Nilsen v. Tesla, Inc.

Background

Roald Nilsen alleged that he purchased a used 2016 Tesla X on February 3, 2020, and that the vehicle had serious defects and warranty nonconformities. He asserted four claims against Tesla: breach of express warranty under the Song-Beverly Act, breach of implied warranty under that Act, violation of California Civil Code section 1793.2(b), and violation of the Magnuson-Moss Warranty Act. Tesla moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim, and moved to strike certain requested remedies under Rule 12(f).

Rulings on the Motion to Dismiss

The court granted Tesla’s motion to dismiss Claim 1, Nilsen’s express-warranty claim under the Song-Beverly Act, with leave to amend. The court found that Nilsen alleged he bought a used vehicle but did not allege that Tesla or its agent issued him a full new-car warranty when he purchased it. The court adopted the reasoning of a California appellate decision that a consumer who buys a used car must allege that a full new-car warranty was issued by the manufacturer or its agent at the time of purchase to state this claim. The court stated that it was unclear whether Nilsen could allege facts meeting that requirement but allowed him to try.

The court granted Tesla’s motion to dismiss Claim 2, Nilsen’s implied-warranty claim under the Song-Beverly Act, with leave to amend. The court held that Nilsen did not allege facts supporting an inference that Tesla sold him the used vehicle or otherwise acted as the retailer. The court also granted the motion to dismiss Claim 3, the claim under California Civil Code section 1793.2(b), with leave to amend. That statute requires covered repairs to conform to the warranty within 30 days, and the court held that Nilsen did not allege that any single repair attempt took more than 30 days.

The court denied Tesla’s motion to dismiss Claim 4, Nilsen’s Magnuson-Moss Warranty Act claim. Tesla argued that Nilsen had not alleged compliance with Tesla’s informal dispute-resolution procedures. The court held that this omission did not justify dismissal because compliance was treated as an affirmative defense rather than an allegation Nilsen was required to include in his complaint.

Motion to Strike and Further Amendment

The court denied Tesla’s motion to strike. Tesla’s request to strike references to replacement, restitution, and related damages for the section 1793.2(b) claim was denied as moot because that claim had been dismissed. Tesla’s request to strike Nilsen’s requests for reimbursement and incidental, consequential, and general damages under the Magnuson-Moss Warranty Act was denied because the court had declined to dismiss that claim. The court also allowed Nilsen to include California Commercial Code claims in any amended pleading.

Order

The motion to dismiss was granted in part and denied in part: Claims 1, 2, and 3 were dismissed with leave to amend, while dismissal of Claim 4 was denied. Tesla’s motion to strike was denied. Any amended complaint had to be filed by June 29, 2023. Judge Beth Labson Freeman signed the order.