Xu v. Porsche Cars N. Am., Inc.

Full title: Michael XU and Daniel Vaz-Pocas, individually and on behalf of all others…

Court: United States District Court, N.D. Georgia, Atlanta Division

Date published: Jan 17, 2023

655 F. Supp. 3d 1214 (N.D. Ga. 2023)

Opinion

CIVIL ACTION NO. 1:20-CV-0510-SEG

2023-01-17

Michael XU and Daniel Vaz-Pocas, individually and on behalf of all others similarly situated, Plaintiffs, v. PORSCHE CARS NORTH AMERICA, INC., a Delaware corporation, Defendant.

David James Worley, James M. Evangelista, Kristi Stahnke McGregor, Evangelista Worley, LLC, Atlanta, GA, Paula R. Brown, Pro Hac Vice, Timothy G. Blood, Pro Hac Vice, Blood Hurst & O'Reardon, LLP, San Diego, CA, for Plaintiffs. Anika Brunson, Pro Hac Vice, Lee Hong Degerman Kang & Wainey, Newport Beach, CA, Brendan Gerard Krasinski, Christopher G. Campbell, DLA Piper LLP, Atlanta, GA, Matthew A. Goldberg, Pro Hac Vice, Timothy Paul Pfenninger, Pro Hac Vice, DLA Piper U.S. LLP, Philadelphia, PA, for Defendant.

SARAH E. GERAGHTY, United States District Judge

David James Worley, James M. Evangelista, Kristi Stahnke McGregor, Evangelista Worley, LLC, Atlanta, GA, Paula R. Brown, Pro Hac Vice, Timothy G. Blood, Pro Hac Vice, Blood Hurst & O'Reardon, LLP, San Diego, CA, for Plaintiffs. Anika Brunson, Pro Hac Vice, Lee Hong Degerman Kang & Wainey, Newport Beach, CA, Brendan Gerard Krasinski, Christopher G. Campbell, DLA Piper LLP, Atlanta, GA, Matthew A. Goldberg, Pro Hac Vice, Timothy Paul Pfenninger, Pro Hac Vice, DLA Piper U.S. LLP, Philadelphia, PA, for Defendant. ORDER SARAH E. GERAGHTY, United States District Judge

This case is before the Court on two motions for summary judgment from Defendant Porsche Cars North America, Inc. ("PCNA"). (Docs. 76, 78.) Each motion is directed at the claims of one of the two named plaintiffs in this case. Each has been fully briefed, with responses in opposition filed by Plaintiffs Xu and Vaz-Pocas (Docs. 100, 101) and replies filed by PCNA (Docs. 111, 112). There are several other pending motions in this case, including a motion for class certification (Doc. 86) and three motions to exclude expert reports (Docs. 96, 117, 118). The Court addresses each of these motions in the order that follows.

This is a products liability action regarding an alleged defect in the engine cooling systems of model year 2010-2014 Porsche Panameras with V6 or V8 engines and model year 2011-2014 Porsche Cayennes with V8 engines. The Court, following the parties' practice, refers to the alleged defect as the "Cooling System Issue" and the relevant cars as the "Subject Vehicles." Plaintiffs Michael Xu and Daniel Vaz-Pocas bring this action under California law, New Jersey law, and the federal Magnuson-Moss Warranty Act on their own behalf and that of a purported class of similarly situated Porsche owners. In a prior order, this Court found that all of Plaintiff Xu's claims and some of Plaintiff Vaz-Pocas' claims survived PCNA's motion to dismiss.¹ (Doc. 34.) But each of those claims had potential timeliness problems. Plaintiff Xu's claims were all dependent on his entitlement to equitable tolling of state statutes of limitations. Plaintiff Vaz-Pocas' claims depended, among other things, on the Court's inference that he purchased an extended warranty when he bought his used Porsche Cayenne. These were all, the Court noted, "factually intensive matters that may, with the introduction of evidence at summary judgment, cut off Plaintiffs' claims at the pass." (Doc. 34 at 48.)

1 This case was reassigned to the undersigned on April 18, 2022.

After having carefully reviewed the parties' briefing and the extensive evidentiary record in this case, the Court concludes that Plaintiffs' claims cannot overcome the hurdles identified in its prior order. The law and undisputed facts dictate that Plaintiff Xu is not entitled to fraudulent concealment tolling of the statute of limitations, and each of his California law claims is therefore time-barred. (His Magnuson-Moss Warranty Act claim fails, in turn, for lack of a viable state-law warranty cause of action.) PCNA is therefore entitled to summary judgment on Xu's claims. Discovery has also revealed that Plaintiff Vaz-Pocas purchased his vehicle after the expiration of the original warranty's time/mileage limitations on express and implied warranty claims, and that Vaz-Pocas did not purchase an extended warranty. His unconscionability defense to the time/mileage limitation on implied warranty claims fails as a matter of law, so PCNA is also entitled to summary judgment on Vaz-Pocas' remaining claims.

For these reasons, elaborated below, the Court GRANTS both of Defendant's motions for summary judgment (Docs. 76, 78). As a result, the pending motion for class certification (Doc. 86) is DENIED, and the motions to exclude the associated expert reports (Docs. 96, 118) are DENIED AS MOOT. The Court decides the other pending motions just below and then proceeds to its discussion of the summary judgment issues. I. Motion to Exclude the Expert Report of Jericho Moll, Ph.D., and Serge Gregory, Ph.D.

The parties have offered several expert reports in connection with their briefing on Plaintiffs' motion for class certification. (Docs. 86-46, 97-4, 97-5.) Both parties have moved to exclude the other's experts. (Docs. 96, 117, 118.) Two of these reports are not relied upon at all in the briefing on the motions for summary judgment, so the Court does not address them here.² PCNA does, however, introduce the report containing the opinions of Jericho Moll, Ph.D., and Serge Gregory, Ph.D., as an exhibit to one of its summary judgment reply briefs. (Doc. 111-3.) The Court will therefore consider Plaintiffs' motion to exclude these opinions under Fed. R. Evid. 702 prior to ruling on the summary judgment motions.

2 The Court will deny these motions as moot as discussed in Part VI(B) below.

For expert testimony to be admissible under Rule 702, the proponent of the testimony must show that: "(1) the expert is qualified to testify competently regarding the matters he intends to address; (2) the methodology by which the expert reaches his conclusions is sufficiently reliable as determined by the sort of inquiry mandated in Daubert; and (3) the testimony assists the trier of fact, through the application of scientific, technical, or specialized expertise, to understand the evidence or to determine a fact in issue." City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 563 (11th Cir. 1998) (citing Fed. R. Evid. 702; Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)).

The report in question contains the opinions of Jericho Moll, Ph.D., a materials scientist, and Serge Gregory, Ph.D., a mechanical engineer. The majority of the report's final conclusions are attributed to Dr. Moll, at whom Plaintiffs target the majority of their arguments. The expert report concludes, among other things, that "manufacturing variability, not material selection" was the source of the alleged defect in the engine cooling systems of the subject vehicles.

Plaintiffs first argue that Dr. Moll is unqualified to offer any opinions on this case because her professional background as a materials scientist renders her not even " 'minimally qualified' to offer opinions on automotive engine cooling systems." (Doc. 119 at 11.) The Court disagrees. Dr. Moll's material extensive scientific expertise in adhesives, polymers, and composites and their failures is clearly relevant here, in a case with alleged adhesive failures at its core. Other courts faced with similar questions have come to similar conclusions. See Simmons v. Ford Motor Co., No. 18-CV-81558-RAR, 2022 WL 168540 (S.D. Fla. Jan. 18, 2022); see also Natl. Union Fire Ins. Co. of Pittsburgh PA v. SPX Flow US, LLC, 428 F. Supp. 3d 1334, 1337-38 (S.D. Fla. 2019) (considering testimony of materials science expert regarding alleged defect in boat engine).

Plaintiffs next argue that Dr. Moll's methodology is unreliable, because she "cherry picks" evidence and relies on evidence that those in her field would not reasonably rely upon. (Doc. 119 at 11.) They cite to evidence from the record that Dr. Moll allegedly ignored in reaching her conclusions. But the report's appendix does list the cited records among the materials that Dr. Moll considered. A trier of fact would of course be free to draw any reasonable conclusions about the report's treatment of the documents to which Plaintiffs point and to measure Dr. Moll and Dr. Gregory's conclusions in light of them. But the Court cannot say that the failure to quote or cite these records, despite averring that they were reviewed, renders Dr. Moll's methods unreliable. This is especially so in a case with a very large body of record evidence. Nor can the Court agree that Dr. Moll relies exclusively or excessively on the testimony of PCNA representative Erich Metzler. The report cites to the Metzler deposition, but its opinions about the gradual degradation of the cooling system parts are evidently based on a wide variety of evidence from the record, physical inspection of the parts, and scientific studies. (See Doc. 97-4 at 15-29.)

Finally, the Court finds—and Plaintiffs' papers do not seriously dispute—that the Moll/Gregory report would assist the trier of fact. The case is about alleged adhesive failures in car engine cooling systems, and the report offers competent opinions about the cause and nature of those failures.

Plaintiffs' motion to exclude the report of Dr. Moll and Dr. Gregory (Doc. 119) is therefore DENIED.³

3 The Court observes that, while it has considered the material in this expert report along with the rest of the admissible record evidence, the report is ultimately immaterial to the ultimate grounds on which it decides the summary judgment motion.

II. Summary Judgment Standard

Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). "[T]he Court must view all evidence and make all reasonable inferences in favor of the party opposing summary judgment." Chapman v. AI Transport, 229 F.3d 1012, 1023 (11th Cir. 2000) (en banc) (quoting Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995)). "An issue of fact is 'material' if it is a legal element of the claim under the applicable substantive law which might affect the outcome of the case." Allen v. Tyson Foods Inc., 121 F.3d 642, 646 (11th Cir. 1997) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A factual dispute "is 'genuine' if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party." Id.

The moving party has the burden of showing the absence of a genuine issue as to any material fact under Rule 56(c). Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). If the movant satisfies that initial burden, it then falls to the nonmovant to "come forward with specific facts showing that there is a genuine issue for trial," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed. R. Civ. P. 56(e)), or in other words to "demonstrate that there is indeed a material issue of fact that precludes summary judgment." Allen, 121 F.3d at 646. "If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment." Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1534 (11th Cir. 1992). If, however, "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita, 475 U.S. at 587, 106 S.Ct. 1348. III. Facts ⁴

4 The Court draws this account of the facts largely from the parties' Statements of Undisputed Material Facts (Docs. 111-6, 112-1) and Statements of Additional Undisputed Facts (Docs. 111-7, 112-2). It is intended as background; some key factual issues are discussed later in connection with the motions for summary judgment. Unless otherwise noted, the Court considers the propositions of fact set forth in this section—in the terms the Court uses—to be matters of undisputed fact. If there are arguments to the contrary about a particular fact in the above-cited documents, the Court has determined that they do not amount to genuine disputes under Fed. R. Civ. P. 56, or that the facts have not been properly disputed pursuant to LR 56.1(B), NDGa. As noted above, Court views the facts in the light most favorable to Plaintiffs, the non-moving parties, and makes all reasonable inferences in their favor. Chapman v. AI Transport, 229 F.3d 1012, 1023 (11th Cir. 2000) (en banc) (quoting Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995)).

A. Overview

This case concerns an alleged defect in the engine cooling systems of certain Porsche cars: model year 2010-2014 Porsche Panameras with V6 or V8 engines and model year 2011-2014 Porsche Cayennes with V8 engines (the "Subject Vehicles"). (Doc. 75 at 2.)

Broadly speaking, an engine cooling system works by distributing coolant fluid throughout an engine so as to regulate its temperature. Here, the alleged defect lies in the method used to join tubes in two parts of the cooling system in the Subject Vehicles. These two parts, the thermostat assembly (sometimes called the "thermostat housing") and the distributor assembly, contain aluminum tubes joined with an acrylic-based adhesive called Loctite 638.⁵ While the precise cause, nature, and frequency of the adhesive joints' failure are at the core of this dispute, it is not disputed that at least some of the Subject Vehicles have experienced some form of failure in their cooling systems related to these adhesive joints. The mechanism of these failures is the breakdown of the adhesive bond, which leads to a loosening or separation of the joined tubes and allows coolant fluid to leak or spill from the pipes. As noted above, the Court, following the practice of the parties, will refer to this general issue in the Subject Vehicles as the "Cooling System Issue."

5 Loctite adhesive is manufactured by Henkel AG & Co., KGaA, ("Henkel") a German corporation not party to this case.

Plaintiffs Xu and Vaz-Pocas both allege that they incurred economic losses when their respective Porsche vehicles experienced the Cooling System Issue and Defendant PCNA refused to fully compensate them for the necessary repairs. Xu bought his 2012 Porsche Cayenne S new from a dealership in California, while Vaz-Pocas bought the same model used from a dealership in New Jersey. Xu and Vaz-Pocas bring claims against PCNA for breach of implied warranty of merchantability under California law and New Jersey law, respectively, as well as claims under the federal Magnuson-Moss Warranty Act. Xu also brings claims under the California Consumers Legal Remedies Act, the California Unfair Competition Law, and the common law doctrine of unjust enrichment.⁶

6 Vaz-Pocas originally brought additional claims that this Court dismissed in its November 2020 order (Doc. 34) adjudicating PCNA's motion to dismiss under Rule 12(b)(6).

B. Defendant PCNA

Defendant PCNA is the exclusive importer and distributor of Porsche-brand vehicles in the United States. (Doc. 111-6 at 5, ¶ 2.) PCNA does not design or manufacture Porsche vehicles, something that the undisputed record evidence shows is done by PCNA's German parent company, Dr. Ing. h.c. F. Porsche AG ("Porsche AG"). (Doc. 111-6 at 8, ¶ 4.) Porsche AG is not a party to this case.

C. Plaintiff Xu

Plaintiff Michael Xu lives in Los Angeles County, California. On April 26, 2011, he custom ordered a model year 2012 Porsche Cayenne S from Circle Porsche, a dealership in Long Beach, California. (Doc. 111-6 at 16, ¶ 19; Doc. 111-7 at 5, ¶ 1.) The vehicle was delivered to Xu on August 17, 2011. (Doc. 111-6 at 17, ¶ 20.)

Before ordering his Cayenne S, Xu researched that car and some other vehicles he was considering. He reviewed information on various websites, and he solicited information through posts on an online forum dedicated to the discussion of cars. (Id. at 9-11, ¶¶ 8-10.) Xu also test drove various Cayenne models, spoke with a representative at the Circle Porsche dealership, reviewed a sales brochure about the Cayenne, and reviewed information on the Porsche website. (Id. at 12, ¶¶ 12-14.) In none of these places—either in third-party or PCNA-generated materials—did Xu encounter any specific information regarding the Cayenne's engine cooling system. (Id. at 13-15, ¶¶ 15-17; Doc. 111-7 at 5, ¶ 2.) Xu's car was subject to PCNA's New Car Limited Warranty ("NCLW"), which expires after four years or 50,000 miles, whichever comes first. (Doc. 111-5.)

At 2:33 p.m. on March 16, 2019, a little less than 8 years after the car was delivered to him, Xu was driving his Porsche Cayenne on the highway "when red warnings on the vehicle's instrument cluster and flashing red lights on the temperature gauge illuminated," indicating that the car was low on coolant. (Doc. 111-6 at 67-68, ¶ 72-73.) Xu continued to drive until a second warning light came on, indicating that the engine was overheating. (Id. at 71, ¶ 75.) He then found the nearest exit and located "the nearest safe place [he] could pull over," which he did. (Id. at 72, ¶ 76.) While pulled over, he noticed liquid leaking from the bottom of the car. (Id. at 72, ¶ 77.) He waited on the side of the road for the engine to cool, and then drove the car about 1.5 miles home. (Id. at 73-74, ¶¶ 78-79.)

In the following days, Xu brought his car to Porsche Rusnak, an authorized Porsche dealership, which repaired the cooling system using "updated parts that used a threaded pipe design instead of adhesive." (Id. at 79-80, ¶¶ 86-90.) Xu paid a total of $3,834.93 for the repair, an amount that represents the total cost of the repair less a $3,065.44 "goodwill payment" from PCNA. (Id.) Xu "called PCNA for assistance but was told PCNA was not aware of this issue in other vehicles," and thus he would only receive a goodwill payment. (Doc. 111-7 at 43, ¶ 34.)

D. Plaintiff Vaz-Pocas

Plaintiff Vaz-Pocas lives in Yonkers, New York, and on January 28, 2017, he purchased a used 2012 Porsche Cayenne S from Town Motors in Englewood, New Jersey. (Doc. 112-1 at 4, ¶ 1.) Vaz-Pocas' car had been delivered to its original owner by an authorized Porsche dealer on February 13, 2012. Like Xu's car, Vaz-Pocas' car was subject to the NCLW. In Vaz-Pocas' case, however, the time and mileage limitations the NCLW imposed on written and implied warranty claims had expired before Vaz-Pocas purchased the car. (Doc. 112-1 at 6-7, ¶¶ 5-9.) Vaz-Pocas could have purchased an extended warranty at the time he bought the car, but he chose not to do so. (Id. at 4-5, ¶¶ 10-11.)

Vaz-Pocas' used Porsche Cayenne S manifested the Cooling System Issue (in the coolant distributor assembly) about four months after he bought it, in May 2017. (Doc. 101 at 6.) Vaz-Pocas' vehicle was repaired by Town Motors at an out-of-pocket cost of about $701.55; the rest of the cost was paid by PCNA as part of a "goodwill payment," but "[o]nly after Vaz-Pocas repeatedly complained." (Doc. 102-36; Doc. 101 at 7.) Town Motors replaced the adhesive joint in the coolant distributor that had failed but not the adhesive joint in the thermostat housing, which had not. (Doc. 102-36; Doc. 112-2 at 27, ¶ 21.)

E. Porsche AG's Internal Investigations of the Cooling System Issue

Internal investigations at Porsche AG regarding potential issues in Porsche vehicles are called "SBT investigations." These investigations involve the collection of information by an "SBT team" of Porsche AG employees in a centralized investigation file called an "SBT Point." Porsche AG will open an SBT Point when it identifies a potential issue with its vehicles, at which time Porsche AG investigates the issue, determines what the root cause is, and if necessary implements a countermeasure. (Doc. 77-2 at 11.) It may be, however, that an SBT investigation does not lead to the implementation of any countermeasure, since it may be determined that there is nothing to fix. (Id.) The opening of an SBT investigation therefore does not in itself indicate the existence of a problem or defect. (Doc. 111-6 at 35, ¶ 37.)

1. The 2007 SBT Investigation of Certain Porsche 911 Model Vehicles

In August 2007, Porsche AG opened an SBT investigation into "sudden loss of coolant from [the] engine" in certain Porsche 911 model vehicles—that is, a Porsche model other than those at issue in this litigation. (Doc. 103-5.) Porsche AG had initiated this 2007 investigation "based on 15 warranty claims on GT3 and 911 Turbo vehicles for coolant leakage." (Doc. 102-33 at 4.) Porsche AG determined that "the leaks on [two vehicles that were examined] arose from the bonded joints, and were caused by an inadequate application of adhesive on the pipe connections of these two vehicles." (Id.) In Porsche AG's view, in other words, the problem resulted from an aspect of the manufacturing process of the cooling systems of these vehicles. Porsche AG decided to remediate the problem by working with the supplier responsible for this part of the engine to introduce "quality improvements" that would "ensure a more consistent application of the adhesive." (Id.; see also Doc. 103-5.) More specifically, the supplier introduced "an automated metering device for application of adhesive on pipe adapters." (Id. at 5.) For the cooling systems in their Porsche 911 vehicles, Porsche AG's chosen countermeasure for the 911s was more adhesive, more evenly applied.

2. The 2011 SBT Investigation of the Subject Vehicles' Thermostat Housings

On July 11, 2011, Porsche AG opened another SBT investigation, this time into the thermostat housing in the Subject Vehicles' engine cooling systems. (Doc. 111-6 at 18, ¶ 22.) Prior to opening the investigation, Porsche AG had identified "thirty-one worldwide warranty cases involving claims that the engines were losing coolant, and that repair facilities found that certain pipes had come loose form the thermostat housing." (Id. at 20, ¶ 24; Doc. 77-3 at 2.) PCNA, for its part, had received 15 warranty claims as of July 11, 2011, in which the thermostat housing in the Subject Vehicles had been replaced, at least five and as many as eight of which related to the Cooling System Issue.⁷ (Id. at 22, ¶ 26.)

7 Three cases (rows 4, 6, and 9) in PCNA's warranty data spreadsheet either contain "technical evaluation" descriptions that are vague, or no description at all. (Doc. 77-5 at 4-7.) The parties dispute whether it can be inferred that these pertain to the Cooling System Issue. (Doc. 111-6 at 25, ¶ 27.) Making reasonable inferences against the movant, the Court will assume for purposes of this order that the figure is eight.
Xu introduces third-party warranty data called "DMI Data" as Exhibits 6 and 7 to his Response. (Docs. 103-10, 103-11.) "DMI Data" is vehicle warranty and repair data that PCNA purchases from a third party, which in turn collects the data from dealer management systems. (Doc. 111-6 at 23.) Xu argues that this data shows "over 50 warranty repairs" to the thermostat housing and coolant distributor parts of "2010-2011 Panameras and 2011 Cayennes" took place before July 11, 2011. (Doc. 111-6 at 23.)
PCNA argues that the DMI Data would be inadmissible "because it constitutes hearsay, contains hearsay within hearsay, and has not been authenticated," as it "was prepared by a third party and relies on information collected from other third parties." (Doc. 111-6 at 24.) The Court agrees that this third-party data constitutes inadmissible hearsay. At least as long as it remains unauthenticated, it cannot fall under the business records exception. See Fed. R. Civ. P. 56(c)(2); Fed. R. Evid. 801; id. 803(6)(D); see also Campbell v. Shinseki, 546 Fed. App'x 874, 879 (11th Cir. 2013) ("The plain meaning of [Fed. R. Civ. P. 56(c)(2) is that] objecting to the admissibility of evidence supporting a summary judgment motion is now a part of summary judgment procedure, rather than a separate motion to be handled preliminarily.").

Porsche AG employees conducted the SBT investigation and added information to the SBT Point. PCNA employees do not themselves conduct testing or add information to the SBT Point, but PCNA has a "front desk engineering team" that was formally notified about the SBT Point on July 13, 2011, two days after the investigation was officially opened. (Doc. 111-6 at 30, 36, 41, ¶¶ 32-33, 39, 41-42.) This PCNA team provided information to Porsche AG for use in its investigation. (See, e.g., Doc. 103-13 at 8.)

3. The 2012 SBT Investigation of the Subject Vehicles' Coolant Distributor Assembly

Porsche AG opened a second, related SBT investigation on June 27, 2012, into the coolant distributor assembly of the Subject Vehicles. It is undisputed that neither during the 2011 nor the 2012 SBT investigation did PCNA (or Porsche AG) consider the issue under investigation—that is, the Cooling System Issue in the Subject Vehicles—to be a safety risk.⁸ (Doc. 111-6 at 44-45, ¶ 44-46.)

8 Porsche AG assigned the Cooling System Issue a "quality ranking index" score of 800 out of 1000, indicating "the issue poses the potential for a soft breakdown (i.e., a quality issue requiring the customer to bring the vehicle in for service)." (Doc. 111-6 at 45, ¶ 46.) Of course, PCNA's conclusion is not dispositive of whether a safety risk existed.

On June 12, 2012, Porsche AG made a final determination as to the cause of the thermostat housing failure in the Subject Vehicles, and on July 24, 2012, it made the same determination with respect to the coolant distributor housing. (Doc. 111-6 at 47-49, ¶¶ 49-50.) Generally speaking, Porsche AG determined that the cause of the Cooling System Issue was "uneven adhesive strength over the circumference of the pipe socket under simultaneous thermal load (>100°C)." (Id. at 50, ¶ 51; Doc. 77-11 at 3.)

The parties dispute how the SBT investigation's findings should be characterized. Plaintiffs insist that what they call PCNA's "adhesive design" was the problem. They assert, in other words, that the Cooling System Issue arose from the decision to use Loctite 638 in the cooling system, and that any manufacturing issues were secondary. There is some support for this in the record, including one entry in the SBT Point observing that even an optimized bonding process could not ensure that the bonds remained tight over the runtime of the vehicles. (Doc. 103-14 at 53.) Other entries in the SBT Point can be read to suggest that uneven application of the adhesive in the manufacturing process contributed to the failures but, in doing so, was secondary to certain characteristics of the adhesive itself. (See Doc. 103-20 at 2; Doc. 103-26 at 11.)

PCNA disagrees. Its representative deposed that the "root cause" was identified as oxygen ingress during the manufacturing process. (Doc. 77-11 at 3.) The idea is that, due to uneven application of the adhesive during manufacturing, "gaps or bubbles" were introduced into the bond, and these "could lead to degradation of the adhesive as it was exposed to movement and changes in vehicle operating conditions such as elevated engine temperatures." (Doc. 111-6 at 52-52, ¶ 52.) Air bubbles got in, and this made the adhesive weaker than it otherwise would have been. PCNA's experts, Jericho Moll, Ph.D., and Serge Gregory, Ph.D., P.E.—respectively a materials scientist and a mechanical engineer—provided a sworn export report in which they conclude, among other things, that "manufacturing variability, not material selection, led to the conditions necessary to cause leaking and separation in the Subject Vehicles' cooling system components.⁹ (Doc. 111-3 at 25.)

9 Plaintiffs offer the expert affidavit of Murat Okcuoglu (Doc. 86-46) in support of their Motion for Class Certification, but they do not appear to cite or rely on this affidavit in any of their summary judgment briefing. The Court therefore does not consider this report here. See Fed. R. Civ. P. 56(c)(3).

The Court finds that it is undisputed that manufacturing variability played some role in the Cooling System Issue, but that the exact root cause of the issue is a matter of genuine dispute. Ultimately, however, it is not a material issue of fact.¹⁰ It is also undisputed that the issues in the 911s and the Subject Vehicles are "similar." (See, e.g., Doc. 111-6 at 32, ¶ 34; Doc. 111-7 at 30, ¶ 22.)

10 This is because, given the basis of the Court's decision with respect to Plaintiff Xu, the question is not what PCNA eventually determined was the "root cause," but what PCNA knew about the alleged defect at certain points in time. See Part IV below.

By August 2013, Porsche AG had information regarding many more manifestations of the Cooling System Issue. Data from August 7, 2013 indicates that there had been 4,198 cases in the Subject Vehicles worldwide, representing 2.85% of all delivered vehicles. (Doc. 103-26 at 5.) A graph in the same document shows about 1,000 cases in the United States for a rate of 2.45%. (Id. at 8.) The same report described a volume of spare parts sales "well above" the number of cases billed under warranty, and it predicted a steadily increasing number of failures over time, including rates in excess of 20% after 48 months for some production intervals. (Id. at 9-10.) Another document from the SBT Point forecasted a failure rate of between 18% and 50% after four years, depending on when a vehicle was produced, (Doc. 103-14 at 26.) This forecast was dated September 17, 2013. (Id.)

Unlike the countermeasure applied to the 911 model vehicles following the 2007 investigation, the countermeasure ultimately adopted with respect to the Cooling System Issue involved the abandonment of adhesive joints in the relevant parts altogether. In December 2013, Porsche AG introduced new parts that "employed a threaded or bolted connection and did not use adhesive."¹¹ (Doc. 111-6 at 57, ¶ 59; Doc. 77-2 at 9, ¶ 184:7-23.)

11 The Court notes that pursuant to Fed. R. Evid. 407, subsequent remedial measures are inadmissible to prove "a defect in a product or its design," although they may be admissible for other purposes. In other words, it is not permissible to infer from the mere fact Porsche AG changed the connection mechanism to a threaded/bolted connection that the use of adhesive was itself defective.

4. The 2013 NHTSA ODI Investigation of Certain Porsche 911 Model Vehicles

One final investigation—this time a government investigation—must be discussed. On April 26, 2013, the National Highway Traffic Safety Administration (NHTSA) Office of Defects Investigation (ODI) opened an investigation into "complaints alleging incidents of sudden coolant loss while traveling on public roadways in certain model year (MY) 2001 through 2007 Porsche 911 vehicles." (Doc. 76-29 at 2.) This investigation did not involve the Subject Vehicles or their Cooling System Issue directly. Rather, it involved the same 911 model vehicles that had been the subject of Porsche AG's 2007 SBT investigation and the manufacturing-process countermeasure that had resulted from it.

In cooperation with the ODI's investigation, Porsche AG and PCNA provided the investigators with field data and other information regarding the issue, including the implementation of the countermeasure. (Doc. 111-6 at 60, ¶ 63; Doc. 76-30.) In a September 17, 2013, response to one query from the ODI investigator, which asked PCNA to identify other Porsche vehicles that "contain the identical coolant pipe connection method (adhesive)," Porsche identified the Subject Vehicles. (Doc. 76-30 at 12-13.) This is the only information specifically regarding the Subject Vehicles that appears in Porsche's public disclosures to ODI. On March 14, 2014, ODI closed its investigation after concluding that it had not identified "a safety-related defect" and that "further use of agency resources does not appear to be warranted." (Doc. 76-29 at 3.) It also noted that "[t]he closing of this investigation does not constitute a finding by NHTSA that a safety-related defect does not exist." (Id.)

F. PCNA's Knowledge of Porsche AG's Investigations

It is a matter of genuine dispute whether PCNA was aware of the findings of Porsche AG's SBT investigations. It is clear that although PCNA could not add to or edit the SBT Point files, it was aware of both SBT investigations at least as early as July 13, 2011, when its front desk engineering team was notified about the investigation. (Doc. 111-6 at 36, ¶ 39.) The record also shows that PCNA had at least some discussions with dealerships about the issue while the SBT investigations were ongoing, and that it was monitoring the investigation's progress at least to some degree. (See Doc. 103-23; Doc. 111-7 at 23, ¶ 15.) Internal emails among PCNA employees in early 2013 acknowledged that the issue was a large one and that demand for thermostat housings was increasing. (Doc. 103-24.) There is, the Court finds, sufficient factual basis to infer that PCNA was monitoring the SBT Points and understood the nature and magnitude of the Cooling System Issue. For purposes of summary judgment, knowledge of the contents of the SBT Points can be reasonably attributed to PCNA beginning on July 13, 2011.

G. Procedural History

Plaintiffs filed suit against PCNA on February 3, 2020. (Doc. 1.) PCNA moved to dismiss, and the Court granted the motion as to several of Plaintiff Vaz-Pocas' causes of action based in New Jersey law, but it denied the motion as to the rest of Plaintiffs' claims. (Doc. 34.) On January 10, 2022, the parties stipulated to an amendment of the pleading that removed the causes of action that the Court had dismissed and made several minor adjustments to conform the allegations to the results of discovery. (Doc. 74.) The operative complaint is therefore Plaintiffs' First Amended Complaint (Doc. 75). Ashley v. Jaipersaud, 544 F. App'x 827, 829 n.3 (11th Cir. 2013) (citing Lowery v. Ala Power Co., 483 F.3d 1184, 1219 (11th Cir. 2007)).

The remaining causes of action are as follows: (1) breach of implied warranty of merchantability (both plaintiffs); (2) breach of implied and written warranties in violation of the Magnuson-Moss Warranty Act ("MMWA") (both plaintiffs); (3) violations of California's Consumer Legal Remedies Act ("CLRA") (Xu only); (4) violations of California's Unfair Competition Law ("UCL") (Xu only); (5) unjust enrichment (Xu only).

IV. Motion for Summary Judgment as to Plaintiff Xu (Doc. 76)

A. Applicable Statutes of Limitations

As this Court recognized in its order (Doc. 34) on Defendant's Motion to Dismiss (Doc. 12), all of Plaintiff Xu's claims have potential statute of limitations problems. The California Commercial Code requires that implied warranty claims be brought within four years of delivery. Cal. Comm. Code. § 2725(1)-(2). Claims under the CLRA are subject to a three-year statute of limitations from the date of the act made unlawful under the CLRA. Cal. Civ. Code § 1783. Claims under the UCL "are subject to a four-year statute of limitations which beg[i]n[s] to run on the date the cause of action accrue[s], not on the date of discovery." Karl Storz Endoscopy-America, Inc. v. Surgical Tech., Inc., 285 F.3d 848, 857 (9th Cir. 2002) (citing Cal. Bus. & Prof. Code § 17208). Claims for unjust enrichment or restitution in California are subject to a two-year statute of limitations. Cal. Code Civ. Proc. § 339(1); Wu v. Sunrider Corp., 793 F. App'x 507, 510 (9th Cir. 2019) (unpublished) ("A two-year statute of limitations applies to Wu's unjust enrichment claim.") (citing Cal. Code Civ. Proc. § 339(1)). Finally, Xu's claim under the MMWA depends on the existence of a viable state-law warranty claim. See McCabe v. Daimler AG, 948 F. Supp. 2d 1347, 1364 (N.D. Ga. 2013); Wilson v. MarineMax E., Inc., 303 F. Supp. 3d 1343, 1366 (N.D. Ga. 2018). In effect, this makes his MMWA claim subject to the California four-year statute of limitations for implied warranty claims as well.

The sale of Xu's car was completed on August 17, 2011, when his vehicle was delivered to him.¹² Breaches of implied warranty accrue "when tender of delivery is made." Cal. Com. Code Ann. § 2725(2) (West); see Cardinal Health 301, Inc. v. Tyco Elecs. Corp., 169 Cal.App.4th 116, 87 Cal. Rptr. 3d 5, 15-21 (2008). The alleged conduct for which Xu seeks relief under the CLRA, UCL, and the law of unjust enrichment took place on or before that date. (Doc. 75 ¶¶ 94-120.)

12 A sale under California law consists in the passing of title, and title passes to the buyer upon physical delivery of the goods. Cal. Com. Code. §§ 2106(1), 2401(2).

Xu does not dispute that these statutes of limitations apply to his claims. But he argues that PCNA's fraudulent concealment of the Cooling System Issue tolled the statutes of limitations until the defect manifested in his car in 2019. At the motion to dismiss stage, the Court held that Xu had adequately pled facts to support this theory. Now, following discovery, PCNA argues that the undisputed evidence shows that no fraudulent concealment occurred. In particular, it argues that there is no genuine dispute:

(1) that PCNA did not have knowledge of any defect at the time it sold Xu his car;

(2) that PCNA did not fraudulently conceal information about a defect in the Subject Vehicles from NHTSA ODI investigators;

(3) that PCNA did not fraudulently conceal information about the Cooling System Issue from its authorized service technicians or from Xu himself after his vehicle broke down.

Xu argues that there are genuine issues of material fact on each issue.

The Court concludes that, under the operative legal standards, Xu's evidence is insufficient to create a genuine dispute on each of the above questions. Discovery has undermined several of the allegations on which the Court relied in its ruling on the fraudulent concealment question in its prior order.¹³ Most important for the following discussion are questions about what PCNA knew of the Cooling System Issue, when it knew it, and what representations and omissions Plaintiffs actually relied upon. These allegations were essential to a finding that Plaintiff had adequately alleged "the substantive elements of fraud," as required to toll the limitations period under the fraudulent concealment theory. Investors Equity Life Holding Co. v. Schmidt, 195 Cal.App.4th 1519, 126 Cal. Rptr. 3d 135, 146 (2011). In essence, Plaintiff is not entitled to tolling because the evidence is insufficient to create genuine disputes as to the facts material to those "substantive elements."

13 In addition, the cases the Court relied upon at that stage held that the pleading standard for allegations resting on fraudulent omissions is "somewhat relaxed." Asghari v. Volkswagen Grp. of Am., 42 F. Supp. 3d 1306, 1325 (C.D. Cal. 2013); see Sater v. Chrysler Group LLC, EDCV 14-00700-VAP, 2015 WL 736273 at *9 (C.D. Cal. Feb. 20, 2015). But what these cases hold regarding the pleading standard under Fed. R. Civ. P. 9(b) does not extend to the burden of proof at trial.

B. Fraudulent Concealment Standard

In California, as in most jurisdictions, "the defendant's fraud in concealing a cause of action against him tolls the applicable statute of limitations, but only for that period during which the claim is undiscovered by plaintiff or until such time as plaintiff, by the exercise of reasonable diligence, should have discovered it." Bernson v. Browning-Ferris Indus., 7 Cal.4th 926, 30 Cal.Rptr.2d 440, 873 P.2d 613, 615 (1994). "The rule of fraudulent concealment is an equitable principle," one that is "applicable whenever the defendant intentionally prevents the plaintiff from instituting suit[.]" Id. 30 Cal.Rptr.2d 440, 873 P.2d at 615, 616 n.3. To be entitled to fraudulent concealment tolling, "the plaintiff must show (a) the substantive elements of fraud, and (b) an excuse for late discovery of the facts." Investors Equity, 126 Cal. Rptr. 3d at 146.

An omission may constitute an act of fraudulent concealment only where a defendant is under a legal duty to disclose. See Kimball v. P. Gas & Elec. Co., 220 Cal. 203, 30 P.2d 39, 45 (1934); Hexcel Corp. v. Ineos Polymers, Inc., No. 209-CV-05334-MRP-RNB, 2010 WL 11509041, at *8 (C.D. Cal. Oct. 13, 2010), aff'd, 681 F.3d 1055 (9th Cir. 2012); Long v. Walt Disney Co., 116 Cal.App.4th 868, 10 Cal. Rptr. 3d 836, 841 (2004). Under California law, there are four circumstances under which such a duty might arise:

(1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts.

Smith v. Ford Motor Co., 749 F. Supp. 2d 980, 987 (N.D. Cal. 2010), aff'd, 462 Fed. App'x 660 (9th Cir. 2011) (citation omitted); Warner Constr. Corp. v. City of Los Angeles, 2 Cal.3d 285, 85 Cal.Rptr. 444, 466 P.2d 996, 1001 (1970); see also Goodman v. Kennedy, 18 Cal.3d 335, 134 Cal. Rptr. 375, 556 P.2d 737, 745 (1976) ("[A] duty of disclosure . . . may exist when one party to a transaction has sole knowledge or access to material facts and knows that such facts are not known to or reasonably discoverable by the other party.").

The first circumstance can be set aside at the outset, for at no time was PCNA in a fiduciary relationship with Xu. The remaining circumstances all require that the omitted facts be "material." In the products liability context, California courts have construed this requirement relatively narrowly: for a fact to be "material" it must "pose safety concerns." Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1142 (9th Cir. 2012); see also Oestreicher v. Alienware Corp., 322 F. App'x 489, 493 (9th Cir. 2009); Smith v. Ford Motor Co., 749 F. Supp. 2d 980, 987-93 (N.D. Cal. 2010), aff'd, 462 F. App'x 660 (9th Cir. 2011).¹⁴ In addition, the duty to disclose a material fact "can only come into being as a result of some sort of transaction between the parties." LiMandri v. Judkins, 52 Cal.App.4th 326, 60 Cal. Rptr. 2d 539, 543 (1997) (citing Goodman, 134 Cal.Rptr. 375, 556 P.2d at 745; Warner Constr. Corp., 85 Cal.Rptr. 444, 466 P.2d at 1001). "Thus, a duty to disclose may arise from the relationship between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement." Id. 52 Cal.App.4th 326, 60 Cal. Rptr. 2d at 543. Finally, it bears repeating that the basis of a fraudulent omission is a manufacturer's superior knowledge of a material fact. See Goodman, 134 Cal.Rptr. 375, 556 P.2d at 745; Smith, 749 F. Supp. 2d at 987.

14 In adopting this rule, Wilson followed Daugherty v. American Honda Motor Co., 144 Cal. App. 4th 824, 51 Cal. Rptr. 3d 118 (Ct. App. 2006), noting that "California courts have generally rejected a broad obligation to disclose, adopting instead the standard as enumerated by the California Court of Appeal in [Daugherty]." Wilson, 668 F.3d at 1141. Wilson and Daugherty were both immediately concerned with actions for fraudulent omissions under the California Consumer Legal Remedies Act (CLRA). Other California federal court cases have, however, applied Daugherty's rule to California common law actions for fraudulent concealment in products liability cases. See Oestreicher, 322 F. App'x at 493; Smith, 749 F. Supp. 2d at 993, aff'd, 462 F. App'x 660. The same rules regarding a manufacturer's duty to disclose apply to fraudulent concealment for the purpose of tolling the statute of limitations. See Investors Equity, 126 Cal. Rptr. 3d at 146 (plaintiff raising defense of fraudulent concealment to statute of limitations must prove "substantive elements of fraud"). Applying the same rule regarding the duty to disclose also accords with the policy considerations behind Daugherty and Wilson, namely that "to broaden the duty to disclose beyond safety concerns 'would eliminate term limits on warranties, effectively making them perpetual or at least for the 'useful life' of the product.' " Wilson, 668 F.3d at 1141.
For the sake of precision, the Court observes that Wilson remains binding in the Ninth Circuit despite two recent California Court of Appeal cases that have called it into doubt. Taleshpour v. Apple, Inc., No. 21-16282, 2022 WL 1577802, at *1 (9th Cir. May 19, 2022) (holding that "Wilson is binding on us, regardless of how we may read Hodsdon" and affirming dismissal of a case that failed to plead an omitted fact was a safety hazard). This Court finds Wilson to be a persuasive account of California law in the absence of a controlling decision of the California Supreme Court.

All of this applies only to fraudulent omissions. Absent a duty to disclose, "nondisclosure is not fraudulent concealment—affirmative deceptive conduct is required." Long, 10 Cal. Rptr. 3d at 841. Such "affirmative deceptive conduct" must amount to "intentional concealment" to warrant tolling of the statute of limitations. Bernson, 30 Cal.Rptr.2d 440, 873 P.2d at 615; see also id. 30 Cal.Rptr.2d 440, 873 P.2d at 618 (distinguishing a case where "[t]here was no indication . . . that the defendant had intentionally concealed his identity to the detriment of the plaintiff").

Finally, in addition to showing affirmative acts of fraudulent concealment on the part of the defendant, a plaintiff raising a fraudulent concealment defense to a statute of limitations must also show that he lacked actual or constructive knowledge of his cause of action despite "reasonable diligence." Bernson, 30 Cal. Rptr.2d 440, 873 P.2d at 615; Beneficial Stand. Life Ins. Co. v. Madariaga, 851 F.2d 271, 276 (9th Cir. 1988); Wood v. Santa Barbara Chamber of Commerce, Inc., 705 F.2d 1515, 1521 (9th Cir. 1983).

In sum, there are two principal ways Xu might show entitlement to fraudulent concealment tolling. His evidence might show that PCNA knew about a material fact—here meaning a safety defect—but failed to disclose it to him at the time of sale. Or his evidence might show that PCNA engaged in "affirmative deceptive conduct" to intentionally prevent him from discovering his cause of action within the statute of limitations.

C. PCNA's Knowledge of the Cooling System Issue at the Time of Sale

The first possible basis for a finding of fraudulent concealment is a fraudulent omission at the time of sale. For this to be a viable theory, there must at least be a genuine issue of fact as to whether PCNA knew of a defect affecting Xu's car at the time it delivered the vehicle to him on August 17, 2011, about a month after Porsche AG opened its SBT investigation on July 11. Otherwise PCNA's "exclusive knowledge of material facts not known to the plaintiff" could, obviously, not be basis for tolling the limitations period. See Smith, 749 F. Supp. 2d at 987.

First, a word about Xu's contention that the 2007 SBT investigation into the Porsche 911s meant that PCNA already "knew of the adhesive defect since August 2007." (Doc. 103 at 19.) This argument rests on the assumption that the issues in the 911s and the issues in the Subject Vehicles are identical, and that PCNA should have known from the 911 investigation that the mere use of adhesive in the Subject Vehicles' cooling systems would render them defective. The issues are undisputedly similar, but it is also undisputed that the countermeasure applied to the 911s was the application of more adhesive. Even if it were ultimately determined that the "root causes" of the Subject Vehicles' problems and the 911s' problems were the same—which is an issue of genuine dispute—the question here is what PCNA actually knew in August 2011. The bare fact of the 911 investigation cannot support the inference that PCNA knew any future use of adhesive connections—just because they used adhesive—would be defective.¹⁵

15 Xu has not pointed to any evidence in the SBT file in which PCNA or Porsche AG drew connections between the 2007 SBT investigation regarding the 911s and the Cooling System Issue in the Subject Vehicles. Indeed, in connection with its motion for summary judgment, Plaintiffs have not pointed to any references at all to the 911 issue in the records of the Subject Vehicles' SBT investigations. The same is true of the various internal PCNA correspondence regarding the Subject Vehicles' Cooling System Issue discovered by Xu and cited in his papers. This is not to say that only such direct evidence could support the relevant conclusion about PCNA's knowledge, but its complete absence is notable. The Court is aware of at least one reference to the 911s in an SBT document, which is called to the Court's attention in an exhibit to Plaintiff's motion for class certification, but it is not probative of much. See Note 20 infra.

Next the Court must consider whether the fact of the 2007 investigation, in combination with the opening of a new SBT investigation in July 2011 and the handful of warranty claims, amount to enough evidence to reasonably infer that PCNA had knowledge of a safety-related defect. As evidence that PCNA knew his vehicle was defective when it was delivered, Xu points to the following evidence:

(1) that Porsche AG had investigated some Porsche 911 models for coolant leaks related to a problem with the adhesive coolant pipe joints in 2007;

(2) that Porsche AG had opened a formal SBT investigation into the coolant leakage in the Subject Vehicles on July 11, 2011;

(3) that, at most, eight warranty claims attributable to the Cooling System Issue in the thermostat housing had been filed with PCNA by July 11, 2011;

(4) that this constituted no more than 0.06% of the Subject Vehicles that had been delivered to consumers worldwide.¹⁶

This evidence is not sufficient to create a genuine dispute as to whether PCNA knew a defect existed on August 17, 2011.

16 PCNA calculates, based on its figure of eight thermostat housing warranty claims by July 11, 2011, that 0.03% of all Subject Vehicles produced for the U.S. market had manifested the Cooling System Issue. (Doc. 111-6 at 22, ¶ 25). This number is not very useful, as it counts vehicles not yet actually delivered to customers. A Porsche document reporting repair data related to the Cooling System Issue in the Subject Vehicles through June 2011 records the worldwide cases per delivered vehicle rate of 0.06%. (Doc. 103-12 at 3.) The Court uses this number. Xu argues that PCNA had observed "significant failures" by July 2011, relying on the third-party warranty data. (Doc. 103 at 20.) The Court ruled above that this unauthenticated third-party data is inadmissible hearsay. See supra n. 9. Even if the Court were to consider it, it would not compel a different conclusion.

To determine that PCNA knew Xu's vehicle was defective at this time, a jury would have to reason that PCNA engaged in the following chain of inferences: (1) last month, Porsche AG opened an internal investigation into leakage from Cayenne engine cooling systems, which it regarded as creating the potential for non-safety-related "soft breakdowns"¹⁷; and (2) four years ago, Porsche AG investigated a similar issue in a different vehicle and implemented a manufacturing countermeasure; and (3) PCNA thus far had recorded eight warranty claims related to the Cayenne leakage issue; therefore, (4) the Porsche Cayenne suffers from a safety-related defect. It is not at all clear that this is even a reasonable train of thought, let alone that a jury could find that PCNA did, in fact, think it. At most, the evidence is sufficient to show that a prudent car manufacturer would have investigated the issue carefully, which is what Porsche AG did. It is undisputed that the opening of an SBT investigation does not, in itself, indicate that a "defect" has been identified. Some such investigations result in the determination that there is no issue at all. (Doc. 111-6 at 34; Doc. 77-2 at 11; Doc. 103-13 at 5, ¶¶ 192:5-192:24.) To impute knowledge of a defect to PCNA within weeks after an internal investigation was opened—based only the fact of the investigation—would not only make little sense, but it might well discourage manufacturers from conducting such investigations in the first place. And California federal district and state courts, faced with similar sets of facts, have declined to find the evidence sufficient to create a genuine dispute about the car manufacturers' knowledge of a defect. See Dienes v. FCA US LLC, 16-CV-1812-AJB-BGS, 2018 WL 1258118 (S.D. Cal. Mar. 12, 2018); Santana v. FCA US, LLC, 56 Cal.App.5th 334, 270 Cal. Rptr. 3d 335, 344-45 (2020).

17 Doc. 111-6 at 44-47.

The alternative factual conclusions urged by Xu would require a jury to engage in a very large measure of speculation. But "[s]peculation does not create a genuine issue of fact." Cordoba v. Dillard's, Inc., 419 F.3d 1169, 1181 (11th Cir. 2005) (quotation omitted). It follows that there could not have been a fraudulent omission (or affirmative misrepresentation) at the time of sale.

D. Representations to the NHTSA ODI

Addressing the next aspect of Xu's fraudulent concealment theory, PCNA argues that there is no evidence of fraudulent concealment related to the NHTSA Office of Defects Investigation's (ODI) investigation of similar coolant leaks in Porsche 911s. In 2013, while Porsche AG was investigating the Cooling System Issue, the ODI opened an investigation into coolant leakage from certain Porsche 911 vehicles—that is, into the issue that Porsche AG had internally investigated in 2007. Plaintiffs suggest that, during this investigation, PCNA fraudulently concealed the Cooling System Issue from the ODI in one of two ways: first, by misleading ODI by failing to inform it about its ongoing investigations and planned countermeasures in the Cayenne and the Panamera; second, by representing in its responses to ODI that the Cooling System Issue in the Subject Vehicles was "fixed." At the motion to dismiss stage, the Court found this theory was plausibly alleged and could support a fraudulent concealment theory under the operative standards. In light of the evidence produced during discovery, the Court finds that this view is no longer tenable.

PCNA made the disputed representations to ODI (the "ODI Responses") on September 17, 2013. (Doc. 76-30.) The record evidence amply supports the contention that, by this time, PCNA knew there was a real issue in the Subject Vehicles' cooling systems. August 2013 documents from the SBT investigations show that, by that date, 2.45% of all Porsche Cayennes sold in the U.S. market had manifested the Cooling System Issue; that relevant spare parts sales indicated an even higher incidence of the issue; and that the cooling system failure rates were only expected to increase over time—with rates in excess of 20% after 48 months for some production intervals. (Doc. 103-26 at 8-10.) Another document from the SBT Point, dated September 17, 2013 (the same date as the responses to ODI), forecasted potentially higher failure rates after 48 months of between 18% and 50%, depending on the production interval. (Doc. 103-14 at 26.) Internal PCNA emails from January 2013 indicate an awareness of thermostat housing failure as a "huge known issue." (Doc. 103-24 at 2.) At least by the summer of 2013, unlike at the time of the sale of Xu's vehicle, there is sufficient evidence to support a finding that PCNA knew of a potential defect in the Subject Vehicles.

At this point in time, then, PCNA's knowledge of a defect is not at issue. After the sale of the car was complete, however, a mere failure to inform Xu about the Cooling System Issue would not amount to fraudulent concealment. For the duty to disclose a material fact derives from "some sort of transaction between the parties." LiMandri, 60 Cal. Rptr. 2d at 543 (citing Goodman, 134 Cal.Rptr. 375, 556 P.2d at 745; Warner Constr. Corp., 85 Cal.Rptr. 444, 466 P.2d at 1001). The question thus becomes whether Xu can point to any "affirmative deceptive conduct" by PCNA aimed at intentionally concealing the information. Long, 10 Cal. Rptr. 3d at 841.

The investigation, as described by ODI, concerned the following subject vehicles: "all MY [model year] 2001 through 2007 Porsche 911 models manufactured for sale or lease in the United States or federalized territories." (Doc. 102-39 at 2.) This investigative scope is reiterated in each of the ODI documents cited by the parties.¹⁸ (Id.; Doc. 76-30 at 2; Doc. 76-29 at 2). ODI described the "subject components" as "all press fit and glued coolant pipes used as inlet or outlet hose fittings in the cooling systems of the subject and peer vehicles." (Id. at 3.) The scope of this investigation is undisputed. (Doc. 111-6 at 60, ¶ 62.)

18 In ODI's letter notifying PCNA of the investigation, a separate class of "peer vehicles "was described in addition to the subject vehicles. This class comprised "all MY 2008 through 2011 Porsche 911 models manufactured for sale or lease in the United States or federalized territories." (Doc. 102-39 at 2.)

As part of the investigation, PCNA was asked to provide information to ODI. The relevant questions and responses are as follows:

[Q:] 10. Describe all modifications or changes made by, or on behalf of, Porsche in the design, material composition, manufacture, quality control, supply, or installation of the subject components, from initial design and development to date, which relate to, or may relate to, the alleged defect . . . .

Also, provide the above information for any modification or change that Porsche is aware of which may be incorporated into vehicle production within the next 120 days.

[A:] 10. On January 25, 2008, Porsche's supplier introduced the use of an automated metering device for application of adhesive on pipe adapters. The automated metering device was introduced to ensure a more uniform and consistent application of adhesive to the joints prior to assembly, and was introduced in response to the 2007 analysis described in our response to Request 9. For a detailed description of the production change notice to the glue application process please refer to the file "10-1.pdf" located in folder "10" on the enclosed CD. For a detailed illustration of the affected components please refer to file "10-2.pdf" located in folder "10" on the enclosed CD.

There are no plans for further modifications or changes.

. . .

[Q:] 13. Provide the following information regarding the subject components:

. . .

c. Also identify by make, model and model year, any other vehicles of which Porsche is aware that contain the identical coolant pipe connection method (adhesive), whether installed in production or in service, and state the applicable dates of production or service usage[.]

. . .

[A:] 13c. Model year 2011-2014 Cayenne (all models).

Model year 2010-2014 Panamera (all models).

(Doc. 76-30 at 5, 12-13.)

PCNA argues that these disclosures are truthful and are not evidence of any affirmative deceptive conduct. Xu contends that they are deceptive because PCNA, despite its knowledge of the Cooling System Issue and its plans to implement a countermeasure to the Cayenne and Panamera cooling systems, falsely told ODI that "any issue with the adhesive design was fixed in 2008 when its parts supplier implemented a manufacturing change." (Doc. 101 at 14.) But the passages just quoted cannot support Xu's interpretation. The Court finds that these disclosures are not "deceptive conduct" as a matter of law.

These conclusions follow from the fact that, given the terms of the investigation, PCNA gave truthful responses to the questions it was asked. The portion of the document that Xu characterizes as false describes the manufacturing countermeasure that Porsche AG implemented in 2008 with respect to the model 911s, and it states that "[t]here are no plans for further modifications or changes." (Doc. 76-30 at 5.) Xu is correct that, at this time, Porsche AG was planning to implement a design change to its Cayennes and Panameras to replace the adhesive connections with screwed and bolted connections. But those are the Subject Vehicles of Xu's case, not the "subject vehicles" of the ODI investigation. ODI's "subject vehicles" are clearly defined as consisting only of Porsche 911s, and PCNA was clear that its responses pertain only to 911s. (See Doc. 102-39 at 2; Doc. 76-39 at 2.) ODI did not ask a question that could reasonably be understood to require PCNA to disclose anything about its Cayennes or Panameras. Nor does Xu point to any evidence that the 911 countermeasure was ineffective.¹⁹

19 It does, however, make this argument in its motion for class certification, where it states that "Porsche acknowledged that the January 2008 manufacturing change did not work." (Doc. 87 at 15.) But the record evidence it cites to in support does not make a genuine issue of this. Reading it in the light most favorable to Plaintiff, the cited text says that Porsche AG observed four cases of coolant socket debonding in Porsche 911 GT3 models "after action on 01/21/2008." Assuming that action means the 911 manufacturing countermeasure, four failures in four years does not support an inference that PCNA knew the 911 countermeasure was ineffective. As for the other piece of record evidence cited at this point in the class certification motion, it does not appear relevant to the success of the 911 countermeasure. (Doc. 87-19.)

And where ODI did ask for such information—as when it asked whether other Porsche cars used an identical connection method in their cooling systems—PCNA answered truthfully. It provided the names and model years of the Subject Vehicles. (Doc. 76-30 at 12-13.) As far as the record shows, ODI did not follow up about the Subject Vehicles, and PCNA did not make any other representations, let alone misrepresentations, about them.

PCNA's ODI responses therefore cannot amount to "actual fraud," for there were no "active misrepresentations" or "purported disclosures which actually suppress material facts." Baker v. Beech Aircraft Corp., 39 Cal.App.3d 315, 114 Cal. Rptr. 171, 177 (1974). They are not the former because they do not contain false statements; they cannot be the latter because they do not purport to disclose anything about vehicles other than certain Porsche 911 models.

For the Court to find fraudulent concealment here—on what is really an omission rather than an affirmative deceptive act—the Court would have to find that PCNA was under a duty to tell ODI the information it knew about the Cayennes and Panameras—even where it was not asked about them—because those cars were suffering from a similar coolant leak issue. See Kimball v. P. Gas & Elec. Co., 220 Cal. 203, 30 P.2d 39, 45 (1934) ("Mere silence on the part of the two companies would not constitute, under well-settled principles, a fraudulent concealment . . ."); Baker, 114 Cal. Rptr. at 177 (holding that where there is no legal "relationship imposing a duty to speak, actual fraud will estop the defense of the statute of limitations") (emphasis in original); Long, 10 Cal. Rptr. 3d at 841; Herremans v. BMW of N.A., LLC, CV-14-02363-MMM-PJWX, 2014 WL 5017843, at *5 (C.D. Cal. Oct. 3, 2014). But Xu has not shown the Court where such a duty might be found in the law, and the Court is powerless create one in order to avoid sanctioning conduct that is perhaps tight-lipped, but is not fraud. PCNA's responses to ODI cannot support Xu's theory of fraudulent concealment.

E. Concealment from or by Authorized Service Technicians

Xu's next argument is that PCNA "withheld information from its authorized service technicians . . . so that the existence of a defect could not be relayed." (Doc. 100 at 15.) In support of this argument, Xu points to the fact that PCNA did not issue any bulletins to its authorized technicians about the Cooling System Issue, something it sometimes does with respect to technical issues. Once again, however, this would not amount to an affirmative misrepresentation, as the Court has not been shown that PCNA is under a legal duty to issue service bulletins to its authorized technicians. "Absent a fiduciary relationship, nondisclosure is not fraudulent concealment—affirmative deceptive conduct is required." Herremans, 2014 WL 5017843, at *5 (citing Long, 10 Cal. Rptr. 3d at 841).²⁰

20 Plaintiffs cite to one document that they argue shows PCNA falsely claiming to have no information on the Cooling System Issue in response to a January 2013 query from a technician. (Doc. 100 at 15 (citing Doc. 103-34).) But the denial of knowledge in the document only pertains to a problem with a given vehicle's cooling fan, which appears to have occurred after the thermostat housing was replaced. (Doc. 103-34.) PCNA's response to the technician troubleshoots possible approaches to the cooling fan malfunction—a problem that was separate from and arose after the coolant leak had been addressed. One cannot reasonably infer from this exchange that PCNA withheld information about the Cooling System Issue.

Finally, Xu's alternative theory about misrepresentations made to him by authorized Porsche technicians or dealerships is also without merit. This is so regardless of the viability of the agency theory that underpins them. Any such representations occurred in 2019, after his own car manifested the cooling system issue, long after the limitations period for Xu's implied warranty claims had already expired. The same is true of any misrepresentations made to Xu at this time by PCNA itself. If the statute of limitations had not previously been tolled—as the Court has found it was not—then it expired in 2015. Whether any acts of fraudulent concealment in 2019 might have tolled that statute of limitations is, therefore, a question without sense. Once a limitations period has run, there is nothing left to toll. See Sibley v. Culliver, 377 F.3d 1196, 1204 (11th Cir. 2004).

F. PCNA is Entitled to Summary Judgment on all of Xu's Claims

All of Xu's claims fail without equitable tolling of the relevant statutes of limitations.²¹ Because Xu's evidence cannot support his theory of fraudulent concealment, all of Xu's state-law claims are time-barred and his Magnuson-Moss claim fails without a viable state law claim. PCNA is entitled to summary judgment as to each of Xu's claims.

21 See Part IV(A) supra.

V. Motion for Summary Judgment as to Plaintiff Vaz-Pocas

Under New Jersey law, the time in which implied warranty claims may be brought can be limited by the terms of a manufacturer's express warranty. See, e.g., Amato v. Subaru of Am., Inc., No. CV 18-16118, 2019 WL 6607148, at *7 (D.N.J. Dec. 5, 2019); Alban v. BMW of N.A., LLC, No. CIV 09-5398 DRD, 2010 WL 3636253 at *9 (D.N.J. Sept. 8, 2010). Neither party disputes this precept. At the motion to dismiss stage, this Court noted that Plaintiff Vaz-Pocas purchased his used Cayenne after its original express warranty had expired (both in terms of its time and milage limitations), but the Court inferred from the allegations that Vaz-Pocas had purchased an extended warranty at the time he bought the car. Discovery has revealed that, as a matter of undisputed fact, Vaz-Pocas was offered the chance to purchase an extended warranty but chose not to do so. (Doc. 112-1 at 4-5, ¶ 10-11.) The New Car Limited Warranty (NCLW) applicable to Vaz-Pocas' car provided that "[a]ny implied warranties, including the implied warranties of merchantability and fitness for a particular purpose, are limited to the duration of the written warranty." (Doc. 78-7 at 8.) The written warranty's duration was "four (4) years or 50,000 miles, whichever comes first." (Id. at 9.) Vaz-Pocas' vehicle was originally purchased on February 13, 2012, so the NCLW expired on February 13, 2016. (Doc. 112-1 at 2-3, ¶¶ 4, 7.) PCNA therefore asserts that it is entitled to summary judgment on Vaz-Pocas' remaining implied warranty and MMWA claims.

Vaz-Pocas argues, however, that the NCLW's "time and duration limitation is unconscionable as applied to Vaz-Pocas' implied warranty claim." (Doc. 101 at 16.) In response, PCNA contends, first, that Vaz-Pocas "lacks standing" to challenge the enforceability of the NCLW, given that he was never a party to the contract, which expired by its terms before Vaz-Pocas acquired his car. Second, PCNA argues that even if Vaz-Pocas can raise an unconscionability defense to the contract's time and mileage limitation, the limitation could not be found unconscionable as a matter of law. The Court concludes that Vaz-Pocas has standing to raise an unconscionability defense to the contract being enforced against him, but that the provision is not unconscionable as a matter of law.

A. Vaz-Pocas' Standing to Raise an Unconscionability Defense to the NCLW

In support of its standing argument, PCNA cites a handful of cases in which district courts have held that plaintiffs who bought used vehicles after the expiration of their original warranties lack standing to challenge the limitations periods of those warranties. See Baranco v. Ford Motor Co., 294 F. Supp. 3d 950, 973 n.21 (N.D. Cal. 2018); Tomassini v. FCA U.S. LLC, No. 3:14-CV-1226 MAD/DEP, 2015 WL 3868343, at *10 (N.D.N.Y. June 23, 2015); In re Ford Motor Co., Spark Plug & 3-Valve Engine Prods. Liab. Litig., No. 1:12-md-2316, 2014 WL 3778592, *35-36 (N.D. Ohio July 30, 2014); Perez v. Volkswagen Group of Am., Inc., No. 2:12-CV-02289, 2013 WL 1661434, at *5 (W.D. Ark. Apr. 17, 2013). Like most of the law the parties have cited on this question, these cases are only persuasive authority in this dispute, which arises out of New Jersey law.

Vaz-Pocas contends that these cases are distinguishable because they involved plaintiffs who challenged the time/mileage limitations as restrictions on express rather than implied warranty claims. He relies in part on the Fourth Circuit case of Carlson v. Gen. Motors Corp., 883 F.2d 287, 295-96 (4th Cir. 1989), for the proposition that this express/implied distinction is pertinent to the Court's analysis. The Court agrees with Vaz-Pocas that this distinction should matter, but not for the reasons that Carlson says. The Carlson court did distinguish between implied and express warranties, but it did so in the context of an analysis of the Magnuson-Moss Warranty Act, whose text applies different language to limitations on express and implied warranties. See 15 U.S.C. § 2308(b) ("For purposes of this chapter . . . implied warranties may be limited in duration to the duration of a written warranty of reasonable duration, if such limitation is conscionable . . . [.]"); Carlson, 883 F.2d at 295 (noting that "the crucial distinction is that drawn by the express terms of § 2308 between the 'reasonableness' of limitations on express warranties and the 'conscionability' of accompanying limitations on implied warranties"). The Carlson court was concerned with this different statutory treatment, which is not relevant here.

Vaz-Pocas' better argument is that each of PCNA's cases involved a plaintiff who "was never a party to or beneficiary of the original warranty. Tomassini, 2015 WL 3868343, at *10. In each of the cases cited above, plaintiffs sought to challenge the enforceability of the time limitation on a warranty in order to revive the agreement so that they could claim breaches of its express terms. In other words, those plaintiffs sought to challenge a limitation on contractual rights that, as post-expiration purchasers, they never had. But implied warranties are creatures of law, not of the bilateral relationship between contracting parties. See Collins v. Uniroyal, Inc., 64 N.J. 260, 315 A.2d 16, 23 (1974) (Clifford, J., dissenting) ("The implied warranty of merchantability is imposed on the seller as a matter of law—not as a matter of agreement as in express warranties—and constitutes the fundamental protection of the consumer under the Code."). Vaz-Pocas' right to bring an implied warranty claim cannot be restricted by the NCLW unless he is in some sense a party to it. New Jersey law recognizes—as both parties here implicitly do—how warranty agreements can both bind subsequent purchasers and give them rights against a car manufacturer from whom they did not originally purchase a vehicle. Warranties can do so because subsequent purchasers are anticipated potential beneficiaries of the warranty agreement "within the distributive chain." Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69, 100 (1960); see also Ryan v. Am. Honda Motor Co., Inc., 186 N.J. 431, 896 A.2d 454 (2006) (lessee of car "as the assignee of the dealer's warranty, is entitled to enforce the warranty under New Jersey law"); Miller Auto Leasing Co. v. Weinstein, 189 N.J.Super. 543, 461 A.2d 174, 176 (1983), aff'd o.b., 193 N.J.Super. 328, 473 A.2d 996, certif. denied, 97 N.J. 676, 483 A.2d 192 (1984) (describing new car warranty obligations as having been "given directly by the manufacturer through [the dealer] to the ultimate consumers").

In most cases, this legal principle protects consumers, who get the benefit of warranty obligations despite not being in immediate vertical privity with the manufacturers. But where a warranty also restricts a customer's rights—as the NCLW does by imposing a limitation on the time in which implied warranty claims may be brought—the fact that the "ultimate consumers" are beneficiaries of the warranty also benefits the manufacturer. However, this being the case, the manufacturer cannot assert both that a purchaser like Vaz-Pocas is bound by a term of the warranty and that he has no standing to challenge the warranty's enforceability.

The upshot is that a car manufacturer cannot use a warranty agreement to limit rights created by law—i.e., rights not created by the warranty agreement itself—and then be heard to argue that the person so limited is "without standing" to challenge the enforcement of the agreement limiting his rights. This is the vital distinction between Vaz-Pocas' unconscionability argument and those rejected by the courts in PCNA's cases. If Vaz-Pocas' ability to bring an implied warranty claim can be limited by the NCLW, it is because the NCLW has restricted his legal rights in some way. It is, in other words, because he is a beneficiary of the NCLW. He therefore has standing to assert that its terms enforced against him are unconscionable.²²

22 If Vaz-Pocas were both bound by the NCLW's implied warranty limitation but also a non-party to the contract, it would imply that manufacturers could use bilateral warranty agreements to alter the general law of implied warranty.

B. The Unconscionability of the Implied Warranty Time/Mileage Limitation

This brings the Court to the unconscionability analysis itself. Under the Uniform Commercial Code ("U.C.C.")—as adopted in New Jersey—the question of whether a contractual provision is unconscionable "is a matter of law to be determined by the court." Monsanto Co. v. Alden Leeds, Inc., 130 N.J.Super. 245, 326 A.2d 90, 94 (1974); N.J. Stat. Ann. § 12A:2-302.

Under New Jersey law, courts look to the circumstances surrounding the formation of a contract to determine whether procedural or substantive unconscionability exists. Sitogum Holdings, Inc. v. Ropes, 352 N.J.Super. 555, 800 A.2d 915, 921 (2002). "The 'basic test' for unconscionability is 'whether, in light of the general commercial background and the commercial needs of the particular trade or case, the clauses involved are so one-sided as to be unconscionable under the circumstances existing at the time of the making of the contract.' " Ponzio v. Mercedes-Benz USA, LLC, 447 F. Supp. 3d 194, 255 (D.N.J. 2020) (quoting U.C.C. § 2-302). Facts suggesting that the bargaining process was fundamentally unfair or that the resulting contractual provision is "so one-sided as to shock the court's conscience" would support a finding of unconscionability. Sitogum Holdings, 800 A.2d at 921. Whether a manufacturer "had knowledge of a defect at the time it issued a warranty" may be relevant to the fairness of the bargaining process, but such knowledge alone "does not make a time/mileage limitation on an implied warranty unconscionable." In re Porsche Cars N.A., Inc., 880 F. Supp. 2d 801, 821-22 (S.D. Ohio 2012) (citing Henderson v. Volvo Cars N. Am. LLC, No. 09-4146, 2010 WL 2925913, at *9 (D.N.J. July 21, 2010)); Carlson, 883 F.2d at 294-97; Ponzio v. Mercedes-Benz USA, LLC, 447 F. Supp. 3d 194, 255-58 (D.N.J. 2020).

Vaz-Pocas relies on two cases in which courts held that unconscionability of a warranty limitation can be shown if a manufacturer both knew about a latent defect and "manipulated the warranty terms to avoid paying for it." Skeen v. BMW of N. Am., Ltd. Liab. Co., No. 2:13-cv-1531-WHW-CLW, 2014 WL 283628, at *14 (D.N.J. Jan. 24, 2014); see also Gelis v. Bayerische Motoren Werke Aktiengesellschaft, No. 2:17-CV-07386, 2018 WL 6804506, at *6-*7 (D.N.J. Oct. 30, 2018). But Vaz-Pocas' unconscionability argument must fail, even under this standard. He can point to no evidence of "manipulation" of the warranty's terms preceding the original sale of his vehicle on February 13, 2012.

PCNA has introduced undisputed evidence that the NCLW's four-year/50,000-mile limitation on express and implied warranty claims has been unchanged since the 1999 model year. (Doc. 78-8.) Vaz-Pocas argues that the word "manipulation" in this context "does not mean redrafting of the warranty." (Doc. 101 at 20.) Instead, he contends that it is enough if a manufacturer knew about a defect and "provided . . . misleading information intentionally to buy time until after they were no longer obligated by the warranty to make the necessary repairs." Skeen, 2014 WL 283628, at *15; see also In re Volkswagen Timing Chain Prod. Liab. Litig., No. CV 16-2765 (JLL), 2017 WL 1902160, at *11-*12 (D.N.J. May 8, 2017). The Court cannot see how, as a matter of ordinary meaning, "manipulated the warranty terms," Skeen, 2014 WL 283628, at *14, can meaning anything but an alteration of the warranty terms themselves. It appears that the plaintiffs in Skeen, In re Volkswagen, and Gelis did allege such manipulation. See, e.g., Gelis, 2018 WL 6804506, at *6-*7 (D.N.J. Oct. 30, 2018) ("While a [five years or 40,000 miles] warranty provision is not facially unconscionable, the terms do "shock the conscience" if, as is sufficiently alleged, BMW set them with specific knowledge that class engines would fail after the end of the warranty period but before the vehicle's expected useful life.") (emphasis added). In any event, subsequent cases do not support Vaz-Pocas' construction of "manipulation." They rather contradict it. In Merkin v. Honda N.A., Inc., the court, citing Skeen and In re Volkswagen, found "fatal Plaintiff's failure to allege any facts demonstrating Defendants' manipulation of warranty coverage to avoid paying for replacement parts." No. 17-CV-03625-PGS-DEA, 2017 WL 5309623, at *5 (D.N.J. Nov. 13, 2017). And in Ponzio v. Mercedes-Benz USA, LLC, the court rejected an argument almost identical to Vaz-Pocas'. 447 F. Supp. 3d 194 (D.N.J. 2020). There, the plaintiffs contended that the defendant's "pre-sale knowledge, and subsequent concealment, of the Paint Defect further supports unconscionability . . . . [W]here a defendant has pre-sale knowledge of a defect, any attempt to impose limitations or uphold disclaimers is unconscionable." Id. at 255. The court rejected this argument. It cited Skeen and In re Volkswagen, but it observed that "courts in this district and those in each named Plaintiff's state, have found that merely alleging that a defendant knew of a defect, and knew that defect would arise after the time limitations of a warranty, but concealed that information, without more, fails to establish unconscionability." Id. at 257 (emphasis in original).²³

23 Vaz-Pocas also relies on Carlson v. Gen. Motors Corp., 883 F.2d 287, 293 (4th Cir. 1989), but this case does not support his unconscionability argument any more than the others. Like the other cases, it suggests that pre-sale knowledge of a defect may be relevant to procedural unconscionability but is insufficient for establishing it. This is the reading that the Fourth Circuit itself has applied to Carlson in subsequent cases. See Hart v. Louisiana-Pac. Corp., 641 F. App'x 222, 228 (4th Cir. 2016) (noting that it does not read Carlson to stand "for the broad proposition that the terms of a warranty are necessarily substantively unconscionable solely because one party conceals certain information during the bargaining process"); see also Ponzio, 447 F. Supp. 3d at 256 (making the same points).

Without grounds to argue that PCNA manipulated the warranty's terms, Vaz-Pocas is without legal support for his argument that the NCLW's time/milage limitation on implied warranty claims is unconscionable. The procedural circumstances allegedly present here—a disparity in bargaining power between the parties, PCNA's superior knowledge of the alleged defect, and the fact that the NCLW is a contract of adhesion—were present in all of the cases discussed above, but they were not in themselves sufficient, without some sort of manipulation of the warranty terms, to give rise to a finding of procedural unconscionability. The same result is due here.

Nor can the Court say that, in light of the entire record, the substance of the four-year, 50,000-mile implied warranty limitation period is "so one-sided as to shock the court's conscience." Sitogum Holdings, 800 A.2d at 921. The Court's thinking on this point is guided by Abraham v. Volkswagen of Am., Inc., 795 F.2d 238 (2d Cir. 1986), a frequently cited case. In Abraham, the Second Circuit reasoned that

virtually all product failures discovered in automobiles after expiration of the warranty can be attributed to a 'latent defect' that existed at the time of sale or during the term of the warranty. All parts will wear out sooner or later and thus have a limited effective life. Manufacturers always have knowledge regarding the effective life of particular parts and the likelihood of their failing within a particular period of time. Such knowledge is easily demonstrated by the fact that manufacturers must predict rates of failure of particular parts in order to price warranties and thus can always be said to "know" that many parts will fail after the warranty period has expired. A rule that would make failure of a part actionable based on such "knowledge" would render meaningless time/mileage limitations in warranty coverage.

Abraham, 795 F.2d at 250. Many courts, including those in this district, have endorsed this reasoning. See Ponzio, 447 F. Supp. 3d at 255 n.23, 257 (collecting cases); McCabe v. Daimler AG, 948 F. Supp. 2d 1347, 1359 (N.D. Ga. 2013). In McCabe, the court held, based in part on Abraham's reasoning, that a defendant car manufacturer's "knowledge of the alleged defect at the time of sale, standing alone, is insufficient to render a [new car limited warranty's] time and mileage limitations unconscionable." McCabe, 948 F. Supp. 2d at 1359. Here, the Court is compelled to the same conclusion with respect to the NCLW's limitation of the implied warranty of merchantability. The limitation does not shock the conscience of the Court. PCNA is entitled to summary judgment on Vaz-Pocas' implied warranty claim, which is barred by the limiting provision of PCNA's New Car Limited Warranty.

C. Vaz-Pocas' MMWA Claim

Like Plaintiff Xu, Vaz-Pocas is left without a viable state law warranty claim, and thus PCNA is also entitled to summary judgment on his claim under the MMWA.²⁴

24 See Part IV(A) supra.

VI. Class Certification and Related Motions

A. Plaintiffs' Motion for Class Certification

Defendant PCNA moved for summary judgment prior to the Plaintiffs' motion for class certification. Although class certification is an issue to be decided "as soon as practicable," Fed. R. Civ. P. 23(c)(1), the practice of moving for summary judgment prior to certification in a putative class action is an accepted one, and it is within the Court's discretion to consider the summary judgment motion first. See Telfair v. First Union Mortg. Corp., 216 F.3d 1333, 1343 (11th Cir. 2000) ("It was within the court's discretion to consider the merits of the claims before their amenability to class certification."). "[T]he district court is not required to resolve [a plaintiff's] class certification request before resolving a challenge to [the plaintiff's] individual claim." Wooden v. Bd. of Regents of U. System of Georgia, 247 F.3d 1262, 1289 (11th Cir. 2001).

In the Eleventh Circuit, however, a district court is not absolved from the obligation to address a pending class certification motion by its grant of summary judgment, for "a plaintiff's capacity to act as representative of the class is not ipso facto terminated when he loses his case on the merits." See Martinez-Mendoza v. Champion Intern. Corp., 340 F.3d 1200, 1215-16 (11th Cir. 2003). But the subsequent certification analysis becomes simple where the individual plaintiffs do not have viable cases. Even assuming arguendo that the proposed classes would meet all other requirements of Rule 23(a) and of Rule 23(b)(3), the named plaintiffs become obviously inadequate representatives of the interests of the proposed classes when they themselves have no viable claims. See Wooden, 247 F.3d at 1289 ("If the district court were to resolve a summary judgment motion in Defendants' favor and in so doing dismiss Green's individual claim before ruling on class certification, then Green would not be an appropriate class representative."); Bailey v. Rocky Mt. Holdings, LLC, 889 F.3d 1259, 1266 n.12 (11th Cir. 2018) (observing that given its affirmance of summary judgment against the plaintiffs, the court "need not reach" the trial court's denial of class certification); Telfair, 216 F.3d at 1343. A proposed class representative "must adequately protect the interests of those he purports to represent," In re Equifax Inc. Customer Data Sec. Breach Litig., 999 F.3d 1247, 1275 (11th Cir. 2021), and obviously he cannot do so if his individual case fails.²⁵ See Wooden, 247 F.3d at 1289; Henley v. Turner Broad. System, Inc., 267 F. Supp. 3d 1341, 1357 (N.D. Ga. 2017) ("When a named plaintiff has no cognizable claim for relief, she cannot represent others who may have such a claim, and her bid to serve as a class representative must fail.").

25 Cf. Robinson v. Sheriff of Cook County, 167 F.3d 1155, 1157 (7th Cir. 1999) (Posner, J.) ("One whose own claim is a loser from the start knows that he has nothing to gain from the victory of the class, and so he has little incentive to assist or cooperate in the litigation[.]").

That these plaintiffs are inappropriate class representatives is especially evident here, where the grounds for the grants of summary judgment do not go to the merits of this products liability case but depend on affirmative defenses. Xu faces a statute of limitations defense against which he, in turn, seeks to defend by invoking the doctrine of fraudulent concealment. This tolling issue is indeed, as Plaintiffs note, one that might be common to some members of the proposed classes. (Doc. 116 at 6-7.) For any such class, deciding this issue would probably depend on the question of when PCNA had sufficient knowledge to make its failure to disclose the Cooling System Issue a fraudulent omission—something the Court has considered here with respect to Xu.²⁶ But the Court found that there is insufficient evidence to create a jury question on that issue at the time relevant to Xu—the time his car was delivered. Assuming the truth of Plaintiffs' allegations and the satisfaction of Rule 23's other requirements, the class members with viable claims would be those without statute of limitations problems or with viable tolling defenses—in other words, those who purchased their cars after whatever time the evidence might be sufficient to create a genuine issue of whether PCNA had knowledge of the alleged defect. Xu is on the wrong side of this line. That makes him an inadequate representative of the proposed class.

26 See Part IV(C) above.

Something similar can be said about Vaz-Pocas, whose claim fails because of a defense available to PCNA based on the car's original warranty and Vaz-Pocas' decision not to purchase an extended warranty. His unconscionability defense fails as a matter of law. His claim being thus barred, he would be an inappropriate representative of any class of New Jersey Porsche owners.

To be clear, the Court does not make any determination here that the proposed classes satisfy or do not satisfy the requirements of Rule 23, except in the specific sense that the named plaintiffs are "not . . . appropriate class representative[s]" for the reasons described. Wooden, 247 F.3d at 1289.²⁷ In other words, the Court merely explains why, given that Plaintiffs' individual claims are due for dismissal, the pending Motion for Class Certification (Doc. 86) must be DENIED.

27 It has been recognized that part of the cost to a defendant of moving for summary judgment before class certification is that the defendant loses the protection against later suits that would be afforded by a post-certification victory on the merits. See Cowen v. Bank United of Texas, FSB, 70 F.3d 937, 941-42, (7th Cir. 1995) (stating that the "defendant loses the preclusive effect on subsequent suits against him of class certification but saves the added expense of defending a class action and may be content to oppose the members of the class one by one"); Toben v. Bridgestone Retail Operations, LLC, 751 F.3d 888, 896 (8th Cir. 2014); Berenson v. National Financial Services LLC, 485 F.3d 35, 44 (1st Cir. 2007). The Rule 23 Advisory Committee Notes also recognize this tradeoff. See Fed. R. Civ. P. 23(c)(1)(A) 2003 Amendments ("Other considerations may affect the timing of the certification decision. The party opposing the class may prefer to win dismissal or summary judgment as to the individual plaintiffs without certification and without binding the class that might have been certified.").

B. Related Motions to Exclude

Finally, both parties sought to introduce expert declarations in connection with their briefing on the motion for class certification, and both parties moved to exclude the other's expert. Given the grounds of the Court's ruling on class certification, nothing in either expert report has any bearing on our decision. Defendant's Motion to Exclude the Declaration of Murat Okcuoglu (Doc. 96) and Plaintiffs' Motion to Exclude the Joint Expert Report of Mark A. Gustafson and Bruce A. Strombom, Ph.D. (Doc. 118) are therefore DENIED AS MOOT.

VII. Conclusion

For the foregoing reasons, Defendant's Motion for Summary Judgment as to Claims Asserted by Plaintiff Michael Xu (Doc. 76) and Motion for Summary Judgment as to Claims Asserted by Plaintiff Daniel Vaz-Pocas (Doc. 78) are GRANTED. Defendant PCNA is entitled to summary judgment on all of Plaintiffs' claims.

In addition, Plaintiffs' Motion for Class Certification (Doc. 86) is DENIED. Plaintiffs' Motion to Exclude the Expert Report of Jericho Moll, Ph.D. (Doc. 117) is DENIED, and their Motion to Exclude the Joint Expert Report of Mark A. Gustafson and Bruce A. Strombom, Ph.D. (Doc. 118) is DENIED AS MOOT. Defendant's Motion to Exclude the Declaration of Murat Okcuoglu (Doc. 96) is also DENIED AS MOOT.

SO ORDERED this 17th day of January, 2023.