATOR TO SPEED FROM ALMOST ZERO TO WHATEVER THE HIGH SPEED IT ATTAINED AT THE TIME OF HITTING THE WALL. 1 Associated Product Vehicle 40 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page77 47of of125 95 Page PageID ID#:176 #:301 1 MAKE MODEL YEAR TESLA MODEL X 2016 2 3 4 5 6 a. 7 8 Reports of Sudden Unintended Acceleration are 71 Times Higher Than Historical Rates for Other Vehicles 64. Tesla sold approximately 18,240 Model X vehicles in the United States from 9 September 29, 2015, through the end of 2016. The Model X having at least 13 reported 10 (either to NHTSA or directly to Tesla) sudden unintended acceleration incidents in the 11 first full year of production with only 18,240 vehicles on the road (most of which have 12 been on the road significantly less than one year) results in a rate of 71 SUA events per 13 100,000 vehicles per year. 14 65. In contrast, according to a study by NASA of unintended acceleration 15 reports to the National Highway Traffic Administration from 2000 to 2010, from there 16 was 1 SUA accident per 100,000 vehicles per year. Accordingly, the Model X is reported 17 to experience 71 times as many SUA events as the average number of reported SUA 18 events for other manufacturers. 19 66. Rather than correcting the defect through programmatic logic, Tesla’s 20 strategy in responding to SUA complaints has been to blame any report of SUA on driver 21 error. For example, Tesla was notified by the Model X owner of the first SUA incident 22 registered in the NHTSA complaints database. After performing an investigation, Tesla 23 seized on a nearly identical conclusion that it reached in its investigation of Plaintiffs’ 24 incident, stating: “We analyzed the vehicle logs which confirm that this Model X was operating correctly under manual control and was never in Autopilot or cruise control at the time of the incident or in the minutes before. Data shows that the vehicle was traveling at 6 mph when the accelerator pedal was abruptly increased to 100%. Consistent with the driver's actions, the vehicle applied torque and accelerated as instructed. Safety is the top priority at Tesla and we engineer and build our cars with this foremost in 25 26 27 28 41 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page78 48of of125 95 Page PageID ID#:177 #:302 mind. We are pleased that the driver is ok and ask our customers to exercise safe behavior when using our vehicles.” 1 2 3 4 5 6 D. Plaintiff Ji Chang Son’s and Plaintiff K.M.S.’s SUA Event 67. On September 10, 2016, Plaintiff Ji Chang Son was returning to his Orange County home in his Model X with his son, Plaintiff K.M.S. 68. At approximately 8:00 p.m., Plaintiff Ji Chang Son slowed his vehicle to 7 approximately 6 miles per hour and made a left turn easing into his driveway the garage 8 after the door opened, just as he had done on countless prior occasions. 9 69. Except that this time, as Plaintiff Ji Chang Son slowly pulled into his 10 driveway, the vehicle spontaneously began to accelerate at full power, jerking forward 11 and crashing through the interior wall of the garage, destroying several wooden support 12 beams in the wall and a steel sewer pipe, among other things, and coming to rest in 13 Plaintiffs’ living room. Plaintiffs were trapped inside the vehicle because the doors were 14 pinned shut by wood support beams and other debris. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 42 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page79 49of of125 95 Page PageID ID#:178 #:303 1 70. Smoke began flooding the interior of the vehicle. Plaintiff Ji Chang Son and 2 Plaintiff K.M.S. feared that the Model X was about to explode and burst into flames and 3 furiously sought other ways to escape the vehicle. 4 71. Fortunately, Plaintiff K.M.S. managed to open a window and crawl out. He 5 ran to the other side of the Model X and struggled to force the window open on Plaintiff 6 Ji Chang Son's side of the vehicle. As the smoke continued to fill the Model X's interior 7 and now the entire living room, Plaintiff K.M.S. courageously helped his father Plaintiff 8 Ji Chang Son escape from the vehicle. 9 10 72. Both Plaintiff Son and Plaintiff K.M.S. suffered lacerations to their legs in the collision, with residual scarring. 11 73. Plaintiff Son immediately notified Defendant of the incident and that the 12 vehicle had exhibit sudden unintended acceleration as he was pulling into his driveway. 13 Tesla responded by stating that the “vehicle responded correctly to driver-applied inputs” 14 even though acknowledging that Mr. Son had made a left turn into his driveway at less 15 than 5 miles per hour, and had not been pressing the accelerator pedal for the preceding 4 16 seconds, when the computer registered a 100% acceleration command the second before 17 the vehicle collided with the back wall of his garage. 18 E. 19 Plaintiff Khansari’s SUA Event 74. On January 26, 2016, Plaintiff Khansari was the driver of his Model S 20 traveling north on Interstate 5 in Orange County, California. Plaintiff Khansari exited the 21 interstate at Oso Parkway and pulled into a Union 76 gas station. 22 75. Plaintiff Khansari drove past the gas pumps intended to park his vehicle in a 23 parking spot. As Plaintiff Khansari neared the parking spot, his Model S experienced 24 uncommanded full power acceleration, causing the vehicle to crash into a fixed barrier. 25 // 26 // 27 // 28 // 43 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page80 50of of125 95 Page PageID ID#:179 #:304 1 2 3 4 5 6 7 8 9 10 11 12 13 76. Plaintiff Khansari notified Tesla of the incident and that he believed the 14 vehicle had exhibited sudden unintended acceleration. However, Defendant told Plaintiff 15 Khansari that the vehicle “was operating within normal operating parameters, did not 16 exhibit any unexpected behavior and appropriately responded to the driver-applied 17 inputs.” Tesla acknowledged that the vehicle had been traveling at 4 miles per hour when 18 the vehicles onboard computer determined that the accelerator went from 0% to 100% in 19 under three seconds, accelerating the vehicle to 16 miles per hour at the point of impact, 20 and then continued to register 100% acceleration for 4 seconds after the impact. 21 Defendant maintained that the acceleration was the result of driver input even while 22 acknowledging that the brakes were pressed intermittently at the same time that the 23 vehicle was exhibiting full acceleration. 24 F. 25 Plaintiff Jarrahi’s Vehicle’s SUA Event 77. On December 5, 2016, Plaintiff Jarrahi’s wife was the driver of Plaintiff 26 Jarrahi’s Model X near the Forsyth County Day School. Plaintiff Jarrahi’s wife was 27 driving westbound on State Route 1001 and had come to a complete stop as she waited 28 for a crossing guard to allow her to make a right turn onto PVA Forsyth County Day. As 44 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page81 51of of125 95 Page PageID ID#:180 #:305 1 she commenced her turn, the vehicle accelerated at what felt like full power. As a result 2 of the powerful acceleration, Plaintiff Jarrahi’s wife was unable to negotiate the right 3 hand turn and her vehicle collided with a vehicle in the southbound lanes of PVA Forsyth 4 Country Day, causing her air bags to deploy. 5 6 78. G. 7 Plaintiff Jarrahi notified Tesla of the SUA incident. Plaintiff Tomko’s Vehicle’s SUA Incidents 79. On October 15, 2016, Plaintiff Tomko’s wife was driving Plaintiff Tomko’s 8 Model S slowly in a parking lot and was preparing to stop when the vehicle experienced 9 uncommanded acceleration, causing the vehicle to surge forward, out of the parking lot 10 and into a wooded area. The vehicle suffered minor damage and had to be towed out of 11 the wooded area. 12 80. Plaintiff Tomko notified Defendant of the SUA incident. After uploading 13 data from the vehicle’s onboard computers, Defendant informed Plaintiff Tomko that the 14 vehicle had gone from 0% acceleration to 100% acceleration, that the vehicle had not 15 malfunctioned, and concluded that the vehicle was appropriately responding to driver 16 input. 17 81. On January 20, 2017, Plaintiff Tomko’s spouse was again driving Plaintiff 18 Tomko’s Model S in a parking lot and preparing to park when it again experienced 19 uncommanded acceleration and surged forward, jumping a parking block and traveling 20 50 feet before she was able to bring the vehicle to a stop. 21 82. Plaintiff Tomko again notified Defendant of the SUA incident. After 22 uploading data from the vehicle’s onboard computers and inspecting the vehicle, 23 Defendant again informed Plaintiff Tomko that the car had gone from 4% acceleration to 24 100% acceleration and again attributed the incident to driver input. 25 H. 26 Plaintiff Shastrula’s SUA Incident 83. On February 27, 2017, Plaintiff Shastrula was driving his Model X in a 27 parking structure at his office. As Plaintiff Shastrula approached his intended parking 28 spot, he slowed the vehicle and made a left turn into the parking spot. He completed the 45 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page82 52of of125 95 Page PageID ID#:181 #:306 1 left turn and was advancing the last few feet into the spot when his Model X experienced 2 uncommanded full power acceleration and collided with a concrete wall, causing the 3 airbags to deploy. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 46 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page83 53of of125 95 Page PageID ID#:182 #:307 1 2 I. Defects in the Model S and Model X 84. The Model S and Model X – designed, manufactured, sold, and/or 3 distributed by Tesla – are defective in that they are vulnerable to incidents of sudden full 4 power unintended acceleration. Regardless of the many root causes that may create this 5 overarching defect, an effective automated emergency braking and/or automated throttle 6 control mechanism would serve as a fail-safe design feature to prevent and/or minimize 7 the risk of injury, harm, or damage to Tesla owners, occupants, and the general public 8 form SUA events. 9 85. Tesla has been aware that SUA events are occurring at a markedly high rate 10 in the Model S, and an even more alarmingly high rate in the Model X, but has not, as of 11 yet, explained the root cause of this dramatic increase in SUA events. This made it 12 critically important for Tesla to design and implement an adequate fail-safe system to 13 prevent or mitigate the consequences of SUA. Therefore, the Model S and the Model X 14 are defective for their lack of an adequate fail safe system as a result of the following: 15 a. The inability of the Automated Emergency Braking system to be able to 16 detect when full acceleration has not been commanded by the driver; 17 b. The Automated Emergency Braking system’s identification of 100% 18 accelerator pedal input as an indicator of positive driver control that 19 automatically renders the Automated Emergency Braking system 20 inoperative; 21 c. The lack of a proper fail-safe logic that will cut power and apply the brakes 22 when the vehicle registers full power acceleration when there are fixed 23 objects in the immediate path of the vehicle; and 24 d. The lack of a proper fault detection system that would recognize an SUA 25 event beyond the maximum design tolerance and respond by shutting down 26 the throttle. 27 28 86. Finally, the faults and defects in Tesla’s safety critical vehicle electronic systems described above show that Tesla has not properly tested or validated these 47 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page84 54of of125 95 Page PageID ID#:183 #:308 1 systems individually or as a whole and, moreover, Tesla has failed to verify that all 2 electronic vehicle systems capable of requesting torque are robust enough, and contain 3 sufficient redundancies to prevent SUA events. 4 J. Choice of Law Allegations 5 87. Tesla is headquartered in Palo Alto, California. 6 88. Tesla does substantial business in California, with a significant portion of 7 the proposed Nationwide Class located in California. For example, approximately 45% 8 of all new Tesla Model S sales come from California, and it is expected a similar 9 percentage of Model X sales are from California. 10 89. Tesla’s main automobile manufacturing facility is also located in California. 11 90. In addition, the conduct that forms the basis for each and every Class 12 members’ claims against Tesla emanated from Tesla’s headquarters in California. 13 V 14 CLASS ALLEGATIONS 15 91. Plaintiff Son, Khansari, Shastrula, Jarrahi, and Tomko brings this action on 16 their own behalf, and on behalf of a nationwide class pursuant to Federal Rules of Civil 17 Procedure, Rules 23(a), 23(b)(2), and/or 23(b)(3). 18 Nationwide Class: All persons or entities in the United States who are current owners and/or lessees of a Tesla Model S or Model X. 19 20 21 92. In the alternative to the Nationwide Class, and pursuant to Federal Rules of 22 Civil Procedure, Rule 23(c)(5), Plaintiffs allege a separate class for the following States 23 based on the applicable laws set forth in the alternate state law counts, only in the event 24 that the Court declines to certify the Nationwide Class above. Specifically, the state 25 classes consist of the following: 26 27 28 California Class: All persons or entities in California who are current owners and/or lessees of a Tesla Model S or Model X for primarily personal, family or household purposes, as defined by California Civil Code § 1791(a). 48 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page85 55of of125 95 Page PageID ID#:184 #:309 1 Georgia Class: 2 All persons or entities in Georgia who are current owners and/or lessees of a Tesla Model S or Model X. 3 North Carolina: 4 5 All persons or entities in North Carolina who are current owners and/or lessees of a Tesla Model S or Model X. 6 Ohio: 7 All persons or entities in Ohio who are current owners and/or lessees of a Tesla Model S or Model X. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 93. Together, the Nationwide Class and the State Classes shall be collectively referred to herein as the “Class.” Excluded from the Class are Defendant Tesla, its affiliates, employees, officers and directors, persons or entities that purchased the Class Vehicles for resale, and the Judge(s) assigned to this case. Plaintiffs reserve the right to modify, change, or expand the Class definitions based on discovery and further investigation. 94. Numerosity: Upon information and belief, the Class is so numerous that joinder of all members is impracticable. While the exact number and identities of individual members of the Class are unknown at this time, such information being in the sole possession of Defendant and obtainable by Plaintiff Son only through the discovery process, Plaintiffs believe, and on that basis allege, that thousands of Class Vehicles have been sold and leased in each of the States that are the subject of the Class. 95. Existence and Predominance of Common Questions of Fact and Law: Common questions of law and fact exist as to all members of the Class. These questions predominate over the questions affecting individual Class Members. These common legal and factual questions include, but are not limited to, whether: a. the Model S and Model X vehicles were sold or leased with a defect; 26 b. Tesla knew of the defect but failed to disclose the problem and its consequences to its customers; 27 c. Tesla misrepresented the safety of the Model S and Model X; 28 49 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page86 56of of125 95 Page PageID ID#:185 #:310 d. Tesla’s misrepresentations and omissions regarding the safety of its vehicles were likely to deceive a reasonable person in violation of the CLRA; 1 2 e. Tesla violated the unlawful prong of the UCL by its violation of the CLRA; 3 4 f. Tesla violated the unlawful prong of the UCL by its violation of federal laws; 5 g. misrepresentations and omissions regarding the safety of its vehicles were likely to deceive a reasonable person in violation of the fraudulent prong of the UCL; 6 7 h. reasonable consumers would consider the defect or its consequences to be material; 8 9 i. Tesla breached its express warranties regarding the safety and quality of its vehicles; 10 j. Tesla breached the implied warranty of merchantability because its vehicles were not fit for their ordinary purpose due to their sudden acceleration defect; 11 12 k. Tesla has failed to provide free repairs as required by its New Vehicle Limited Warranty and/or Powertrain Warranty; 13 14 l. Tesla should be required to disclose the existence of the defect; 15 m. Whether Plaintiffs and Class Members are entitled to damages, restitution, restitutionary disgorgement, equitable relief, and/or other relief; and 16 17 n. The amount and nature of such relief to be awarded to Plaintiffs and the National Class. 18 19 20 21 22 23 24 25 26 27 28 96. Typicality: All of Plaintiffs’ claims are typical of the claims of the Class inasmuch as Plaintiffs purchased or leased a Tesla Model S or Model X vehicle, and each member of the Class either purchased or leased a Tesla Model S or Model X vehicle. Furthermore, Plaintiffs and all members of the Class sustained the same monetary and economic injuries of being sold a vehicle with a safety defect that is still present in the vehicle, and the remedy sought for each is the same in which Plaintiffs seek a fix of the defect for themselves and all absent Class Members. 97. Adequacy: Plaintiffs are adequate representatives because their interests do not conflict with the interests of the Class that they seek to represent, they have retained counsel competent and highly experienced in complex class action litigation, and they 50 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page87 57of of125 95 Page PageID ID#:186 #:311 1 intend to prosecute this action vigorously. The interests of the Class will be fairly and 2 adequately protected by Plaintiffs and their counsel. 3 98. Superiority: A class action is superior to all other available means of fair 4 and efficient adjudication of the claims of Plaintiffs and members of the Class. The 5 injury suffered by each individual Class member is relatively small in comparison to the 6 burden and expense of individual prosecution of the complex and extensive litigation 7 necessitated by Defendant Tesla’s conduct. It would be virtually impossible for members 8 of the Class individually to redress effectively the wrongs done to them. Even if the 9 members of the Class could afford such individual litigation, the court system could not. 10 Individualized litigation presents a potential for inconsistent or contradictory judgments. 11 Individualized litigation increases the delay and expense to all parties, and to the court 12 system, presented by the complex legal and factual issues of the case. By contrast, the 13 class action device presents far fewer management difficulties, and provides the benefits 14 of single adjudication, an economy of scale, and comprehensive supervision by a single 15 court. Upon information and belief, members of the Class can be readily identified and 16 notified based on, inter alia, Defendant’s vehicle identification numbers, warranty 17 claims, registration records, and database of complaints. 18 99. Defendant has acted, and refused to act, on grounds generally applicable to 19 the Class, thereby making appropriate final equitable relief with respect to the Class as a 20 whole. 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 51 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page88 58of of125 95 Page PageID ID#:187 #:312 1 VI 2 CAUSES OF ACTION 3 FIRST CAUSE OF ACTION 4 VIOLATIONS OF CALIFORNIA’S CONSUMER LEGAL REMEDIES ACT 5 (“CLRA”) (Cal. Civ. Code § 1750, et seq.) 6 (By Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula on Behalf of the 7 Nationwide Class or, Alternatively, by Plaintiffs Son and Khansari on behalf of the 8 California Class) 9 10 11 100. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 101. Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula brings this claim on 12 behalf of themselves and on behalf of the Members of the Nationwide Class. 13 Alternatively, Plaintiffs Son and Khansari bring this claim on behalf of themselves and 14 on behalf of the Members of the California Class. 15 16 17 18 19 20 21 102. Tesla is a “person” as that term is defined in California Civil Code § 1761(c). 103. Plaintiffs and the Class are “consumers” as that term is defined in California Civil Code § 1761(d). 104. Plaintiff Son previously filed an affidavit that shows venue in this District is proper, to the extent such an affidavit is required by California Civil Code § 1780(d). 105. Tesla engaged in unfair and deceptive acts in violation of the CLRA by the 22 practices described above, and by knowingly and intentionally concealing from Plaintiffs 23 and Class Members that the Model S and Model X suffer from a defect(s) (and the costs, 24 risks, and diminished value of the vehicles as a result of this problem). These acts and 25 practices violate, at a minimum, the following sections of the CLRA: 26 27 28 (a)(1) representing that Defective Vehicles have characteristics, uses, benefits, and qualities which they do not have (a)(2) Misrepresenting the source, sponsorship, approval or certification of goods or services; 52 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page89 59of of125 95 Page PageID ID#:188 #:313 1 2 3 4 5 6 (a)(5) Representing that goods or services have sponsorships, characteristics, uses, benefits or quantities which they do not have, or that a person has a sponsorship, approval, status, affiliation or connection which he or she does not have; (a)(7) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another; and (a)(9) Advertising goods and services with the intent not to sell them as advertised. 7 8 9 10 11 12 13 106. Tesla’s unfair or deceptive acts or practices occurred repeatedly in Tesla’s trade or business, were capable of deceiving a substantial portion of the purchasing public, and imposed a serious safety risk on the public. 107. Tesla knew that the Model S and Model X were defectively designed or manufactured, unsafe, and were not suitable for their intended use. 108. Tesla knew that the Model S and Model X were defectively designed or 14 manufactured, would fail without warning, and were not suitable for their intended use of 15 regulating power and vehicle speed based on driver commands. Tesla nevertheless failed 16 to warn Plaintiffs and the Class Members about these inherent dangers despite having a 17 duty to do so. 18 109. Tesla owed Plaintiffs a duty to disclose the defective nature of Model S and 19 Model X, including the dangerous risk of throttle control failure and the lack of adequate 20 fail-safe mechanisms, because they: 21 a. Possessed exclusive knowledge of the defects rendering the Model S and 22 Model X inherently more dangerous and unreliable than similar vehicles; 23 b. Intentionally concealed the hazardous situation with Model S and Model X 24 vehicles through its deceptive marketing campaign designed to hide the life- 25 threatening problems from Plaintiffs; and/or 26 c. Made incomplete representations about the safety and reliability of the 27 Model S and Model X generally, while purposefully withholding material 28 facts from Plaintiffs that contradicted these representations. 53 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page90 60of of125 95 Page PageID ID#:189 #:314 1 110. The Model S and Model X vehicles pose an unreasonable risk of death or 2 serious bodily injury to Plaintiffs, passengers, other motorists, pedestrians, and the public 3 at large, because they are susceptible to incidents of SUA. 4 111. Whether or not a vehicle (a) accelerates only when commanded to do so; 5 (b) accelerates when it knows will result in the collision with a fixed object; and (c) does 6 not activate the automatic emergency braking when it receives instructions to accelerate 7 100% into a fixed object are facts that a reasonable consumer would consider important 8 in selecting a vehicle to purchase or lease. 9 112. When Plaintiffs bought leased their Model S or Model X for personal, 10 family, and household purposes, they reasonably expected the vehicle would (a) not 11 accelerate unless commanded to do so by application of the accelerator pedal or other 12 driver controlled means; (b) would not accelerate when it knows will result in the 13 collision with a fixed object; and (c) would not deactivate the automatic emergency 14 braking when it receives instructions to accelerate 100% into a fixed object. 15 113. Tesla’s unfair or deceptive acts or practices were likely to and did in fact 16 deceive reasonable consumers, including Plaintiffs, about the true safety and reliability of 17 Defective Vehicles. 18 114. As a result of its violations of the CLRA detailed above, Tesla caused actual 19 damage to Plaintiffs and, if not stopped, will continue to harm Plaintiffs. Plaintiffs and 20 the Class Members currently own or lease, or within the class period have owned or 21 leased, a Model S or Model X that is defective and inherently unsafe. 22 115. Plaintiffs risk irreparable injury as a result of Tesla’s acts and omissions in 23 violation of the CLRA, and these violations present a continuing risk to Plaintiffs as well 24 as to the general public. 25 116. The facts concealed or not disclosed by Tesla to Plaintiffs and the Class 26 Members are material in that a reasonable consumer would have considered them to be 27 important in deciding whether to purchase the Model S or Model X or pay a lesser price. 28 Had Plaintiffs and the Class Members known about the defective nature of the Model S 54 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page91 61of of125 95 Page PageID ID#:190 #:315 1 and Model X, they would not have purchased the Model S or Model X or would have 2 paid less for them. 3 4 117. Plaintiffs’ and the other Class Members’ injuries were proximately caused by Tesla’s fraudulent and deceptive business practices. 5 118. Pursuant to the provisions of California Civil Code section 1782(a), 6 Plaintiffs sent a notice letter to Defendant providing it with the opportunity to correct its 7 business practices. To Plaintiffs’ knowledge, Defendant no action within the specified 8 notice period. 9 119. Pursuant to California Civil Code section 1780, Plaintiffs, on behalf of 10 themselves and Members of the California Class, seek an order from this Court enjoining 11 Defendant from continuing the methods, acts and practices set forth above and a 12 declaration that Defendant’s conduct violates the Consumers Legal Remedies Act, as 13 well as actual and punitive damages and attorneys’ fees and costs. 14 SECOND CAUSE OF ACTION 15 VIOLATIONS OF THE CALIFORNIA UNFAIR COMPETITION LAW 16 (Cal. Bus. & Prof. Code § 17200) 17 (By Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula on Behalf of the 18 Nationwide Class or, Alternatively, by Plaintiffs Son and Khansari on behalf of the 19 California Class) 20 21 22 120. Plaintiffs’ and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 121. Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula brings this claim on 23 behalf of themselves and on behalf of the Members of the Nationwide Class. 24 Alternatively, Plaintiffs Son and Khansari bring this claim on behalf of themselves and 25 on behalf of the Members of the California Class. 26 122. The California Unfair Competition Law (“UCL”) prohibits acts of “unfair 27 competition,” including any “unlawful, unfair or fraudulent business act or practice” and 28 “unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code § 17200. 55 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page92 62of of125 95 Page PageID ID#:191 #:316 1 123. Tesla has violated the unlawful prong of section 17200 by its violations of 2 the Consumer Legal Remedies Act, Cal. Civ. Code § 1750, et seq., as set forth in Count I 3 by the acts and practices set forth in this Complaint. 4 124. Tesla has violated the fraudulent prong of section 17200 because the 5 misrepresentations and omissions regarding the safety and reliability of its vehicles as set 6 forth in this Complaint were likely to deceive a reasonable consumer, and the information 7 would be material to a reasonable consumer. 8 125. Tesla has violated the unfair prong of section 17200 because the acts and 9 practices set forth in the Complaint, including the manufacture and sale of vehicles with a 10 sudden acceleration defect that lack effective fail-safe mechanism, and Tesla’s failure to 11 adequately investigate, disclose and remedy, offend established public policy, and 12 because the harm they cause to consumers greatly outweighs any benefits associated with 13 those practices. 14 126. Tesla’s conduct has also impaired competition within the automotive 15 vehicles market and has prevented Plaintiff from making fully informed decisions about 16 whether to purchase or lease Defective Vehicles and/or the price to be paid to purchase or 17 lease Defective Vehicles. 18 127. Plaintiffs have suffered an injury in fact, including the loss of money or 19 property, as a result of Tesla’s unfair, unlawful and/or deceptive practices. As set forth in 20 the allegations concerning Plaintiffs, in purchasing or leasing their Tesla vehicle, 21 Plaintiffs relied on the misrepresentations and/or omissions of Tesla with respect of the 22 safety and reliability of the vehicles. Tesla’s representations turned out not to be true 23 because the vehicles can unexpectedly and dangerously accelerate out of the drivers’ 24 control. Had Plaintiffs known this, they would not have purchased or leased their Tesla 25 vehicles and/or paid as much for them. 26 27 128. All of the wrongful conduct alleged herein occurred, and continues to occur, in the conduct of Tesla’s business. Tesla’s wrongful conduct is part of a pattern or 28 56 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page93 63of of125 95 Page PageID ID#:192 #:317 1 generalized course of conduct that is still perpetuated and repeated, both in the State of 2 California and nationwide. 3 129. Plaintiffs request that this Court enter such orders or judgments as may be 4 necessary to enjoin Tesla from continuing its unfair, unlawful, and/or deceptive practices 5 and to restore to Plaintiffs and members of the Class any money Tesla acquired by unfair 6 competition, including restitution and/or restitutionary disgorgement, as provided in 7 California Business & Professions Code section 17203 and California Civil Code section 8 3345; and for such other relief set forth below. 9 THIRD CAUSE OF ACTION 10 VIOLATION OF CALIFORNIA FALSE ADVERTISING LAW 11 (Cal. Bus. & Prof. Code §§ 17500, et seq.) 12 (By Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula on Behalf of the 13 Nationwide Class or, Alternatively, by Plaintiffs Son and Khansari on behalf of the 14 California Class) 15 16 17 130. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 131. Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula brings this claim on 18 behalf of themselves and on behalf of the Members of the Nationwide Class. 19 Alternatively, Plaintiffs Son and Khansari bring this claim on behalf of themselves and 20 on behalf of the Members of the California Class. 21 132. California Business & Professions Code section 17500 states: “It is 22 unlawful for any . . . corporation . . . with intent directly or indirectly to dispose of real or 23 personal property . . . to induce the public to enter into any obligation relating thereto, to 24 make or disseminate or cause to be made or disseminated . . . from this state before the 25 public in any state, in any newspaper or other publication, or any advertising device, . . . 26 or in any other manner or means whatever, including over the Internet, any statement . . . 27 which is untrue or misleading, and which is known, or which by the exercise of 28 reasonable care should be known, to be untrue or misleading.” 57 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page94 64of of125 95 Page PageID ID#:193 #:318 1 133. Tesla caused to be made or disseminated throughout California and the 2 United States, through advertising, marketing and other publications, statements that 3 were untrue or misleading, and which were known, or which by the exercise of 4 reasonable care should have been known to Tesla, to be untrue and misleading to 5 consumers, including Plaintiffs and the other Class Members. 6 134. Tesla has violated section 17500 because the misrepresentations and 7 omissions regarding the safety, reliability, and functionality of its Model S and Model X 8 vehicles as set forth in this Complaint were material and likely to deceive a reasonable 9 consumer. 10 135. Plaintiffs and the other Class Members have suffered an injury in fact, 11 including the loss of money or property, as a result of Tesla’s unfair, unlawful, and/or 12 deceptive practices. In purchasing and/or leasing their Tesla vehicles, Plaintiffs and the 13 other Class Members relied on the misrepresentations and/or omissions of Tesla with 14 respect to the safety and reliability of such vehicles. Tesla’s representations turned out 15 not to be true because the vehicles can unexpectedly and dangerously accelerate out of 16 the driver’s control; the vehicle implements a full acceleration instruction into a fixed 17 object; and fails to use automatic emergency braking. Had Plaintiffs and the other Class 18 Members known this, they would not have purchased or leased their Class Vehicles 19 and/or paid as much for them. Accordingly, Plaintiffs and the other Class Members 20 overpaid for their Class Vehicles and did not receive the benefit of their bargain. 21 136. All of the wrongful conduct alleged herein occurred, and continues to occur, 22 in the conduct of Tesla’s business. Tesla’s wrongful conduct is part of a pattern or 23 generalized course of conduct that is still perpetuated and repeated, both in the state of 24 California and nationwide. 25 137. Plaintiffs, individually and on behalf of the other Class Members, requests 26 that this Court enter such orders or judgments as may be necessary to enjoin Tesla from 27 continuing their unfair, unlawful, and/or deceptive practices and to restore to Plaintiffs 28 58 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page95 65of of125 95 Page PageID ID#:194 #:319 1 and the other Class Members any money Tesla acquired by unfair competition, including 2 restitution and/or restitutionary disgorgement, and for such other relief set forth below. 3 FOURTH CAUSE OF ACTION 4 BREACH OF EXPRESS WARRANTY 5 (By Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula on Behalf of the 6 Nationwide Class or, Alternatively, by Plaintiffs Son and Khansari on behalf of the 7 California Class) 8 9 10 138. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 139. Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula brings this claim on 11 behalf of themselves and on behalf of the Members of the Nationwide Class. 12 Alternatively, Plaintiffs Son and Khansari bring this claim on behalf of themselves and 13 on behalf of the Members of the California Class. 14 15 16 140. Tesla is and was at all relevant times a merchant with respect to motor vehicles under California Commercial Code section 2104. 141. Tesla provided all purchasers and lessees of the Model S and Model X 17 vehicles with the express warranties described herein, which became part of the basis of 18 the bargain. Accordingly, Tesla’s warranties are express warranties under state law. 19 142. In the course of selling its vehicles, Tesla expressly warranted in writing that 20 its vehicles were covered by a Basic Warranty that provided: “the Basic Vehicle Limited 21 Warranty covers the repair or replacement necessary to correct defects in the materials or 22 workmanship of any parts manufactured or supplied by Tesla that occur under normal use 23 for a period of 4 years or 50,000 miles (80,000 km), whichever comes first.” 24 143. The parts affected by the defect, including the accelerator control system and 25 Automated Emergency Braking, were distributed by Tesla in the Model S and Model X 26 and are covered by the warranties Tesla provided to all purchasers and lessors of its 27 vehicles. 28 59 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page96 66of of125 95 Page PageID ID#:195 #:320 1 144. Tesla breached these warranties by selling and leasing Class Vehicles with 2 the defect, requiring repair or replacement within the applicable warranty periods, and 3 refusing to honor the warranties by providing free repairs or replacements during the 4 applicable warranty periods. 5 145. Plaintiffs notified Tesla of the breach within a reasonable time, and/or were 6 not required to do so because affording Tesla a reasonable opportunity to cure its breach 7 of written warranty would have been futile. Tesla also knew of the defect and yet have 8 chosen to conceal it and to fail to comply with their warranty obligations. 9 146. As a direct and proximate cause of Tesla’s breach, Plaintiffs and the other 10 Class Members bought or leased Class Vehicles they otherwise would not have, overpaid 11 for their vehicles, did not receive the benefit of their bargain, and their Class Vehicles 12 suffered a diminution in value. 13 147. Tesla’s attempt to disclaim or limit these express warranties vis-à-vis 14 consumers is unconscionable and unenforceable under the circumstances here. 15 Specifically, Tesla’s warranty limitation is unenforceable because they knowingly sold a 16 defective product without informing consumers about the defect. 17 148. The time limits contained in Tesla’s warranty period were also 18 unconscionable and inadequate to protect Plaintiffs and members of the Class. Among 19 other things, Plaintiffs and Class Members had no meaningful choice in determining 20 these time limitations the terms of which unreasonably favored Tesla. A gross disparity 21 in bargaining power existed between Tesla and the Class Members, and Tesla knew or 22 should have known that the Model S and Model X vehicles were defective at the time of 23 sale and would fail well before the expiration of their useful life. 24 149. Plaintiffs and the Class Members have complied with all obligations under 25 the warranty, or otherwise have been excused from performance of said obligations as a 26 result of Defendant’s conduct described herein. 27 28 60 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page97 67of of125 95 Page PageID ID#:196 #:321 1 FIFTH CAUSE OF ACTION 2 BREACH OF IMPLIED WARRANTY 3 (By Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula on Behalf of the 4 Nationwide Class or, Alternatively, by Plaintiffs Son and Khansari on behalf of the 5 California Class, and by Plaintiff K.M.S., individually) 6 7 8 9 150. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 151. Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula brings this claim on behalf of themselves and on behalf of the Members of the Nationwide Class. 10 Alternatively, Plaintiffs Son and Khansari bring this claim on behalf of themselves and 11 on behalf of the Members of the California Class. Plaintiff K.M.S brings this claims 12 individually. 13 152. Tesla was at all relevant times the manufacturer, distributor, warrantor, 14 and/or seller of the Model S and Model X. Tesla knew or had reason to know of the 15 specific use for which the Model S and Model X vehicles were purchased. 16 153. Tesla provided Plaintiffs and the other Class members with an implied 17 warranty that the Model S and Model X and any parts thereof are merchantable and fit for 18 the ordinary purposes for which they were sold. However, the Model S and Model X 19 vehicles are not fit for their ordinary purpose of providing reasonably reliable and safe 20 transportation at the time of sale or thereafter because, inter alia, there are defects in the 21 vehicle control systems that permit sudden unintended acceleration to occur; the vehicles 22 do not have an adequate fail-safe to protect against such SUA events; and the accelerator 23 control system was not adequately tested to prevent SUA events. 24 25 26 154. Therefore, the Model S and Model X vehicles are not fit for their particular purpose of providing safe and reliable transportation. 155. Tesla impliedly warranted that the Model S and Model X vehicles were of 27 merchantable quality and fit for such use. This implied warranty included, among other 28 things: (i) a warranty that the Model S and Model X vehicles manufactured, supplied, 61 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page98 68of of125 95 Page PageID ID#:197 #:322 1 distributed, and/or sold by Tesla were safe and reliable for providing transportation and 2 would not experience premature and catastrophic failure; and (ii) a warranty that the 3 Model S and Model X would be fit for its intended use while being operated. 4 156. Contrary to the applicable implied warranties, the Model S and Model X 5 vehicles at the time of sale and thereafter were not fit for their ordinary and intended 6 purpose of providing Plaintiffs and the other Class Members with reliable, durable, and 7 safe transportation. Instead, the Model S and Model X suffer from a defective design(s) 8 and/or manufacturing defect(s). 9 10 11 157. Tesla’s actions, as complained of herein, breached the implied warranty that the Class Vehicles were of merchantable quality and fit for such use. 158. After Plaintiffs received the injuries complained of herein, notice was given 12 by Plaintiffs to Defendant, by direct communication with Defendant Tesla as well as by 13 the filing of this lawsuit in the time and in the manner and in the form prescribed by law, 14 of the breach of said implied warranty. 15 16 17 18 159. As a legal and proximate result of the breach of said implied warranty, Plaintiffs sustained the damages herein set forth. 160. Plaintiffs and Class Members are, therefore, entitled to damages in an amount to be proven at the time of trial. 19 SIXTH CAUSE OF ACTION 20 BREACH OF WRITTEN WARRANTY UNDER THE MAGNUSON-MOSS 21 WARRANTY ACT 22 (15 U.S.C. § 2301, et seq.) 23 (By Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula on Behalf of the 24 Nationwide Class or, Alternatively, by Plaintiffs Son and Khansari on behalf of the 25 California Class) 26 27 161. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 28 62 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KES Document Document26 25 Filed Filed03/31/17 03/01/17 Page Page99 69of of125 95 Page PageID ID#:198 #:323 1 162. Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula brings this claim on 2 behalf of themselves and on behalf of the Members of the Nationwide Class. 3 Alternatively, Plaintiffs Son and Khansari bring this claim on behalf of themselves and 4 on behalf of the Members of the California Class. 5 6 7 8 9 10 163. Plaintiffs and the Class are “consumers” within the meaning of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301(3). 164. Defendant Tesla is a “supplier” and “warrantor” within the meaning of 15 U.S.C. §§ 2301(4)-(5). 165. The Model S and Model X vehicles are “consumer products” within the meaning of 15 U.S.C. § 2301(1). 11 166. Tesla’s 5 year/60,000 miles Basic Warranty and 10 year/100,000 miles 12 Powertrain Warranty are “written warranties” within the meaning of 15 U.S.C. § 2301(6). 13 167. Tesla breached these warranties as described in more detail above, but 14 generally by not repairing or adjusting the Defective Vehicles’ materials and 15 workmanship defects; providing Defective Vehicles not in merchantable condition and 16 which present an unreasonable risk of sudden unintended acceleration and not fit for the 17 ordinary purpose for which vehicles are used; providing Vehicles that were not fully 18 operational, safe, or reliable; and not curing defects and nonconformities once they were 19 identified. 20 168. Plaintiffs and Class Members have had sufficient direct dealings with either 21 the Tesla or its agents to establish privity of contract between Plaintiffs and the Class 22 members. However, privity is also not required because Plaintiffs’ and Class Members’ 23 Model S and Model X vehicles are dangerous instrumentalities due to the aforementioned 24 defects and nonconformities. 25 26 27 28 169. Plaintiffs and the other Class Members relied on the existence and length of the express warranties in deciding whether to purchase or lease the Class Vehicles. 170. Defendant Tesla’s breach of the express warranties has deprived Plaintiffs and the other Class Members of the benefit of their bargain. 63 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 70100 of 95 of 125 PagePage ID #:199 ID #:324 1 171. The amount in controversy of Plaintiffs’ individual claims meets or exceeds 2 the sum or value of $25.00. In addition, the amount in controversy meets or exceeds the 3 sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all 4 claims to be determined in this suit. 5 172. Tesla has been afforded a reasonable opportunity to cure its breach of the 6 written warranties and/or Plaintiffs and the other Class Members were not required to do 7 so because affording Tesla a reasonable opportunity to cure its breach of written 8 warranties would have been futile. Tesla was also on notice of the alleged defect from 9 the complaints and service requests it received from Class Members, as well as from its 10 own warranty claims, customer complaint data, and/or parts sales data. 11 173. As a direct and proximate cause of Tesla’s breach of the written warranties, 12 Plaintiffs and the other Class Members sustained damages and other losses in an amount 13 to be determined at trial. Defendant Tesla’s conduct damaged Plaintiffs and the other 14 Class Members, who are entitled to recover actual damages, consequential damages, 15 specific performance, diminution in value, costs, including statutory attorney fees and/or 16 other relief as deemed appropriate. 17 SEVENTH CAUSE OF ACTION 18 BREACH OF CONTRACT/COMMON LAW WARRANTY 19 (By Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula on Behalf of the 20 Nationwide Class or, Alternatively, by Plaintiffs Son and Khansari on behalf of the 21 California Class) 22 23 24 174. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 175. Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula bring this claim on 25 behalf of themselves and on behalf of the Members of the Nationwide Class. 26 Alternatively, Plaintiffs Son and Khansari bring this claim on behalf of themselves and 27 on behalf of the Members of the California Class. To the extent Tesla’s repair or adjust 28 commitment is deemed not to be a warranty under California’s Commercial Code, 64 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 71101 of 95 of 125 PagePage ID #:200 ID #:325 1 Plaintiffs plead in the alternative under common law warranty and contract law. Tesla 2 limited the remedies available to Plaintiffs and the Class Members to just repairs and 3 adjustments needed to correct defects in materials or workmanship of any part supplied 4 by Tesla and/or warranted the quality or nature of those services to Plaintiffs. 5 176. Tesla breached this warranty or contract obligation by failing to repair the 6 Model S and Model X evidencing a sudden unintended acceleration problem or to replace 7 them. 8 9 177. As a direct and proximate result of Tesla’s breach of contract of common law warranty, Plaintiffs and the Class have been damaged in an amount to be proven at 10 trial, which shall include, but is not limited to, all compensatory damages, incidental and 11 consequential damages, and other damages allowed by law. 12 EIGHTH CAUSE OF ACTION 13 VIOLATION OF THE SONG-BEVERLY CONSUMER WARRANTY ACT FOR 14 BREACH OF EXPRESS WARRANTIES 15 (Cal. Civ. Code § 1793.2(d) & 1791.2) 16 (By Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula on Behalf of the 17 Nationwide Class or, Alternatively, by Plaintiffs Son and Khansari on behalf of the 18 California Class) 19 20 21 178. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 179. Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula bring this claim on 22 behalf of themselves and on behalf of the Members of the Nationwide Class. 23 Alternatively, Plaintiffs Son and Khansari bring this claim on behalf of themselves and 24 on behalf of the Members of the California Class. 25 180. Plaintiffs and the Class Members who purchased or leased the Model S and 26 the Model X in California are “buyers” within the meaning of California Civil Code 27 section 1791. 28 65 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 72102 of 95 of 125 PagePage ID #:201 ID #:326 181. The Tesla vehicles are “consumer goods” within the meaning of California 1 2 Civil Code section 1791(a). 182. Tesla is a “manufacturer” of the Model S and Model X within the meaning 3 4 of California Civil Code section 1791(j). 5 6 183. Plaintiffs and the Class bought/leased new motor vehicles manufactured by Tesla. 7 184. Tesla made express warranties to Plaintiffs and the Class within the meaning 8 of California Civil Code sections 1791.2 and 1793.2, both in its warranty manual and 9 advertising, as described above. 10 185. Tesla’s Model S and Model X had and continue to have defects that were 11 and continue to be covered by Tesla’s express warranties and these defects substantially 12 impair the use, value, and safety of Tesla’s vehicles to reasonable consumers like 13 Plaintiffs and the Class. 14 186. Plaintiffs and the Class delivered their vehicles to Tesla or its authorized 15 repair facility for repair of the defects and/or notified Tesla in writing of the need for 16 repair of the defects because they reasonably could not deliver the vehicles to Tesla or its 17 authorized repair facility due to fear of unintended acceleration. 18 187. Tesla and its authorized repair facilities failed and continue to fail to repair 19 the vehicles to match Tesla’s written warranties after a reasonable number of 20 opportunities to do so. 21 188. Plaintiffs and the Class Members gave Tesla or its authorized repair facilities 22 at least two opportunities to fix the defects unless only one repair attempt was possible 23 because the vehicle was later destroyed or because Tesla or its authorized repair facility 24 refused to attempt the repair. 25 26 189. Tesla did not promptly replace or buy back the vehicles of Plaintiffs and the Class. 27 190. As a result of Tesla’s breach of its express warranties, Plaintiffs and the 28 Class received goods whose dangerous condition substantially impairs their value to 66 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 73103 of 95 of 125 PagePage ID #:202 ID #:327 1 Plaintiffs and the Class. Plaintiffs and the Class have been damaged as a result of the 2 products’ malfunctioning, and the nonuse of their vehicles. 3 191. Pursuant to California Civil Code sections 1793.2 & 1794, Plaintiffs and the 4 Class are entitled to damages and other legal and equitable relief including, at their 5 election, the purchase price of their vehicles, or the overpayment or diminution in value 6 of their vehicles. 7 NINTH CAUSE OF ACTION 8 VIOLATION OF THE SONG-BEVERLY ACT – BREACH OF IMPLIED 9 WARRANTY 10 (Cal. Civ. Code §§ 1792, 1791.1, et seq.) 11 (By Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula on Behalf of the 12 Nationwide Class or, Alternatively, by Plaintiffs Son and Khansari on behalf of the 13 California Class) 14 15 16 192. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 193. Plaintiffs Son, Khansari, Jarrahi, Tomko, and Shastrula bring this claim on 17 behalf of themselves and on behalf of the Members of the Nationwide Class. 18 Alternatively, Plaintiffs Son and Khansari bring this claim on behalf of themselves and 19 on behalf of the Members of the California Class. 20 194. At all relevant times hereto, Tesla was the manufacturer, distributor, 21 warrantor, and/or seller of the Model S and Model X. Tesla knew or should have known 22 of the specific use for which the Model S and Model X vehicles were purchased. 23 195. Tesla provided Plaintiffs and the Class Members with an implied warranty 24 that the Model S and Model X vehicles, and any parts thereof, are merchantable and fit 25 for the ordinary purposes for which they were sold. However, the Model S and Model X 26 vehicles are not fit for their ordinary purpose of providing reasonably reliable and safe 27 transportation at the time of sale or thereafter because, inter alia, there are defects in the 28 vehicle control systems that permit sudden unintended acceleration to occur; the vehicles 67 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 74104 of 95 of 125 PagePage ID #:203 ID #:328 1 do not have an adequate fail-safe to protect against such SUA events; and the accelerator 2 control system was not adequately tested. 3 4 196. The Model S and Model X vehicles are not fit for the purpose of providing safe and reliable transportation because of the defect. 5 197. Tesla impliedly warranted that the Model S and Model X vehicles were of 6 merchantable quality and fit for such use. This implied warranty included, among other 7 things: (i) a warranty that the Model S and Model X vehicles manufactured, supplied, 8 distributed, and/or sold by Tesla were safe and reliable for providing transportation and 9 would not experience premature and catastrophic failure; and (ii) a warranty that the 10 11 Model S and Model X would be fit for their intended use while being operated. 198. Contrary to the applicable implied warranties, the Model S and Model X 12 vehicles at the time of sale and thereafter were not fit for their ordinary and intended 13 purpose of providing Plaintiffs and the other Class Members with reliable, durable, and 14 safe transportation. Instead, the Model S and Model X suffer from a defective design(s) 15 and/or manufacturing defect(s). Tesla’s actions, as complained of herein, breached the 16 implied warranty that the Class Vehicles were of merchantable quality and fit for such 17 use in violation of California Civil Code sections 1792 and 1791.1. 18 TENTH CAUSE OF ACTION 19 STRICT PRODUCT LIABILITY 20 (By Plaintiffs Son and K.M.S., individually) 21 22 23 199. Plaintiffs incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 200. Plaintiffs Son and K.M.S., individually, are informed and believe and based 24 thereon allege that Tesla designed, manufactured, researched, tested, assembled, 25 installed, marketed, advertised, distributed, and sold a certain 2016 Tesla Model X, 26 bearing Vehicle Identification Number 5YJXCBE27GF009026 (hereinafter referred to as 27 the “subject vehicle”). 28 68 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 75105 of 95 of 125 PagePage ID #:204 ID #:329 1 2 3 201. At all times relevant hereto, Tesla knew that the subject vehicle would be operated and inhabited by consumers without inspection for defects. 202. At the time of the collision described above, the subject vehicle was being 4 used in a manner and fashion that was foreseeable by Tesla, and in a manner in which it 5 was intended to be used. 6 203. Tesla designed, engineered, developed, manufactured, fabricated, 7 assembled, equipped, tested or failed to test, inspected or failed to inspect, repaired, 8 retrofitted or failed to retrofit, failed to recall, labeled, advertised, promoted, marketed, 9 supplied, distributed, wholesaled, and sold the subject vehicle and its component parts 10 and constituents, which was intended by Tesla to be used for the purpose of use as a 11 passenger vehicle, and other related activities. 12 204. The subject vehicle was unsafe for its intended use by reason of defects in its 13 manufacture, design, testing, components and constituents, so that it would not safely 14 serve its purpose, but would instead expose the users of said product, and others, to 15 serious injuries because of the failure of Tesla to properly guard and protect the users of 16 the subject vehicle, and others, from the defective design of said product. 17 205. Tesla designed the subject vehicle defectively, causing it to fail to perform 18 as safely as an ordinary consumer would expect when used in an intended or reasonably 19 foreseeable manner. 20 21 206. The risks inherent in the design of the subject vehicle outweigh significantly any benefits of such design. 22 207. Plaintiffs were not aware of the aforementioned defects. 23 208. As a legal and proximate result of the aforementioned defects of the subject 24 25 26 vehicle, Plaintiffs Son and K.M.S. sustained the injuries and damages set forth herein. 209. Plaintiffs Son and K.M.S. are, therefore, entitled to damages in an amount to be proven at the time of trial. 27 28 69 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 76106 of 95 of 125 PagePage ID #:205 ID #:330 1 ELEVENTH CAUSE OF ACTION 2 NEGLIGENCE 3 (By Plaintiffs Son and K.M.S., individually) 4 5 6 210. Plaintiffs incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein 211. At all times herein mentioned, Tesla designed, manufactured, assembled, 7 analyzed, recommended, merchandised, advertised, promoted, distributed, supplied, and 8 sold to distributors and retailers for sale, the subject vehicle and/or its component parts. 9 212. Tesla owed Plaintiffs Son and K.M.S. a duty to exercise reasonable care in 10 the design, testing, manufacture, assembly, sale, distribution and servicing of the subject 11 vehicle, including a duty to ensure that the subject vehicle did not cause Plaintiffs Son 12 and K.M.S., other users, bystanders, or the public, unnecessary injuries or deaths. 13 213. Tesla knew or should have known that the subject vehicle is defectively 14 designed and inherently dangerous and has a propensity to suddenly accelerate, lose 15 control, and cause injuries. 16 214. Tesla knew or should have known that the subject vehicle was defectively 17 designed and/or manufactured and was therefore prone to failure under normal driving 18 conditions, potentially causing injuries and/or deaths. 19 20 21 215. Tesla failed to exercise ordinary care and breached their duties by, among other things: a. Failure to use due care in the manufacture, distribution, design, sale, 22 testing, and servicing of the subject vehicle and its component parts in 23 order to avoid the aforementioned risks to individuals; 24 b. 25 26 Failure to provide adequate warning of the sudden acceleration problem and its propensity to cause and/or contribute to an accident; c. Failure to incorporate within the vehicle and its design reasonable 27 safeguards and protections against sudden acceleration and the 28 consequences thereof; 70 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 77107 of 95 of 125 PagePage ID #:206 ID #:331 1 d. 2 3 Failure to make timely correction to the design of the subject vehicle to correct the sudden acceleration problems; e. Failure to adequately identify and mitigate the hazards associated with 4 sudden unintended acceleration in accordance with good engineering 5 practices and other ways; and, 6 7 8 9 10 f. Were otherwise careless or negligent. 216. The aforementioned negligent acts and omissions of Tesla were the direct and proximate cause of Plaintiffs’ damages. 217. Plaintiffs Son and K.M.S. are, therefore, entitled to damages in an amount to be proven at trial, together with interest thereon and costs. 11 TWELFTH CAUSE OF ACTION 12 FAILURE TO WARN 13 (By Plaintiffs Son and K.M.S., individually) 14 15 16 17 218. Plaintiffs incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein 219. Tesla knew that the subject vehicle, and its component parts, would be purchased and used without inspection for defects in the design of the vehicle. 18 220. The subject vehicle was defective when it left the Defendant’s control. 19 221. Tesla knew or should have known of the substantial dangers involved in the 20 reasonably foreseeable use of these vehicles, whose defective design, manufacturing, and 21 lack of sufficient warnings caused them to have an unreasonably dangerous propensity to 22 suffer from sudden unintended acceleration and thereby cause injuries. 23 24 222. Tesla failed to adequately warn of the substantial dangers known or knowable at the time of the defective vehicles’ design, manufacture, and distribution. 25 223. Tesla failed to provide adequate warnings, instructions, guidelines or 26 admonitions to members of the consuming public, including Plaintiffs Son and K.M.S., 27 of the defects, which Tesla knew, or in the exercise of reasonable care should have 28 known, to have existed in the subject vehicle, and its component parts. 71 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 78108 of 95 of 125 PagePage ID #:207 ID #:332 1 224. Tesla knew that these substantial dangers are not readily recognizable to an 2 ordinary consumer and that consumers would purchase and use these products without 3 inspection. 4 225. At the time of Plaintiffs Son’s and K.M.S.’s injuries, the subject vehicle was 5 being used in the manner intended by Tesla, and in a manner that was reasonably 6 foreseeable by Tesla as involving substantial danger that was not readily apparent to its 7 users. 8 9 10 226. Plaintiffs Son’s and K.M.S.’s damages were the legal and proximate result of the actions and inactions of Tesla, who owed a duty to Plaintiffs in designing, manufacturing, warning about, and distributing the subject vehicle. 11 THIRTEENTH CAUSE OF ACTION 12 VIOLATION OF GEORGIA’S UNIFORM DECEPTIVE TRADE 13 PRACTICES ACT 14 (Ga. Code Ann. § 10-1-370, et seq.) 15 (By Plaintiff Shastrula on Behalf of the Georgia Class) 16 17 18 19 20 227. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 228. Plaintiff Shastrula brings this claim on behalf of himself and on behalf of the Members of the Georgia Class. 229. The conduct of Defendant as set forth herein constitutes unfair or deceptive 21 acts or practices, including, but not limited to Defendant’s manufacture and sale of 22 vehicles with a sudden acceleration defect that lack other effective fail-safe mechanisms, 23 which Defendant failed to adequately investigate, disclose and remedy, and its 24 misrepresentations and omissions regarding the safety and reliability of its vehicles. 25 26 230. Defendant’s actions as set forth above occurred in the conduct of trade or commerce. 27 231. Defendant’s actions impact the public interest because Plaintiff Shastrula 28 was injured in exactly the same way as thousands of others purchasing and/or leasing 72 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 79109 of 95 of 125 PagePage ID #:208 ID #:333 1 Tesla vehicles as a result of Tesla’s generalized course of deception. All of the wrongful 2 conduct alleged herein occurred, and continues to occur, in the conduct of Defendant’s 3 business. 4 232. Plaintiff Shastrula and the Georgia Class were injured as a result of 5 Defendant’s conduct. Plaintiff Shastrula and the Class Members overpaid for their 6 Defective Vehicles and did not receive the benefit of their bargain, and their vehicles 7 have suffered a diminution in value. 8 9 10 11 12 233. Defendant’s conduct proximately caused the injuries to Plaintiff Shastrula and the Class Members. 234. Defendant is liable to Plaintiff Shastrula and the Class Members for damages in amounts to be proven at trial, including attorneys’ fees, costs, and treble damages. 235. Pursuant to Georgia Code Annotated section 10-1-370, Plaintiff Shastrula 13 will serve the Georgia Attorney General with a copy of this complaint as Plaintiffs seek 14 injunctive relief. 15 FOURTEENTH CAUSE OF ACTION 16 VIOLATION OF GEORGIA’S FAIR BUSINESS PRACTICES ACT 17 (Ga. Code Ann. § 10-1-390, et seq.) 18 (By Plaintiff Shastrula on Behalf of the Georgia Class) 19 20 21 22 236. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 237. Plaintiff Shastrula brings this claim on behalf of himself and on behalf of the Members of the Georgia Class. 23 238. Defendant’s conduct as set forth herein constitutes unfair or deceptive acts 24 or practices, including, but not limited to, Defendant’s manufacture and sale of vehicles 25 with a sudden acceleration defect that lack effective fail-safe mechanisms, which 26 Defendant failed to adequately investigate, disclose and remedy, and its 27 misrepresentations and omissions regarding the safety and reliability of its vehicles. 28 73 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 80110 of 95 of 125 PagePage ID #:209 ID #:334 239. Defendant’s actions as set forth above occurred in the conduct of trade or 1 2 commerce. 240. Defendant’s actions impact the public interest because Plaintiff Shastrula 3 4 and the Class Members were injured in exactly the same way as thousands of others 5 purchasing and/or leasing Tesla vehicles as a result of Defendant’s generalized course of 6 deception. All of the wrongful conduct alleged herein occurred, and continues to occur, 7 in the conduct of Defendant’s business. 241. Plaintiff Shastrula and the Class were injured as a result of Defendant’s 8 9 conduct. Plaintiff Shastrula and the Class overpaid for their Defective Vehicles and did 10 not receive the benefit of their bargain, and their vehicles have suffered a diminution in 11 value. 12 13 242. Defendant’s conduct proximately caused the injuries to Plaintiff Shastrula and Class Members. 14 243. Defendant is liable to Plaintiff Shastrula and the Class for damages in 15 amounts to be proven at trial, including attorneys’ fees, costs, and treble damages. 16 244. Pursuant to Georgia Code Annotated section 10-1-390, Plaintiff Shastrula 17 will serve the Georgia Attorney General with a copy of this complaint as Plaintiff 18 Shastrula seeks injunctive relief. 19 FIFTEENTH CAUSE OF ACTION 20 BREACH OF EXPRESS WARRANTY 21 (Ga. Code Ann. § 11-2-313) 22 (By Plaintiff Shastrula on Behalf of the Georgia Class) 23 24 25 26 27 28 245. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 246. Plaintiff Shastrula brings this claim on behalf of himself and on behalf of the Members of the Georgia Class. 247. Defendant is and was at all relevant times a merchant with respect to motor vehicles. 74 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 81111 of 95 of 125 PagePage ID #:210 ID #:335 1 2 3 248. In the course of selling its vehicles, Defendant expressly warranted in writing that the Vehicles were covered by a Basic Warranty. 249. Defendant breached the express warranty to repair and adjust to correct 4 defects in materials and workmanship of any part supplied by Defendant. Defendant has 5 not repaired or adjusted, and has been unable to repair or adjust, the Vehicles’ materials 6 and workmanship defects. 7 8 9 250. In addition to this Basic Warranty, Defendant expressly warranted several attributes, characteristics and qualities, as set forth above. 251. These warranties are only a sampling of the numerous warranties that 10 Defendant made relating to safety, reliability and operation, which are more fully 11 outlined above. Generally these express warranties promise heightened, superior, and 12 state-of-the-art safety, reliability, and performance standards. These warranties were 13 made, inter alia, in advertisements, in Defendant’s “e brochures,” and in uniform 14 statements provided by Defendant to be made by salespeople. These affirmations and 15 promises were part of the basis of the bargain between the parties. 16 252. These additional warranties were also breached because the Defective 17 Vehicles were not fully operational, safe, or reliable, nor did they comply with the 18 warranties expressly made to purchasers or lessees. Defendant did not provide at the 19 time of sale, and has not provided since then, vehicles conforming to these express 20 warranties. 21 253. Furthermore, the limited warranty of repair and/or adjustments to defective 22 parts, fails in its essential purpose because the contractual remedy is insufficient to make 23 the Plaintiff Shastrula and the Class whole and because the Defendant has failed and/or 24 has refused to adequately provide the promised remedies within a reasonable time. 25 254. Accordingly, recovery by Plaintiff Shastrula and the Class is not limited to 26 the limited warranty of repair or adjustments to parts defective in materials or 27 workmanship, and Plaintiff Shastrula and the Class Members seek all remedies as 28 allowed by law. 75 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 82112 of 95 of 125 PagePage ID #:211 ID #:336 1 255. Also, as alleged in more detail herein, at the time that Defendant warranted 2 and sold the vehicles it knew that the vehicles did not conform to the warranties and were 3 inherently defective, and Defendant wrongfully and fraudulently misrepresented and/or 4 concealed material facts regarding its vehicles. Plaintiff Shastrula and the Class were 5 therefore induced to purchase the vehicles under false and/or fraudulent pretenses. 6 256. Moreover, many of the damages flowing from the Defective Vehicles cannot 7 be resolved through the limited remedy of “replacement or adjustments,” as those 8 incidental and consequential damages have already been suffered due to Defendant’s 9 fraudulent conduct as alleged herein, and due to their failure and/or continued failure to 10 provide such limited remedy within a reasonable time, and any limitation on Plaintiff 11 Shastrula’s and the Class’s remedies would be insufficient to make Plaintiff and the Class 12 whole. 13 257. Finally, due to the Defendant’s breach of warranties as set forth herein, 14 Plaintiff Shastrula and the Class assert as an additional and/or alternative remedy, as set 15 forth in Georgia Code Annotated section 11-2-608, for a revocation of acceptance of the 16 goods, and for a return to Plaintiff Shastrula and to the Class of the purchase price of all 17 vehicles currently owned. 18 258. Defendant was provided notice of these issues by the instant complaint, and 19 by numerous complaints filed with the NHTSA, as well as individual letters and 20 communications sent by Plaintiffs and the Class. 259. As a direct and proximate result of Defendant’s breach of express 21 22 warranties, Plaintiff Shastrula and the Class have been damaged in an amount to be 23 determined at trial. 24 // 25 // 26 // 27 // 28 // 76 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 83113 of 95 of 125 PagePage ID #:212 ID #:337 1 SIXTEENTH CAUSE OF ACTION 2 BREACH OF THE IMPLIED WARRANTY OF MERCHANTABILITY 3 (Ga. Code Ann. § 11-2-314) 4 (By Plaintiff Shastrula on Behalf of the Georgia Class) 5 6 7 8 9 10 260. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 261. Plaintiff Shastrula brings this claim on behalf of himself and on behalf of the Members of the Georgia Class. 262. Defendant is and was at all relevant times a merchant with respect to motor vehicles. 11 263. A warranty that the Defective Vehicles were in merchantable condition is 12 implied by law in the instant transactions, pursuant to Georgia Code Annotated section 13 11-2-314. 14 264. These vehicles, when sold and at all times thereafter, were not in 15 merchantable condition and are not fit for the ordinary purpose for which cars are used. 16 Specifically, the Defective Vehicles are inherently defective in that there are defects in 17 the vehicle control systems that permit sudden unintended acceleration to occur; the 18 Defective Vehicles do not have an adequate fail-safe to protect against such SUA events; 19 and the accelerator control mechanism and electronics were adequately tested. 20 265. Defendant was provided notice of these issues by the instant complaint, and 21 by numerous complaints filed with the NHTSA, as well as individual letters and 22 communications sent by Plaintiffs and the Class. 23 266. Plaintiff Shastrula and the Class have had sufficient dealings with either 24 Defendant to establish privity of contract between Plaintiffs and the Class. 25 Notwithstanding this privity is also not required because Plaintiffs’ and Class members’ 26 Tesla vehicles are dangerous instrumentalities due to the aforementioned defects and 27 nonconformities. 28 77 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 84114 of 95 of 125 PagePage ID #:213 ID #:338 267. As a direct and proximate result of Defendant’s breach of the warranties of 1 2 merchantability, Plaintiff Shastrula and the Class have been damaged in an amount to be 3 proven at trial. 4 SEVENTEENTH CAUSE OF ACTION 5 BREACH OF CONTRACT/COMMON LAW WARRANTY 6 (By Plaintiff Shastrula on Behalf of the Georgia Class) 7 8 268. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 9 10 269. Plaintiff Shastrula brings this claim on behalf of himself and on behalf of the Members of the Georgia Class. 270. To the extent Defendant’s repair or adjust commitment is deemed not to be a 11 12 warranty under Georgia’s Commercial Code, Plaintiff Shastrula pleads in the alternative 13 under common law warranty and contract law. Defendant limited the remedies available 14 to Plaintiff Shastrula and the Class to just repairs and adjustments needed to correct 15 defects in materials or workmanship of any part supplied by Defendant, and/or warranted 16 the quality or nature of those services to Plaintiff Shastrula and the Class Members. 17 271. Defendant breached this warranty or contract obligation by failing to repair 18 the Defective Vehicles evidencing a sudden unintended acceleration problem or to 19 replace them. 20 272. As a direct and proximate result of Defendant’s breach of contract or 21 common law warranty, Plaintiff Shastrula and the Georgia Class have been damaged in 22 an amount to be proven at trial, which shall include, but is not limited to, all 23 compensatory damages, incidental and consequential damages, and other damages 24 allowed by law. 25 // 26 // 27 // 28 // 78 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 85115 of 95 of 125 PagePage ID #:214 ID #:339 1 EIGHTEENTH CAUSE OF ACTION 2 UNJUST ENRICHMENT 3 (By Plaintiff Shastrula on Behalf of the Georgia Class) 4 5 6 7 8 9 273. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 274. Plaintiff Shastrula brings this claim on behalf of himself and on behalf of the Members of the Georgia Class. 275. Defendant had knowledge of the safety defects in its vehicles, which it failed to disclose to Plaintiff Shastrula and the Class. 10 276. As a result of Defendant’s wrongful and fraudulent acts and omissions, as 11 set forth above, pertaining to the design defect of their vehicles and the concealment of 12 the defect, Defendant charged a higher price for their vehicles than the vehicles’ true 13 value and Defendant obtained monies which rightfully belong to Plaintiff Shastrula and 14 the Georgia Class Members. 15 277. Defendant appreciated, accepted and retained the non-gratuitous benefits 16 conferred by Plaintiff Shastrula and other Class members, who without knowledge of the 17 safety defects paid a higher price for vehicles which actually had lower values. It would 18 be inequitable and unjust for Defendant to retain these wrongfully obtained profits. 19 278. Plaintiff Shastrula and the Georgia Class Members, therefore, are entitled to 20 restitution and seek an order establishing Defendant as constructive trustees of the profits 21 unjustly obtained, plus interest. 22 NINETEENTH CAUSE OF ACTION 23 BREACH OF THE IMPLIED WARRANTY OF MERCHANTABILITY 24 (N.C. Gen. Stat. § 25-2-314) 25 (By Plaintiff Jarrahi on Behalf of the North Carolina Class) 26 27 279. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 28 79 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 86116 of 95 of 125 PagePage ID #:215 ID #:340 1 2 3 4 5 280. Plaintiff Jarrahi brings this claim on behalf of himself and on behalf of the Members of the North Carolina Class. 281. Defendant is and was at all relevant times a merchant with respect to motor vehicles under North Carolina General Statute section 25-2-314. 282. A warranty that the Defective Vehicles were in merchantable condition was 6 implied by law in the instant transaction, pursuant to North Carolina General Statute 7 section 25-2-314. 8 283. The Model S and Model X vehicles, when sold and at all times thereafter, 9 were not in merchantable condition and are not fit for the ordinary purpose for which 10 vehicles are used. Specifically, the Defective Vehicles are inherently defective in that 11 there are defects in the vehicle control systems that permit sudden unintended 12 acceleration to occur; the Defective Vehicles do not have an adequate fail-safe to protect 13 against such SUA events; and the accelerator control mechanisms and electronics were 14 not adequately tested. 15 284. Defendant was provided notice of these issues by the instant complaint, and 16 by numerous complaints filed with the NHTSA, as well as individual letters and 17 communications sent by Plaintiffs and the Class. 18 285. As a direct and proximate result of Defendant’s breach of the warranties of 19 merchantability, Plaintiff Jarrahi and the Class have been damaged in an amount to be 20 proven at trial. 21 TWENTIETH CAUSE OF ACTION 22 BREACH OF CONTRACT/COMMON LAW WARRANTY 23 (Based on North Carolina Law) 24 (By Plaintiff Jarrahi on Behalf of the North Carolina Class) 25 26 27 28 286. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 287. Plaintiff Jarrahi brings this claim on behalf of himself and on behalf of the Members of the North Carolina Class. 80 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 87117 of 95 of 125 PagePage ID #:216 ID #:341 1 288. To the extent Defendant’s repair or adjust commitment is deemed not to be a 2 warranty under North Carolina’s Commercial Code, Plaintiff Jarrahi pleads in the 3 alternative under common law warranty and contract law. Defendant limited the 4 remedies available to Plaintiff and the Class to just repairs and adjustments needed to 5 correct defects in materials or workmanship of any part supplied by Defendant, and/or 6 warranted the quality or nature of those services to Plaintiff Jarrah and the Class. 7 289. Defendant breached this warranty or contract obligation by failing to repair 8 the Defective Vehicles evidencing a sudden unintended acceleration problem or to 9 replace them. 10 290. As a direct and proximate result of Defendant’s breach of contract or 11 common law warranty, Plaintiff Jarrahi and the North Carolina Class have been damaged 12 in an amount to be proven at trial, which shall include, but is not limited to, all 13 compensatory damages, incidental and consequential damages, and other damages 14 allowed by law. 15 TWENTY-FIRST CAUSE OF ACTION 16 UNJUST ENRICHMENT 17 (Based on North Carolina Law) 18 (By Plaintiff Jarrahi on Behalf of the North Carolina Class) 19 20 21 22 23 291. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 292. Plaintiff Jarrahi brings this claim on behalf of himself and on behalf of the Members of the North Carolina Class. 293. As a result of its wrongful and fraudulent acts and omissions, as set forth 24 above, pertaining to the design defect of the Model S and Model X vehicles and the 25 concealment of the defect, Defendant charged a higher price for its vehicles than the 26 vehicles’ true value and Defendant obtained monies which rightfully belong to Plaintiff 27 Jarrahi and Class Members. 28 81 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 88118 of 95 of 125 PagePage ID #:217 ID #:342 1 294. Defendant knowingly enjoyed the benefit of increased financial gains, to the 2 detriment of Plaintiff Jarrahi and the Class Members, who paid a higher price for vehicles 3 which actually had lower values. It would be inequitable and unjust for Defendant to 4 retain these wrongfully obtained profits. 5 295. Plaintiff Jarrahi and the North Carolina Class Members, therefore, are 6 entitled to restitution and seek an order establishing Defendant as constructive trustees of 7 the profits unjustly obtained, plus interest. 8 TWENTY-SECOND CAUSE OF ACTION 9 VIOLATION OF OHIO CONSUMER SALES PRACTICES ACT 10 (Ohio Rev. Code Ann. § 1345.01, et seq.) 11 (By Plaintiff Tomko on Behalf of the Ohio Class) 12 13 14 15 16 296. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 297. Plaintiff Tomko brings this claim on behalf of himself and on behalf of the Members of the Ohio Class. 298. The Ohio Consumer Protection Act, Ohio Revised Code section 1345.02, 17 prohibits unfair or deceptive acts or practices in connection with a consumer transaction. 18 Specifically, the Act prohibits suppliers from representing that goods have characteristics 19 or uses or benefits which they do not have. The Act also prohibits suppliers from 20 representing that their goods are of a particular quality or grade they are not. 21 22 23 24 25 299. Defendant is a “supplier” as that term is defined in the Ohio Consumer Protection Act, Ohio Rev. Code § 1345.01(c). 300. Plaintiff Tomko is a “consumer” as that term is defined in the Ohio Consumer Protection Act, Ohio Rev. Code § 1345.01(d). 301. The conduct of Defendant alleged above constitutes unfair and/or deceptive 26 consumer sales practices in violation of Ohio Revised Code section 1345.02 because 27 Defendant represented through advertising and other marketing communications that the 28 82 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 89119 of 95 of 125 PagePage ID #:218 ID #:343 1 vehicles were new and free from defects and could be driven safely in normal operation. 2 Instead, the vehicles were not of the standard, quality or grade of new vehicles. 3 4 5 6 7 302. Defendant’s conduct caused Plaintiff Tomko’s and the Class Members’ damages as alleged. 303. Plaintiff Tomko specifically does not allege herein a claim for violation of Ohio Revised Code section 1345.72. 304. As a result of the foregoing wrongful conduct of Defendant, Plaintiff Tomko 8 and the Ohio Class Members have been damaged in an amount to be proven at trial, 9 including, but not limited to, actual and statutory damages, treble damages, court costs 10 and reasonable attorney’s fees, pursuant to Ohio Revised Code section 1345.09, et seq. 11 TWENTY-THIRD CAUSE OF ACTION 12 VIOLATION OF OHIO DECEPTIVE TRADE PRACTICES ACT 13 (Ohio Rev. Code Ann. § 4165.01, et seq.) 14 (By Plaintiff Tomko on Behalf of the Ohio Class) 15 16 17 18 19 305. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 306. Plaintiff Tomko brings this claim on behalf of himself and on behalf of the Members of the Ohio Class. 307. Ohio Revised Code section 4165.02(A) provides that a “person engages in a 20 deceptive trade practice when, in the course of the person’s business, vocation, or 21 occupation,” the person does any of the following: “(2) Causes likelihood of confusion or 22 misunderstanding as to the source, sponsorship, approval, or certification of goods or 23 services; . . . (7) Represents that goods or services have sponsorship, approval, 24 characteristics, ingredients, uses, benefits, or quantities that they do not have or that a 25 person has a sponsorship, approval, status, affiliation, or connection that the person does 26 not have; . . . (9) Represents that goods or services are of a particular standard, quality, 27 or grade, or that goods are of a particular style or model, if they are of another; . . . [and] 28 (11) Advertises goods or services with intent not to sell them as advertised.” 83 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 90120 of 95 of 125 PagePage ID #:219 ID #:344 1 2 3 308. Defendant is a “person” within the meaning of Ohio Revised Code section 4165.01(d). 309. The vehicles sold to Plaintiff Tomko and the Ohio Class Members were not 4 of the particular sponsorship, approval, characteristics, ingredients, uses, benefits, or 5 qualities represented by Defendant. 6 7 8 9 310. The vehicles sold to Plaintiff Tomko and the Ohio Class Members were not of the particular standard, quality, and/or grade represented by Defendant. 311. Defendant made false or misleading statements of fact concerning the vehicles Plaintiffs purchased – i.e., that such vehicles were suitable for ordinary use – 10 when Defendant, in fact, knew that they were defective and not suitable for ordinary use. 11 312. These statements materially influenced Plaintiff Tomko’s decision to 12 purchase his Model S, in that Defendant’s statements caused Plaintiff Tomko and the 13 Class Members to purchase vehicles that they otherwise would not have had they known 14 of the dangerous defect. 15 16 17 313. Defendant’s deceptive trade practices caused Plaintiff Tomko and the Ohio Class Members damages as alleged. 314. As a result of the foregoing wrongful conduct of Defendant, Plaintiffs have 18 been damaged in an amount to be proven at trial, including, but not limited to, actual, 19 equitable relief and reasonable attorneys’ fees. 20 TWENTY-FOURTH CAUSE OF ACTION 21 BREACH OF EXPRESS WARRANTY 22 (Ohio Rev. Code Ann. § 1302.26, et seq. (U.C.C. § 2-313)) 23 (By Plaintiff Tomko on Behalf of the Ohio Class) 24 25 26 27 315. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 316. Plaintiff Tomko brings this claim on behalf of himself and on behalf of the Members of the Ohio Class. 28 84 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 91121 of 95 of 125 PagePage ID #:220 ID #:345 1 317. Defendant expressly warranted – through statements and advertisements 2 described above – that its vehicles were of high quality, and, at a minimum, would 3 actually work properly and safely. 4 318. Defendant breached this warranty by knowingly selling to Plaintiff Tomko 5 and the Ohio Class Members vehicles with dangerous defects, and which were not of 6 high quality. 7 319. Plaintiff Tomko and the Ohio Class Members have been damaged as a direct 8 and proximate result of the breaches by Defendant in that the Defective Vehicles 9 purchased or leased by Plaintiff Tomko and the Ohio Class Members were and are worth 10 far less than what Plaintiff Tomko and the Ohio Class Members paid to purchase, which 11 was reasonably foreseeable to Defendant. 12 TWENTY-FIFTH CAUSE OF ACTION 13 OHIO BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY - 14 STRICT LIABILITY 15 (Ohio Rev. Code Ann. § 1302.27 (U.C.C. § 2-314)) 16 (By Plaintiff Tomko on Behalf of the Ohio Class) 17 18 19 20 21 320. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 321. Plaintiff Tomko brings this claim on behalf of himself and on behalf of the Members of the Ohio Class. 322. Defendant impliedly warranted that its vehicles were of good and 22 merchantable quality and fit, and safe for their ordinary intended use – transporting the 23 driver and passengers in reasonable safety during normal operation, and without unduly 24 endangering them or members of the public. 25 323. As described above, there were dangerous defects in the vehicles 26 manufactured, distributed, and/or sold by Defendant, which Plaintiff Tomko and the Ohio 27 Class Members purchased or leased, including, but not limited to, defects that caused the 28 85 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 92122 of 95 of 125 PagePage ID #:221 ID #:346 1 vehicles to suddenly and unintentionally accelerate, and the lack of safety systems which 2 would prevent such acceleration. 3 324. These dangerous defects existed at the time the vehicles left Defendant’s 4 manufacturing facilities and at the time they were sold or leased to Plaintiff Tomko and 5 the Ohio Class Members. 6 7 325. These dangerous defects were the direct and proximate cause of damages to Plaintiff Tomko and the Ohio Class Members. 8 TWENTY-SIXTH CAUSE OF ACTION 9 OHIO NEGLIGENT DESIGN, ENGINEERING & MANUFACTURE 10 (Based on Ohio Law) 11 (By Plaintiff Tomko on Behalf of the Ohio Class) 12 13 14 15 326. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 327. Plaintiff Tomko brings this claim on behalf of himself and on behalf of the Members of the Ohio Class. 16 328. Defendant is a manufacturer and supplier of automobiles. Defendant owed 17 Plaintiff Tomko and the Ohio Class Members a non-delegable duty to exercise ordinary 18 and reasonable care to properly design, engineer, and manufacture the vehicles against 19 foreseeable hazards and malfunctions including uncontrollable acceleration. 20 329. Defendant owed Plaintiff Tomko and the Ohio Class Members a non- 21 delegable duty to exercise ordinary and reasonable care in designing, engineering, and 22 manufacturing the vehicles so that they would function normally, including that they 23 would not accelerate out of control. 24 330. Defendant also owed – and owes – a continuing duty to notify Plaintiff 25 Tomko and the Ohio Class Members of the problem at issue and to repair the dangerous 26 defects. 27 28 86 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 93123 of 95 of 125 PagePage ID #:222 ID #:347 1 331. Defendant breached these duties of reasonable care by designing, 2 engineering, and manufacturing vehicles that accelerated out of control, and breached its 3 continuing duty to notify Plaintiffs of these defects. 4 5 6 332. The foreseeable hazards and malfunctions include, but are not limited to, the sudden and unanticipated and uncontrollable acceleration of these vehicles. 333. Plaintiff Tomko and the Ohio Class Members did not and could not know of 7 the intricacies of these defects and their latent and dangerous manifestations, or the 8 likelihood of harm therefrom arising in the normal use of their vehicles. 9 334. At all relevant times, there existed alternative designs and engineering which 10 were both technically and economically feasible. Further, any alleged benefits associated 11 with the defective designs are vastly outweighed by the real risks associated with sudden 12 and uncontrollable acceleration. 13 335. The vehicles were defective as herein alleged at the time they left 14 Defendant’s factory, and the vehicles reached Plaintiff Tomko and the Ohio Class 15 Members without substantial change in the condition in which they were sold. 16 17 336. As a direct and proximate result of Defendant’s breaches, Plaintiff Tomko and the Ohio Class Members have suffered damages. 18 337. Accordingly, Plaintiff Tomko and the Ohio Class Members s are entitled to 19 recover appropriate damages including, but not limited to, diminution of value, return of 20 lease payments and penalties, and injunctive relief related to future lease payments or 21 penalties. 22 TWENTY-SEVENTH CAUSE OF ACTION 23 UNJUST ENRICHMENT 24 (Based on Ohio Law) 25 (By Plaintiff Tomko on Behalf of the Ohio Class) 26 27 338. Plaintiffs and the Class incorporate by reference each preceding and succeeding paragraph as though fully set forth at length herein. 28 87 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 94124 of 95 of 125 PagePage ID #:223 ID #:348 1 2 3 339. Plaintiff Tomko brings this claim on behalf of himself and on behalf of the Members of the Ohio Class. 340. Plaintiff Tomko and the Ohio Class Members paid Defendant the value of 4 vehicles that are non-defective, and in exchange, Defendant provided Plaintiff Tomko 5 and the Ohio Class Members vehicles that are, in fact, defective. 6 341. Further, Plaintiff Tomko and the Ohio Class Members paid Defendant the 7 value for vehicles that would not be compromised by substantial, invasive repairs, and in 8 return received vehicles that require such repairs. 9 342. Further, Plaintiff Tomko and the Ohio Class Members paid Defendant for 10 vehicles they could operate, and in exchange, Defendant provided Plaintiff Tomko and 11 the Ohio Class Members vehicles that could not be normally operated because their 12 defects posed the possibility of life-threatening injuries or death. 13 343. As such, Plaintiff Tomko and the Ohio Class Members conferred a windfall 14 upon Defendant, which knows of the windfall and has retained such benefits, which 15 would be unjust for Defendant to retain. 16 344. As a direct and proximate result of Defendant’s unjust enrichment, Plaintiff 17 Tomko and the Ohio Class Members have suffered and continue to suffer various 18 damages, including, but not limited to, restitution of all amounts by which Defendant was 19 enriched through its misconduct. 20 21 PRAYER FOR RELIEF WHEREFORE, Plaintiffs Ji Chang Son, Ghodrat Khansari, Madhusudhana 22 Shastrula, Ali Jarrahi, and Michael Tomko, individually and on behalf of all others 23 similarly situated, and K.M.S., on behalf of himself and members of the Class, and 24 Plaintiff K.M.S. respectfully request that this Court: 25 A. determine that the claims alleged herein may be maintained as a class action 26 under Rule 23 of the Federal Rules of Civil Procedure, and issue an order 27 certifying one or more Classes as defined above; 28 88 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES Case Case 8:16-cv-02282-JVS-KES 8:16-cv-02282-JVS-KESDocument Document 2526Filed Filed 03/01/17 03/31/17Page Page 95125 of 95 of 125 PagePage ID #:224 ID #:349 1 B. appoint Plaintiffs Ji Chang Son, Ghodrat Khansari, Madhusudhana Shastrula, 2 Ali Jarrahi, and Michael Tomko as the representatives of the Class(es) and their 3 counsel as Class counsel; 4 C. award all actual, general, special, incidental, statutory, punitive, and 5 consequential damages and restitution to which Plaintiffs and the Class 6 Members are entitled; 7 D. award pre-judgment and post-judgment interest on such monetary relief; 8 E. grant appropriate injunctive and/or declaratory relief, including, without 9 limitation, an order that requires Tesla to repair, recall, and/or replace the 10 Model S and Model X vehicles and to extend the applicable warranties to a 11 reasonable period of time, or, at a minimum, to provide Plaintiffs and Class 12 Members with appropriate curative notice regarding the existence and cause of 13 sudden unintended acceleration; 14 F. award reasonable attorneys’ fees and costs; 15 G. grant such further relief that this Court deems appropriate. 16 17 Dated: March 1, 2017 Respectfully submitted, 18 By: 19 20 21 22 23 24 25 26 /s/ Richard D. McCune Richard D. McCune MCCUNE WRIGHT AREVALO, LLP Attorneys for Plaintiffs JURY DEMAND Plaintiffs demand a trial by jury on all issues so triable. Dated: March 1, 2017 By: /s/ Richard D. McCune Richard D. McCune MCCUNE WRIGHT AREVALO, LLP Attorneys for Plaintiffs 27 28 89 FIRST AMENDED CLASS ACTION COMPLAINT Case No.: 8:16-cv-02282-JVS-KES