Nilsen v. Tesla, Inc.

Background

Roald Nilsen purchased a used 2016 Tesla X on February 3, 2020. He alleged that the vehicle was delivered with serious defects and warranty nonconformities, including interior, electrical, and suspension problems. His First Amended Complaint asserted three claims: violation of California Civil Code § 1793.2(b), violation of the federal Magnuson-Moss Warranty Act, and breach of express warranty under the California Commercial Code.

Tesla moved under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. Tesla sought dismissal of Claim One and Claim Three and moved under Rule 12(f) to strike Claim One. Nilsen did not oppose the motion.

Claim One: California lemon law

Nilsen alleged fourteen repair visits and claimed that Tesla’s authorized facilities did not complete repairs within 30 days. The court held that California Civil Code § 1793.2(b) requires allegations that a single repair attempt took more than 30 days. The amended complaint listed the dates of the visits but did not state how long any individual repair took or allege that separate visits constituted one repair attempt. Allegations that several visits concerned the same general vehicle component were not enough.

The court therefore held that the amended complaint failed to state a claim under § 1793.2(b). It granted Tesla’s motion to dismiss Claim One without leave to amend and denied Tesla’s motion to strike Claim One as moot.

Claim Three: Express warranty

Tesla argued that California Commercial Code § 2607 requires a buyer to notify the seller of an alleged breach within a reasonable time after discovering or having reason to discover it. The court stated that Nilsen needed to allege this pre-suit notice. Although the complaint referred to “section 2-313,” the court assumed Nilsen meant § 2313 of the California Commercial Code, which largely adopts § 2-313 of the Uniform Commercial Code.

The court found that the amended complaint did not allege pre-suit notice and therefore failed to state a claim for breach of express warranty under § 2313. It granted Tesla’s motion to dismiss Claim Three without leave to amend.

Leave to amend and disposition

The court considered whether Nilsen should be allowed to amend again. It found no undue delay, bad faith, or undue prejudice, but noted that Nilsen had added only scant detail about the repairs and had not addressed pre-suit notice. The court concluded that futility of amendment—the inability to see a basis for a useful amendment—warranted denying further amendment, particularly because Nilsen did not oppose Tesla’s motion or show that he could allege additional facts to cure the deficiencies.

The court ordered that Tesla’s motion to dismiss Claim One was granted without leave to amend, Tesla’s motion to dismiss Claim Three was granted without leave to amend, and Tesla’s motion to strike Claim One was denied as moot. The court stated that Claim Two, the Magnuson-Moss Warranty Act claim, would go forward. Judge Beth Labson Freeman signed the order on November 6, 2023.