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Kearns filed a state (California) court complaint alleging violation of state consumer protection and unfair competition laws against Ford Motor Company, marketer and seller of a “certified pre-owned” vehicle program for car dealers. Ford removed the action to federal court. The district court dismissed Kearns’ amended complaint and second amended complaint. Kearns’ third amended complaint was also dismissed with leave to amend (which leave Kearns opted not to pursue). The district court dismissed the case and Kearns appealed.
The Federal Rule of Civil Procedure 9(b) requirement that fraud allegations must be pleaded with particularity applies to claims made in federal court under California’s consumer protection and unfair competition laws.
Kearns sued Ford Motor Company in California state court alleging that Ford Motor Company violated state consumer protection and unfair competition laws. Ford removed the action to federal court. The district court dismissed Kearns’ amended complaint and second amended complaint. Kearns’ third amended complaint was also dismissed with leave to amend. After Kearns opted not to pursue leave to amend, the district court dismissed the case. Kearns appealed from the dismissal of the third amended complaint, which alleged that, in connection with Ford’s “certified preowned vehicle” program, Ford made false and misleading statements and failed to disclose its limited oversight over the vehicle certification process.
Were Kearns’ claim subject to the pleading requirements of Federal Rule of Civil Procedure 9(b)?
Yes, Kearns’ claims were subject to the pleading requirements of Federal Rule of Civil Procedure 9(b).
Kearns’ third amended complaint was grounded in fraud, which he failed to plead with the necessary particularity. Federal Rule of Civil Procedure 9(b) applied to Kearns’ claims; all of his claims were grounded in fraud; and the district court did not err in failing to specifically evaluate his complaint under the unfairness prong of California’s unfair competition law.