Richey v. Axon Enterprises, Inc.

[2] 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 * * * 6 DOUGLAS RICHEY, Case No. 3:19-cv-00192-MMD-CLB 7 Plaintiff, ORDER v. [8] 9 AXON ENTERPRISES, INC, 10 Defendant. [11] 12 I. SUMMARY 13 This action stems from a dispute relating to the alleged defective design of certain 14 models of conducted electrical weapons (“CEWs”) manufactured by Defendant Axon 15 Enterprises, Inc. (“Axon”). Before the Court is Axon’s motion to dismiss (“Motion”) Plaintiff 16 Douglas Richey’s complaint asserting federal and state law claims (“Complaint”) (ECF 17 No. 1). (ECF No. 29.) For the reasons discussed below, the Motion is granted in part and 18 denied in part. 19 II. BACKGROUND 20 The following background facts are adopted from the Complaint. 21 Axon, formerly Taser International, Inc., manufactures CEWs (also known as 22 “Tasers”). (ECF No. 29 at 10.) Axon has developed the Pulse, X2, and X26P models of 23 CEWs, and has previously manufactured the now discontinued C2 model of CEW. (Id.) 24 Each of Axon’s CEW models are covered with an express limited warranty (“Warranty”). 25 (ECF No. 1 at 9; ECF No. 29 at 10.) The Warranty represents that the models will be “free 26 from defects in workmanship and materials for a period of ONE (1) YEAR from the date 27 of receipt.” (Id.) The Warranty also provides that if the company receives a “valid warranty 28 claim” within the warranty period, Axon will “repair or replace the product” and that Axon’s 2 product, at [Axon’s] discretion.” (ECF No. 1 at 9; ECF No. 29 at 10.) 3 In 2016, Richey purchased a C2 model CEW from Axon. (ECF No. 1 at 6.) In 4 October of that year, Richey fired the weapon, but it malfunctioned when the prongs 5 ejected only one to two feet. (Id.) Richey then notified Axon customer service of the issue. 6 (Id.) Axon shipped a Pulse model CEW to Richey at his home in Corte Madera, CA as a 7 replacement for his malfunctioning model. (ECF No. 29-1 at 7.)1 On January 18, 2017, 8 while the safety switch on the CEW was in the “safe” position, the CEW discharged in 9 Richey’s pocket without him pulling the trigger. (ECF No. 1 at 6.) The barbs of the CEW 10 stuck into Richey’s jacket but, while he had to rip his jacket pocket to free the barbs, he 11 was not personally harmed in the incident. (Id.) 12 After inspecting the device, Richey determined that the safety mechanism had 13 become disengaged. (Id. at 6–7.) Specifically, Richey confirmed that the safety 14 mechanism could be disengaged from the “safe” position to the “armed” position by 15 moving the safety lever only a fraction of the way up with little pressure applied. (Id.) That 16 same day, Richey contacted Axon’s customer service, informing them of the misfire. (Id. 17 at 8.) On January 26, 2017, an Axon representative told Richey that “our engineers are 18 currently aware of the safety switch activation [issue] and are working on a solution.” (Id.) 19 While Axon offered to send Richey two replacement barb cartridges, Axon did not repair 20 or replace Richey’s Pulse CEW. (Id.) On February 22, 2017, counsel for Richey sent a 21 letter (“Letter”) to Axon informing it of the defective safety mechanism in the Pulse, X2 22 and X26P CEWs. (Id. at 20–24.) To date, Axon has not repaired or replaced Richey’s 23 Pulse model CEW. (Id. at 10.) 24 On June 25, 2018, Richey filed a putative class action complaint in the United 25 States District Court for the Northern District of California (“California Complaint”). (EFC 26 No. 29-1.) On August 9, 2018, Richey voluntarily dismissed the California Complaint. [27] 1The Court takes judicial notice of Richey’s complaint regarding these same facts 28 filed in the Northern District of California. See Fed. R. Evid. 201; see also infra Section 2 X26P models suffered from a design defect that caused the CEWs to accidentally arm 3 and discharge. (ECF No. 1 at 9.) Richey asserted the following claims against Axon: 4 violation of the federal Magnuson-Moss Warranty Act (“the Act”); fraudulent omission; 5 unjust enrichment; and violation of the Nevada Deceptive Trade Practices Act (“NDTPA”). 6 (ECF No. 1.) On July 8, 2019, Axon moved to dismiss all of Richey’s claims under Federal 7 Rules of Civil Procedure 12(b)(1) and (b)(6). (ECF No. 29.) 8 III. LEGAL STANDARDS 9 A. 12 (b)(1) Legal Standard 10 Rule 12(b)(1) allows defendants to seek dismissal of a claim or action for a lack of 11 subject matter jurisdiction. Although the defendant is the moving party in a motion to 12 dismiss brought under Rule 12(b)(1), the plaintiff is the party invoking the court’s 13 jurisdiction. As a result, the plaintiff bears the burden of proving that the case is properly 14 in federal court. See McCauley v. Ford Motor Co., 264 F.3d 952, 957 (9th Cir. 2001) (citing 15 McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936)). Plaintiff’s burden 16 is subject to a preponderance of the evidence standard. See Leite v. Crane Co., 749 F.3d 17 1117, 1121 (9th Cir. 2014). 18 Federal courts are courts of limited jurisdiction. See Owen Equip. & Erection Co. 19 v. Kroger, 437 U.S. 365, 374 (1978). A federal court is presumed to lack jurisdiction in a 20 particular case unless the contrary affirmatively appears. See Stock West, Inc. v. 21 Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir. 1989). 22 “Because subject matter jurisdiction goes to the power of the court to hear a case, it is a 23 threshold issue and may be raised at any time and by any party.” Mallard Auto. Grp., Ltd. 24 v. United States, 343 F. Supp. 2d 949, 952 (D. Nev. 2004) (citing Fed. R. Civ. P. 12(b)(1)). 25 B. 12 (b)(6) Legal Standard 26 A court may dismiss a plaintiff’s complaint for “failure to state a claim upon which 27 relief can be granted.” Fed. R. Civ. P. 12(b)(6). A properly pleaded complaint must provide 28 “a short and plain statement of the claim showing that the pleader is entitled to relief.” 2 Rule 8 does not require detailed factual allegations, it demands more than “labels and 3 conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. 4 Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). “Factual allegations 5 must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to 6 survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a 7 claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 8 U.S. at 570). 9 In Iqbal, the Supreme Court clarified the two-step approach district courts are to 10 apply when considering motions to dismiss. First, a district court must accept as true all 11 well-pleaded factual allegations in the complaint; however, legal conclusions are not 12 entitled to the assumption of truth. Id. at 678. Mere recitals of the elements of a cause of 13 action, supported only by conclusory statements, do not suffice. Id. at 678. Second, a 14 district court must consider whether the factual allegations in the complaint allege a 15 plausible claim for relief. Id. at 679. A claim is facially plausible when the plaintiff’s 16 complaint alleges facts that allow a court to draw a reasonable inference that the 17 defendant is liable for the alleged misconduct. Id. at 678. Where the complaint does not 18 permit the court to infer more than the mere possibility of misconduct, the complaint has 19 “alleged—but it has not show[n]—that the pleader is entitled to relief.” Id. at 679 (alteration 20 in original) (internal quotation marks omitted). When the claims in a complaint have not 21 crossed the line from conceivable to plausible, the complaint must be dismissed. See 22 Twombly, 550 U.S. at 570. 23 While a court generally cannot consider matters beyond the pleadings on a motion 24 to dismiss, the court may consider documents “‘properly submitted as part of the 25 complaint’” and “may take judicial notice of ‘matters of public record.’” Lee v. City of Los 26 Angeles, 250 F.3d 668 , 688–89 (9th Cir. 2001) (internal quotations omitted); see also 27 Mack v. South Bay Beer Distrib., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986), abrogated on 28 other grounds by Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104 (1991) (“[O]n 2 record and doing so does not convert a Rule 12(b)(6) motion to one for summary 3 judgment.”). 4 IV. DISCUSSION 5 Axon seeks dismissal primarily on two grounds. (ECF No. 29.) First, Axon argues 6 that the Court lacks subject matter jurisdiction because Richey lacks standing to bring his 7 claims. (See id.) Second, Axon argues that Richey fails to state a claim upon which relief 8 can be granted. (See id.) The Court will address the threshold argument as to standing 9 first. 10 A. Standing 11 “Article III of the Constitution limits federal courts' jurisdiction to certain Cases and 12 Controversies.” Clapper v. Amnesty Intern. USA, 568 U.S. 398, 408 (2013) (internal 13 citations omitted). “A suit brought by a plaintiff without Article III standing is not a case or 14 controversy, and an Article III federal court therefore lacks subject matter jurisdiction over 15 the suit.” Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174 (9th Cir. 2004) (internal citations 16 omitted); see also Fed. R. Civ. P. 12(b)(1). 17 The “irreducible constitutional minimum” to establish Article III standing requires 18 three elements. See Lujan v. Def. of Wildlife, 504 U.S. 555, 560 (1992). “The plaintiff must 19 have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of 20 the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” 21 Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016). To survive a motion to dismiss, “the 22 plaintiff must clearly allege facts demonstrating each element.” Id. (internal quotations 23 omitted). “In a class action, standing is satisfied if at least one named plaintiff meets the 24 requirements.” Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007). 25 Here, Axon argues that Richey cannot establish standing for the Pulse CEW 26 because he cannot show that he suffered any injury from the model. Additionally, Axon 27 argues that Richey cannot establish standing for the X2 and X26P CEWs because he 28 never purchased those models. The Court addresses each contention in turn. 2 Axon states that Richey has suffered no injury to establish Article III standing 3 because Axon replaced Richey’s initial malfunctioning C2 model CEW with a Pulse model 4 CEW. (ECF No. 29 at 16.) Additionally, Axon points to Richey’s concession that he was 5 not personally harmed from the incident. (ECF No. 29.) Richey responds that an injury for 6 purposes of standing does not require personal harm in the sense that Richey “tased” 7 himself. (ECF No. 36 at 4.) Instead, Richey contends it is sufficient that he could not safely 8 use the replacement Pulse model and that he would not have accepted the replacement 9 if he knew it had a defect. (Id.) Richey is correct. 10 When “plaintiffs spent money that, absent defendants’ actions, they would not have 11 spent”, the plaintiff establishes a “quintessential injury-in-fact”. Maya v. Centex Corp., 658 12 F.3d 1060, 1069 (9th Cir. 2011) (internal quotations omitted). Here, even though Richey 13 received a replacement CEW, he still ultimately paid money to receive that model. 14 Additionally, Richey has alleged that he would not have purchased a CEW if Axon had 15 disclosed that there were defects in its models. (ECF No. 1 at 15.) As such, the Court 16 finds that Richey has sufficiently alleged an injury in fact and has therefore established 17 standing for the Pulse model CEW. 18 2. X2 and X26P Model CEWs 19 Axon next argues that Richey does not have standing to bring a class action for 20 the X2 and X26P model CEWs because he never purchased them. (ECF No. 29 at 13.) 21 Axon acknowledges that there is a split of authority regarding whether a plaintiff has 22 standing to bring claims on behalf of consumers who purchased similar, but not identical 23 products. (ECF No. 29 at 13 n.3.) However, Axon argues that this split is not implicated 24 because Richey has failed to allege that the three models are similar. (Id.) To support 25 their argument, Axon notes that “nowhere in the Complaint does Richey describe the 26 operation or design of the X2 and X26P CEWs or any purported defects in them.” (Id.) 27 Axon is correct that there is a split of authority regarding whether a plaintiff can 28 bring class action claims on behalf of consumers who purchased similar products. See, 2 (“There is no controlling authority on whether Plaintiffs have standing for products they 3 did not purchase.”). One view holds that claims for products not purchased by plaintiffs 4 should be dismissed for lack of standing. See, e.g., Granfield v. NVIDIA Corp., No. C 115 05403 JW, 2012 WL 2847575 , at *6 (N.D. Cal. July 11, 2012) (“[W]hen a plaintiff asserts 6 claims based both on products that she purchased and products that she did not 7 purchase, claims relating to products not purchased must be dismissed for lack of 8 standing.”). Another view holds that the issue is better addressed at the class certification 9 stage instead of the standing stage. See Forcellati v. Hyland's, Inc., 876 F. Supp. 2d 1155 , 10 1161 (C.D. Cal. 2012) (“[The] argument is better taken under the lens of typicality or 11 adequacy of representation, rather than standing.”). 12 However, the majority of courts that have approached this question apply the 13 substantial similarity test to determine if such a plaintiff has standing. See Hain Celestial 14 Grp., 913 F. Supp. 2d at 889–890. Under this test, “a plaintiff may have standing to assert 15 claims for unnamed class members based on products he or she did not purchase so 16 long as the products and alleged misrepresentations are substantially similar.” Id. at 890. 17 Courts have found that factors relevant to this inquiry include “similarity in products, 18 similarity in claims, similarities in injury to consumers.” Ang v. Bimbo Bakeries USA, Inc., 19 No. 13-cv-01196-WHO, 2014 WL 1024182 , at *6 (N.D. Cal. Mar. 13, 2014). Products are 20 substantially similar where “the resolution of the asserted claims will be identical between 21 the purchased and unpurchased products.” Golden v. Home Depot, U.S.A, Inc., No. 22 118CV00033LJOJLT, 2018 WL 2441580 , at *15 (E.D. Cal. May 31, 2018) (internal 23 quotations omitted). 24 This Court finds the reasoning of the majority view persuasive and accordingly 25 adopts the substantial similarity test here. The Court recognizes that this approach 26 accords with the Ninth Circuit’s guidance that 27 [w]hen determining what constitutes the same type of relief or the same kind of injury, we must be careful not to employ too narrow or technical an 28 approach. Rather, we must examine the questions realistically: we must the inquiry. [2] 3 Armstrong v. Davis, 275 F.3d 849, 867 (9th Cir. 2001), overruled on other grounds by 4 Johnson v. California, 543 U.S. 499 , 504–05 (2005). 5 Applying the substantial similarity test to Richey’s claims, the Court concludes that 6 he has met his burden at this stage. Richey alleges that the Pulse, X26 and X26P all have 7 the “same traditional hand gun design.” (ECF No. 1 at 8.) Additionally, Richey points to a 8 2013 investigation of the X2 and X26P model CEWs by Canada’s Defence Research and 9 Development agency.2 (Id.) Richey alleges that this investigation found that the X2 and 10 X26 models had a similar design flaw to the Pulse model that caused the product to 11 unintentionally move to the “Armed” position.3 Richey alleges that all three models have 12 this same design flaw. (Id.) Richey asserts that Axon failed to disclose this design defect 13 in all three models. (Id.) Resolution of the claims for all three models turns on whether 14 Axon took proper action once it became aware of the alleged defect. The Court finds that 15 the Complaint sufficiently alleges that the Pulse, X2 and X26P models are substantially 16 similar. Thus, Richey has established standing for all three models to withstand Axon’s 17 standing challenge. 18 B. Federal Claims 19 Axon argues that Richey’s warranty claims asserted under the Act fail as a matter 20 of law for two reasons. First, Axon contends that the warranty claims are time barred. 21 (ECF No. 29 at 17–18). Richey responds that his claims are not time-barred because the 22 duration of the Warranty is different from the statute of limitations. (ECF No. 36 at 15.) 23 Second, Axon argues that Richey fails to state a claim because he does not allege a 24 violation of the express warranty. (ECF No. 29 at 15). Richey counters that even if he has 25 not sufficiently alleged a violation of the express warranty, his claims can proceed under [26] 2This investigation is incorporated by reference. See supra Section III. [27] 3See Def. R&D Can. – Ctr. for Sec. Sci., Taser X2 Preliminary Investigation, 10 28 (2013), http://publications.gc.ca/collections/collection_2016/rddc-drdc/D68-3-001-20132 claims are not time-barred; however, the Court finds that Richey’s warranty claims fail 3 under both express and implied warranty theories. 4 1. Statute of Limitations 5 Axon argues that all of Richey’s warranty claims are time-barred because the 6 Warranty is limited to one year from the date of receipt. (ECF No. 29 at 17–18.) Axon 7 contends that because Richey purchased the C2 model in 2016, and a replacement 8 model was shipped in or around October 2016, all warranty claims expired by October 9 2017—18 months before Richey filed the Complaint in April 2019. (ECF No. 29 at 18.) 10 This argument fails, however, because Axon has mistakenly conflated the duration of the 11 Warranty with the statute of limitations for claims under the Act. 12 “The [Act] does not contain its own statute of limitations, so [courts] must use the 13 most analogous state statute of limitations.” Gerstle v. American Honda Motor Company, 14 Inc., 2017 WL 2797810 , at *13 (N.D. Cal., 2017) (citing Rooney v. Sierra Pac. Windows, 15 566 F. App’x. 573, 576 (9th Cir. 2014)). California adopts the same four-year statute of 16 limitations period for breach of warranty as the Uniform Commercial Code.4 See Mexia v. 17 Rinker Boat Co., Inc., 95 Cal. Rptr. 3d 285, 291 (Cal. App. 4 Dist. 2009); see also Rooney, 18 566 F. App’x. at 576 (applying California’s four-year statute of limitations to violations of 19 the Act). 20 Here, Richey alleges, and Axon does not dispute, that he received both his original 21 and replacement CEWs in 2016. (ECF No. 1 at 6.) Richey filed this action in April 2019. 22 (Id. at 17.) Therefore, Richey brought his claims within the four-year statute of limitations 23 and they are not time-barred. 24 2. Breach of Express Warranty 25 Next, Axon argues that Richey has failed to state a claim because he does not 26 allege a violation of the express warranty. (ECF No. 29 at 15.) Specifically, Axon contends [27] 28 4As discussed below, under choice of law analysis the Court applies California law 2 at 16), (2) there is no breach because Axon complied with the terms of its Warranty by 3 shipping the Pulse model as a replacement for Plaintiff’s malfunctioning C2 model (Id.), 4 and (3) the express warranty does not cover design defects, only defects in workmanship 5 and materials (Id. at 17). The Court agrees with Axon’s third argument. As this argument 6 is dispositive of the issue, the Court declines to address the first two arguments. 7 Axon contends that the express warranty covers only defects in workmanship and 8 materials, not design defects. (ECF No. 29 at 17.) Axon’s Warranty states that “[Axon] 9 warrants that its citizen model CEWs (Bolt, Pulse, X26C, M26C, X26P Professional 10 Series, X2 Professional Series, and C2) . . . are free from defects in workmanship and 11 materials for a period of ONE (1) YEAR . . ..” (ECF No. 1 at 9) (emphasis added). The 12 Court finds that Axon is correct. 13 The “vast weight of authority hold[s] that a workmanship and materials warranty 14 cannot encompass a design defect claim.” Nelson v. Nissan N. Am., Inc., No. 11–5712, [15] 2014 WL 7331075 , at *3 (D. N.J. Dec. 19, 2014); see also Troup v. Toyota Motor Corp., 16 545 F. App’x. 668 (9th Cir. 2013) (finding that district court properly dismissed Plaintiff’s 17 breach of express warranty claim because the alleged design defect did not fall within 18 Defendant Toyota’s warranty against defects in materials and workmanship); Rollolazo v. 19 BMW of N. Am., LLC, CV 16-00966 BRO, 2017 WL 6888501 , at *9 (C.D. Cal. May 2, 20 2017) (“[T]his Court finds that Plaintiffs' claims for design defects may not be pursued 21 under an express warranty for materials and workmanship.”). 22 In the Complaint, Richey repeatedly describes the alleged CEW defect as a design 23 defect or flaw. (ECF No. 1 at 9, 11, 12.) Similarly, throughout the Letter, Richey does the 24 same. (Id. at 20, 22.)5 Because “the gravamen of the complaint” is that the CEW safety 25 switch issue was the result of a design flaw, the Court finds that Richey has alleged a 26 design defect claim. See Troup, 545 F. App’x. at 669. Because design defects are not [27] 28 5The Letter is incorporated by reference. See supra Section III. 2 warranty. Therefore, the Court dismisses Richey’s claim for breach of express warranty.6 3 3. Breach of Implied Warranty 4 Richey counters that his claim under the Act can still proceed because the design 5 defect claim is covered under the implied warranties of merchantability and fitness. (ECF 6 No. 36 at 8; ECF No. 1 at 13.) However, this assertion fails because Axon explicitly 7 disclaimed all implied warranties. 8 Under the Act, the term implied warranty refers to “implied warranti[es] arising 9 under State law in connection with the sale by a supplier of a consumer product.” 15 10 U.S.C. § 2301 (7). California law provides for implied warranties of merchantability and 11 fitness for the sale of goods. Cal. Com. Code §§ 2314 , 2315. It also allows a manufacturer 12 to disclaim these implied warranties. Cal. Com. Code § 2316 . However, “[a] company 13 may disclaim the implied warranty of merchantability so long as the disclaimer mentions[s] 14 merchantability and is conspicuous” while “[a]” company may disclaim the implied 15 warranty of fitness as long as the disclaimer is in writing and conspicuous.” Minkler v. 16 Apple, Inc., 65 F. Supp. 3d 810, 819 (N.D. Cal. 2014) (internal citations omitted). 17 Axon notes that the Warranty states that “[Axon] specifically disclaims any and all 18 statutory or implied warranties, including without limitation, warranties of merchantability, 19 design, fitness for a particular purpose, arising from a course of dealing, usage or trade 20 practice, warranties against hidden or latent defects . . ..”7 The Warranty clearly disclaims 21 the implied warranties of merchantability and fitness. Thus, Richey may not assert these 22 claims. [23] 24 6Richey’s Complaint contains brief references to defects in materials and workmanship. (ECF No. 1 at 11, 12.) However, to the extent that Richey has asserted 25 these claims, Richey has provided no factual allegations to support them. As such, Richey has failed to state a claim for these defects as well. See Troup, 545 F. App’x. at 669 26 (internal quotation marks omitted) (finding that a complaint containing only “scattered references to materials” failed to “adequately allege a materials or workmanship defect”). [27] 7The Warranty is incorporated by reference. See supra Section III. Taser, 28 https://buy.taser.com/pages/shipping-and-warranty-information (last visited Jan. 14, 2 specific and conspicuous language. Instead, Richey alleges that any limitation of implied 3 warranties by Axon is unconscionable under the § 2-302 of the UCC and is unenforceable. 4 (ECF No. 1 at 13.) However, Richey’s allegation of unconscionability is threadbare. It 5 contains no factual allegations and resembles a “formulaic recitation of the elements of a 6 cause of action.” Iqbal, 556 U.S. at 678 (internal quotation marks omitted) (citing 7 Twombly, 550 U.S. at 555). As such, Richey’s claim of unconscionability is not plausible. 8 Because Axon has disclaimed all implied warranties, and because Richey does not 9 sufficiently allege unconscionability of those disclaimers, Richey’s claims of breach of 10 implied warranty cannot proceed. The Court therefore dismisses them. 11 C. State Law Claims 12 Axon asserts that the Court should dismiss Richey’s state law claims because 13 under choice of law analysis Nevada “has no connection to the alleged tortious conduct” 14 to support claims under Nevada law. (ECF No. 29 at 18.) Richey counters that choice of 15 law analysis is premature at this stage. (ECF No. 36 at 20.) The Court agrees with Axon 16 that Richey’s claims must be governed by California law. 17 Because this is a diversity action filed in the District of Nevada, Nevada’s law 18 governs the Court’s analysis of the choice of law issue. See Cleary v. News Corp., 30 19 F.3d 1255, 1265 (9th Cir. 1994) (“A district court in diversity jurisdiction must apply the 20 law of the forum state to determine the choice of law.”); see also Klaxon Co. v. Stentor 21 Elec. Mfg. Co., 313 U.S. 487, 496 (1941). Nevada uses the most significant relationship 22 test from the Restatement (Second) of Conflict of Laws to govern choice of law issues. 23 See Gen. Motors Corp. v. Eighth Judicial Dist. Court of State of Nev. ex rel. Cty. of Clark, [24] 134 P.3d 111, 116 (Nev. 2006); Restatement (Second) of Conflict of Laws § 145 (Am. 25 Law Inst. 1971). 26 Under this test, “[t]he rights and duties of the parties with respect to an issue in 27 contract are determined by the local law of the state which, with respect to that issue, has 28 the most significant relationship to the transaction and the parties under the principles 2 deciding which state has the most significant relationship to the issues includes: “(a) the 3 place of contracting, (b) the place of negotiation of the contract, (c) the place of 4 performance, (d) the location of the subject matter of the contract, and (e) the domicil, 5 residence, nationality, place of incorporation and place of business of the parties.” Id. § 6 188(2). No one factor is dispositive, as each should “be evaluated according to their 7 relative importance with respect to the particular issue.” Id. 8 Here, the first three factors weigh heavily in favor of California. Richey alleges that 9 the claims arose in California, that the replacement Pulse model was shipped to his 10 residence in California, and that the product “unintentionally discharged” in California. 11 (ECF No. 29-1 at 4–5.) Accordingly, all of Richey’s alleged injuries occurred in California, 12 not Nevada. Factor (d) weighs in favor of Nevada because Richey’s CEW is currently 13 located in this district. (ECF No. 1 at 3.) However, factor (e) is split between Nevada and 14 Arizona—while Richey is a resident of Nevada, Axon is an Arizona company. (Id. at 2– 15 3.) Because the Court finds that the first three factors substantially outweigh factors (d) 16 and (e), the Court will apply California law to Richey’s state law claims.8 See Thornell v. 17 Seattle Service Bureau, Inc., 742 F. App’x. 189, 193 (9th Cir. 2018) (“[D]etermining which 18 state’s law applies is appropriate at the motion to dismiss stage, if the pleaded facts allow 19 it.”). 20 1. Fraudulent Omission9 21 California recognizes a cause of action for fraudulent omission. Cal. Com. Code 22 §§ 1572(3), 1710(3). Under California law, the elements of fraudulent omission are: 23 (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the 24 plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have [25] 8Because of the weight of the first three factors, the Court would reach the same 26 conclusion if the factors listed under §§ 145 (general torts) and 148 (fraud and misrepresentation) of the Restatement (Second) of Conflict of Laws were applied. [27] 9The pleadings and the motions use both the terms fraudulent omission and 28 fraudulent concealment, but they refer to the same claim. The Court will use fraudulent known of the concealed or suppressed fact, and (5) as a result of the 2 concealment or suppression of the fact, the plaintiff must have sustained damage. [3] 4 Boschma v. Home Loan Ctr., Inc., 129 Cal. Rptr. 3d 874, 890 (Cal. App. 4 Dist. 2011) 5 (internal quotations omitted). Generally, fraud claims are subject to a heightened pleading 6 standard that requires claims to be pleaded with particularity. See id. (internal quotations 7 omitted) (“Fraud must be pleaded with specificity rather than with general and conclusory 8 allegations.”). However, because fraudulent omission alleges “a failure to act instead of 9 an affirmative act,” fraudulent omission claims “can succeed without the same level of 10 specificity required by a normal fraud claim.” Baggett v. Hewlett-Packard Co., 582 F. 11 Supp. 2d 1261, 1267 (C.D. Cal. 2007) (internal quotations omitted). 12 Axon asserts that Richey’s fraudulent omission claim must be dismissed for two 13 reasons: (1) the claim was not pleaded with particularity; and (2) the Complaint fails to 14 allege the elements of duty to disclose and intent to deceive. 15 On the issue of particularity, Axon specifically claims that the Complaint only 16 contains conclusory allegations that Axon knew of, but did not disclose, the alleged 17 defect. (ECF No. 29 at 21.) The Court disagrees that the Complaint’s allegations are 18 conclusory. Richey alleges that Axon informed him that their “engineers are currently 19 aware of the safety switch activation [issue] and are working on a solution.” (ECF No. 1 20 at 8.) Richey also alleges Axon’s user manuals for their devices failed to alert consumers 21 about the alleged defective safety mechanism and that Axon otherwise failed to inform 22 consumers about the alleged defect. (Id. at 11.) These specific factual allegations are 23 sufficient to meet the pleading standards of a fraudulent omission claim.10 24 Axon’s argument that the Complaint does not adequately allege a duty to disclose 25 and an intent to deceive is also unavailing. First, Axon argues that because the Complaint [26] 27 10Axon also argues that Richey cannot allege fraudulent omission because he never purchased any of the models at issue. (ECF No. 29 at 22.) However, as discussed 28 above, Richey has standing to bring claims for the Pulse, X2 and X26P models. See supra 2 the alleged defect. (ECF No. 29 at 23.) Second, Axon states that the Complaint has no 3 factual allegations that Axon intended to conceal the alleged defect to induce Richey to 4 purchase the C2 model. 5 While the general rule is that fraudulent omission requires “some fiduciary 6 relationship” between the parties, “[t]he duty to disclose may arise without any confidential 7 relationship where the defendant alone has knowledge of material facts which are not 8 accessible to the plaintiff.” Magpali v. Farmers Grp., Inc., 55 Cal. Rptr. 2d 225, 232 , (Cal. 9 App. 2 Dist. 1996) (internal quotations omitted). Here, Richey alleges that Axon’s 10 engineers were aware of the alleged defect, that Axon did not inform consumers of the 11 defect through their user manuals or otherwise, and that consumers could not have 12 reasonably been expected to know about the defect. (ECF No. 1 at 11, 14.) These specific 13 factual allegations adequately plead Axon’s knowledge of material facts that were not 14 accessible to Richey. Additionally, these facts support Richey’s allegation that Axon 15 intended to induce, and did induce, Richey and other consumers to purchase the 16 allegedly defective products. (Id. at 15.) Because Richey has adequately pleaded each 17 of the elements of fraudulent omission under the heightened pleading standard, the Court 18 denies Axon’s motion to dismiss Richey’s fraudulent omission claim. 19 2. Unjust Enrichment 20 The Court will dismiss Richey’s unjust enrichment claim. As a quasi-contract claim, 21 unjust enrichment is unavailable when there is an enforceable contract between the 22 parties. See Klein v. Chevron U.S.A., Inc., 137 Cal. Rptr. 3d 293, 330 (Cal. App. 2 Dist. 23 2012) (finding that plaintiff could not bring inconsistent pleadings regarding the existence 24 of an enforceable agreement where “their unjust enrichment claim did not deny the 25 existence or enforceability of that agreement”). Here, neither party disputes that Axon’s 26 manufacturer’s limited warranty is an enforceable contract. Richey is therefore precluded 27 from bringing an unjust enrichment claim. The claim is dismissed with prejudice. 28 /// 1 3. Nevada Deceptive Trade Practices Act 2 The Court will also dismiss Richey’s claims asserted under the NDTPA. Unlike with 3 || Richey’s other state law claims, California does not have a deceptive trade practices act. 4 || While California has laws that may be similar to the NDTPA (e.g., California Unfair 5 || Competition Law, CA. Bus. & Prof. § 17200 et seq.; California False Advertising Law, CA. 6 || Bus. & Prof. § 17500 et seq.), it is unclear which law, if any, could apply to Richey’s 7 || NDTPA claim. In any event, Richey has not alleged violations of those California statutes. 8 || As such, the Court dismisses Richey’s NDTPA claims. V. CONCLUSION 10 The Court notes that the parties made several arguments and cited to several 11 || cases not discussed above. The Court has reviewed these arguments and cases and 12 || determines that they do not warrant discussion as they do not affect the outcome of the 13 || issues before the Court. 14 It is therefore ordered that Defendant Axon Enterprises, Inc’s motion to dismiss 15 || (ECF No. 29) is granted in part and denied in part as discussed herein. It is granted as to 16 || all but Plaintiff's state law fraudulent omission claim. 17 DATED THIS 29" day of January 2020. □□ 19 / ~ MIRANDA M. DU 20 CHIEF UNITED STATES DISTRICT JUDGE