Sasso v. Tesla, Inc.

IN THE UNITED STATES DISTRICT COURT

' FOR THE EASTERN DISTRICT OF NORTH CAROLINA

WESTERN DIVISION

. No. 5:21-CV-24-D

CHAD SASSO, and )

THE CHALLENGE PRINTING CO. )

OF THE CAROLINAS, INC., )

. Plaintiffs, 5

v. \ ORDER

TESLA, INC., .

Defendant.

On December 15, 2020, Chad Sasso (“Sasso”) and The Challenge Printing Co. of the

Carolinas, Inc. (“Challenge Printing”) (collectively, plaintiffs”) filed suit in Wake County Superior

Court against Tesla, Inc. (““Tesla” or “defendant”) arising from problems with a Tesla car plaintiffs

purchased [D.E. 1-1]. On January 15, 2021, Tesla removed the case to this court [D.E. 1]. On

February 5, 2021, plaintiffs filed an amended complaint with class allegations [D.E. 11]. They allege

state and federal law claims: (1) breach of the implied warranty of merchantability; (2) a claim for

a declaratory judgment; (3) violation of the North Carolina Unfair Trade Practices Act, N.C. Gen.

Stat. §§ 75-1.1, et seq.; (4) breach of express warraty: (5) violations of the Magnuson-Moss

Warranty Act (“MMWA”), 15 U.S.C. §§ 2301, et seq.; and (6) breach of the covenant of good faith

and fair dealing. Plaintiffs seek compensatory damages, punitive damages, declaratory relief,

and injunctive relief See id. On April 12, 2021, Tesla moved to dismiss plaintiffs’ amended

complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) [D.E. 16]. On June 7, 2021,

plaintiffs’ responded in opposition [D.E. 22]. On July 6, 2021, Tesla replied [D.E. 25]. As

explained below, the court grants Tesla’s motion to dismiss. □

I.

Tesla manufactures electric cars. See Am. Compl. | 12. Tesla does not sell its cars via

traditional dealerships but instead sells them directly to consumers either online or at one of its

showrooms. See id. Each of Tesla’s models from 2016 to 2020 includes a 17-inch touchscreen

made by Innolux Corporation. See id. 15-16. The touchscreen controls many of the cars’

features. See id. J 19. For example, the touchscreen controls the interior lighting, door locks, child-

protection locks, opening the trunk, the blind-spot warning system, the audio system, and the cars’

climate control. See id. (listing these and more functions). According to plaintiffs, Tesla

manufactured more than 1.2 million cars with the Innolux touchscreen between 2016 and 2020. See

id.921. ©

Sasso is a North Carolina citizen who owns and runs Challenge Printing. See id. { 11. In

2016, Sasso placed an online order with Tesla on behalf of Challenge Printing to purchase a new

2016 Model S 60D. See id. § 24. ‘Sasso planned to use the car for company business. See id. The

car cost $101,280, and plaintiffs also paid $13,900 for software upgrades, $4,264.68 for accessories,

$550 for annual servicing, and paid to upfit Sasso’s house with an at-home charging station. See id.

{| 26-27. Apparently, Sasso and Challenge Printing split some of the ancillary costs, but it is

unclear whether they split the cost of the car itself. See id. Plaintiffs do not allege whose name

(Sasso or Challenge Printing) is on the car’s title. Based on what Sasso alleges Tesla employees told

him, Sasso believed the car came with a four-year warranty, and the purchase agreement Sasso

received confirming the purchase said Sasso would receive the warranty when he received the car,

if not before. See id. 28-30; [D.E. 11-6] 4. The purchase agreement also said Sasso could get

a copy of the warranty upon request or could download it from the purchaser’s online user account.

See Am. Compl. { 30; [D.E. 11-6] 4.

2 :

On December 15, 2016, Sasso picked up the car from Tesla. See Am. Compl.§31. Noone

gave Sasso a copy of the warranty when he picked up the car. See id. In June 2018, the touchscreen

in the car began to malfunction by developing a yellow border around the edge of the screen. See

id. [33. On July 3, 2018, Sasso took the car to a Tesla location, and Tesla replaced the touchscreen

for free under the warranty. See id. f] 34-35. After six months, the problem returned. See id. □□□□

Sasso then tried several times to have Tesla fix the touchscreen, but each time, Tesla could not fix

the screen because of equipment issues. See id. {| 37-54. Tesla then told plaintiffs the touchscreen

defect can be mitigated but not fully fixed without upgrading the touchscreen for $2,500. See id. □□□

50-S1. Plaintiffs allege that the yellow border appears on the touchscreen because the touchscreen

is poor quality and does not meet industry standards for the range of temperatures and exposure to

sunlight cars endure when they are parked outside. See id. □□ 55-61. Plaintiffs allege many Tesla

owners have had similar problems. See id. {] 62-63.

Additionally, plaintiffs allege their car came with a New Vehicle Limited Warranty (the

“warranty”). See id. J 64. Tesla, however, allegedly never gave plaintiffs a copy of the warranty

when they received the car (or at any time thereafter). See id. J 65. Plaintiffs allege that when Sasso

logged into plaintiffs’ MyTesla online account, the warranty available online changed over time and

that Tesla refused Sasso’s requests to send a hard copy of the 2016 warranty. See id. {| 66-72.

Sasso eventually found copies of the warranty online, but plaintiffs allege the various copies are all

different and indicate a constantly changing document. See id. 1] 73-77. According to plaintiffs,

the alleged warranty changes diminish customers’ warranty rights to Tesla’s benefit. See id. □□□

77-82.

I.

A motion to dismiss under Rule 12(b)(1) tests subject-matter jurisdiction, which is the court’s

“statutory or constitutional power to adjudicate the case.” Steel Co. v. Citizens for a Better Env’t,

523 U.S. 83, 89 (1998) (emphasis omitted); see Holloway v. Pagan River Dockside Seafood, Inc.,

669 F.3d 448, 453 (4th Cir. 2012); Constantine v. Rectors & Visitors of George Mason Univ., 411

F.3d 474, 479-80 (4th Cir. 2005). A federal court “must determine that it has subject-matter

jurisdiction over the case before it can pass on the merits of that case.” Constantine, 411 F.3d at

479-80. In considering a motion to dismiss for lack of subject-matter jurisdiction, the court may

consider evidence outside the pleadings without converting the motion into one for summary

judgment. See, e.g., White Tail Park, Inc. v. Stroube, 413 F.3d 451, 479 (4th Cir. 2005); Richmond,

Fredericksburg & Potomac R.R. v. United States, 945 F.2d 765, 768 (4th Cir. 1991). “[T]he party

invoking federal jurisdiction bears the burden of establishing its existence.” Steel Co., 523 U.S. at

104; see Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999). However, “when a defendant

‘asserts that the complaint fails to allege sufficient facts to support subject matter jurisdiction, the

trial court must apply a standard patterned on Rule 12(b)(6) and assume the truthfulness of the facts

alleged [in the complaint and any additional materials].” Kerns v. United States, 585 F.3d 187, 193

(4th Cir, 2009), Tesla argues that Sasso lacks standing concerning alll his claims and that both

plaintiffs lack standing to assert their declaratory judgment claim.

A. .

Tesla contends that Sasso lacks standing. See [D.E. 17] 27-28. A plaintiff establishes

standing by showing: (1) that the plaintiff has “suffered an injury in fact—an invasion of a legally

protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural

or hypothetical”; (2) “a causal connection between the injury and the conduct complained of—the

injury has to be fairly traceable to the challenged action of the defendant, and not . . . the result of

the independent action of some third party not before the court”; and (3) that it is “likely, as opposed

to merely speculative, that the injury will be redressed by a favorable decision” from the court.

Chambers Med. Techs. of S.C., Inc. v. Bryant, 52 F.3d 1252, 1265 (4th Cir. 1995) (alterations

omitted) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)); see Spokeo, Inc. □

v. Robins, 578 U.S. 330, 338 (2016). These requirements are “the irreducible constitutional.

minimum of standing.” Lujan, 504 U.S. at 560; see Spokeo, 678 U.S. at 338. Ifa plaintiff does not

have standing, the court does not have subj ect-matter jurisdiction to hear the plaintiff's claim. See,

e.g., Lujan, 504 U.S. at 560-61; White Tail Park, 413 F.3d at 459. .

‘Tesla argues Sasso does not have standing because Sasso has not suffered an injury in fact.

See [D.E. 17] 27-28. The injury in fact requirement is the “first and foremost” of the standing

requirements. Spokeo, 578 U.S. at 338 (cleaned up); see Steel Co., 523 U.S. at 103. To show injury

in fact, “a plaintiff must show that he or she suffered ‘an invasion ofa legally protected interest? that

is “concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.”” Spokeo,

578 U.S. at 339 (quoting Lujan, 504 U.S. at 560). An injury is particularized when it affects the

plaintiff in a “personal and individual way.” Spokeo, 578 US. at 339 (quotation omitted). A

- concrete injury.is one that actually exists, even ifit is intangible. See id. at 340. It must be real and

abstract. See id. . □

Sasso lacks standing because he suffers no injuries from the car’s alleged defects or from —

Tesla’s alleged warranty scheme. Plaintiffs allege Sasso “placed an online order on behalf of

Plaintiff Challenge Printing for a new 2016 Model S 60D .... The intended purpose of the ordered □

vehicle was to provide Sasso with a company vehicle which would be for his exclusive and primary

use.” Am. Compl. J 24 (emphasis added). Sasso and Challenge Printing split the costs of software

upgrades and other services for the car; however, plaintiffs do not allege that Sasso and Challenge

Printing split the cost of the car itself. See id. 26-27. Sasso’s name, not Challenge Printing’s

name, was on the purchase agreement, but Sasso listed his company email address. See [D.E. 11-6]

2. Plaintiffs do not allege whose name is on the car’s title. Plaintiffs’ alleged injuries are the

diminished value of the car because of the yellow-band defect and lost value of the warranty

resulting from Tesla’s alleged changes to the warranty. See Am. Compl. 7 53. Taking these

allegations as true, Sasso was acting as Challenge Printing’s agent when he purchased the car.

Challenge Printing, as the car’s owner, suffers any lost value resulting from the alleged touchscreen

defect and warranty changes. Because Sasso does not own the car, he suffers no individual injury

and thus lacks standing. See, e.g., Lieberson v. Johnson & Johnson Consumer Cos., 865 F. Supp.

2d 529, 537 (DN.J. 2011).

Sasso plausibly alleges that he incurred personal costs related to software upgrades,

accessories, annual servicing, and installing a charging station in his home. See Am. Compl. 4 27.

Even so, the losses alleged in this case involve the loss of the vehicle’s value and the lost value of

the warranty. Challenge Printing, as the car’s owner, incurred those losses. Plaintiffs do not allege

that the yellow band on the touchscreen impairs Sasso’s ability to use the software upgrades he

purchased. Plaintiffs also do not allege that the annual servicing or accessories, for which Sasso

personally paid, concerned the touchscreen or warranty. And plaintiffs do not allege that the yellow

band on the touchscreen or the warranty changes render the charging station in Sasso’s home

inoperable. Thus, Sasso’s personal expenditures are not plausibly a part of the lost value of the car _.

or ae and his personal costs, without more, do not demonstrate an injury in fact for the

purposes of standing.

Sasso also lacks third-party standing to sue on behalf of Challenge Printing. Generally, □ □

plaintiff “must assert his own legal rights and interests, and cannot rest his claim to relief on the

legal rights or interests of third parties.” Maryland Shall Issue, Inc. v. Hogan, 971 F.3d 199, 214 (4th

.

Cir. 2020) (quotation omitted); see Warth v. Seldin, 422 U.S. 490, 499 (1975). The third-party

standing analysis is prudential and examines whether “the third party can reasonably be expected

properly to frame the issues and present them with the necessary adversarial zeal.” Maryland Shall

Issue, 971 F.3d at 215 (quotation omitted); see Secretary of State of Md. v. Joseph H. Munson Co.,

467 U.S. 947, 956 (1984). For a plaintiff to have third-party standing, he must show (1) that he has

a close relationship with the party whose right is asserted and (2) that something hinders the right

holder’s ability to assert his own interests. See Powers v. Ohio, 499 U.S. 400, 411 (1991); Maryland

Shall Issue, 971 F.3d at 215. Even assuming Sasso has a sufficiently close relationship with

Challenge Printing as an owner and officer of the ena Sasso has not plausibly alleged that

Challenge Printing is hindered from asserting its own rights. In fact, Challenge Printing is asserting

_ itsrights as a plaintiff in this lawsuit. Thus, Sasso does not have third-party standing to assert claims

on behalf of Challenge Printing. Accordingly, the court dismisses Sasso for lack of standing.'

B.

Tesla next argues that Challenge Printing lacks standing to assert a declaratory judgment

claim. See [D.E. 17] 23-242 Tesla grounds its arguments in North Carolina law. But Challenge

Printing pleaded its declaratory judgment claim under 28 U.S.C. §.2201. See Am. Compl. at 35.

Thus, the claim arises under federal law. Moreover, “[flederal standards euide the inquiry as to the

propriety of declaratory relief in federal courts, even when the case is under the court’s diversity □

jurisdiction.” White v. Nat’l Union Fire Ins. Co. of Pittsburgh, 913 F.2d 165, 167 (4th Cir. 1990)

! Because the court concludes Sasso lacks standing, the court need not address Tesla’s

argument under Federal Rule of Civil Procedure 17. See [D.E. 17] 28.

2 Because the court dismisses Sasso as a plaintiff, the remainder of the order addresses

Challenge Printing. Even if Sasso has standing, however, the court’s conclusions in this order would

apply equally to Sasso’s substantive claims.

(quotation omitted); see Wilkerson Francis Investments, LLC v. Am. Zurich Ins. Co., No. 3:19cv582,

2020 WL 4238429, at *4 (E.D. Va. July 23, 2020) (unpublished).

Under the Declaratory Judgment Act, a district court “may declare the rights and other legal

relations of any interested party seeking such declaration, whether or not □□□□□□□□□□□□□□□□□□□□□□□□

sought,” so long as the case is a “case of actual controversy within its jurisdiction.” 28 U.S.C. §

2201(a). The Declaratory Judgment Actis purely remedial and does not create jurisdiction or create

substantive rights. See CGM, LLC v. BellSouth Telecommunications, Inc., 664 F.3d 46, 55-56 (4th

Cir. 2011); Lotz Realty Co., Inc. v. HUD, 717 F.2d 929, 932 (4th Cir. 1983); see also Skelly Oil Co.

Phillips Petroleum Co., 339 U.S. 667, 671-72 (1950). Thus, “[a] request for declaratory relief

is barred to the same extent that the claim for substantive relief on which it is based would be

_ barred.” CGM, 664 F.3d at 55-56 (alteration in original) (quotation omitted); see Int’l Ass’n of

Machinists & Aerospace Workers v. Tenn. Valley Auth., 108 F.3d 658, 668 (6th Cir. 1997). In light

of these principles, a district court may issue a declaratory judgment where it has subject-matter

jurisdiction and two other conditions are satisfied: (1) “the dispute must be a ‘case or controversy’

within the confines of Article IT’ and (2) the “court, in its discretion, must be satisfied that

declaratory relief is appropriate.” White, 913 F.2d at 167; see Trustgard Ins. Co. v. Collins, 942 F.3d

195, 201 (4th Cir. 2019); Miller v. August Mut. Ins. Co., 157 F. App’x 632, 637 (4th Cir. 2005) (per

_ euriam) (unpublished). . □

Tesla argues that the case or controversy requirement is not met because Challenge Printing

lacks standing. To have standing to seek a declaratory judgment, a plaintiff “must establish an

ongoing or future injury in fact.” Kenny v. Wilson, 885 F.3d 280, 287 (4th Cir. 2018); see O’Shea

v. Littleton, 414 US. 488, 495-96 (1974); Brown-Thomas v. Hynie, 441 F. Supp. 3d 180, 201 □

(D.S.C. 2019); Meyer v. McMaster, 394 F. Supp. 3d 550, 559 (D.S.C. 2019). That injury also must

be traceable to the defendant and redressable by a favorable court decision. On December 15, 2020,

Challenge Printing filed suit in Wake County Superior Court. See [D.E. 1-1] 1. At the latest,

Challenge Printing’s warranty expired on that date, four years from when Sasso received the car from

Tesla. See Am. Compl. ff 29, 31. Thus, however allegedly unscrupulous Tesla’s warranty changes

are, they no long affect Challenge Printing’s rights, Challenge Printing no longer has an injury in

fact because it is no longer covered under the warranty. And because Challenge Printing is not

covered under the warranty, a favorable decision from this court would not benefit the company.

Thus, Challenge Printing does not have standing. Stated differently, Challenge Printing’s claim for

a declaratory judgment became moot the day after plaintiffs filed the complaint. Accordingly, the

court dismisses the declaratory judgment claim for lack of subject-matter jurisdiction. See Porter

v. Clarke, 852 F.3d 358, 363 (4th Cir. 2017) (“When a case or controversy ceases to exist—either

due to a change in the facts or the law—the litigation is moot, and the court’s subject matter

jurisdiction ceases to exist also.” (quotation omitted)).

Il.

Tesla argues that Challenge Printing fails to plausibly allege its remaining claims. A motion

to dismiss under Rule 12(b)(6) tests the complaint’s legal and factual sufficiency. See Ashcroft v.

Iqbal, 556 U.S. 662, 677-80 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-63 (2007);

Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir. 2010), aff'd, 566 U.S. 30 (2012);

Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). To withstand a Rule 12(b)(6) motion, a

pleading “must contain sufficient factual matter, accepted as true, to state a claim to relief that is

plausible on its face.” Iqbal, 556 U.S. at 678 (quotation omitted); see Twombly, 550 U.S. at 570;

Giarratano, 521 F.3d at 302. In considering the motion, the court must construe the facts and

reasonable inferences “in the light most favorable to [the nonmoving party].” Massey v. Oj aniit, 759

F.3d 343, 352 (4th Cir. 2014) (quotation omitted); see Clatterbuck v. City of Charlottesville, 708

F.3d 549, 557 (4th Cir. 2013), abrogated on other grounds by Reed v. Town of Gilbert, 576 U.S. 155

(2015). A court need not accept as true a complaint’s legal conclusions, “unwarranted inferences,

unreasonable conclusions, or arguments.” Giarratano, 521 F.3d at 302 (quotation omitted); see Iqbal,

U.S. at 678-79. Rather, a party’s factual allegations must “nudgef ] [its] claims,” Twombly, 550

US. at 570, beyond the realm of “mere possibility” into “plausibility.” Iqbal, 556 U.S. at 678-79.

When evaluating a motion to dismiss, a court considers the pleadings and any materials

“attached or incorporated into the complaint.” E.L du Pont de Nemours & Co. v. Kolon Indus., Inc.,

637 F.3d 435, 448 (4th Cir. 2011); see Fed. R. Civ. P. 10(c); Goines v. Valley Cmty. Servs. Bd., 822

F.3d 159, 166 (4th Cir. 2016); Thompson v. Greene, 427 F.3d 263, 268 (4th Cir. 2005). A courtmay

also consider a document submitted by a moving party if it is “integral to the complaint and there

is no dispute about the document’s authenticity” without converting the motion into one for summary

judgment. Goines, 822 F.3d at 166. Additionally, a court may take judicial notice of public records.

See, e.g., Fed. R. Evid. 201; Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322 (2007);

Philips v. Pitt Cnty. Mem’1 Hosp., 572 F.3d 176, 180 (4th Cir. 2009).

Tesla first argues Challenge Printing fails to state a claim for breach of the implied warranty

of merchantability. See [D.E. 17] 12-13. Under N.C. Gen. Stat. § 25-2-314, contracts for the sale

of goods by merchants include an implied warranty that the goods “are fit for the ordinary purposes

for which such goods are used.” N.C. Gen. Stat. § 25-2-314(2)(c). To establish a breach of this

warranty, a plaintiff must plausibly allege: “(1) that the goods bought and sold were subject to an

implied warranty of merchantability; (2) that the goods did not comply with the warranty in that the

goods were defective at the time of sale; (3) that his injury was due to the defective nature of the

10 □

goods; and (4) that damages were suffered as a result.” Dewitt v. Everready Battery Co.,Inc.,355_ -

N.C. 672, 683, 565 S.E.2d 140, 147 (2002) (quotations omitted); see Manley v. Doe, 849 F. Supp.

2d 594, 599 (E.D.N.C.), aff'd sub nom. Manley v. Wendy’s Int’l, Inc., 490 F. App’x 619 (4th Cir.

2012) (per curiam) (unpublished); Williams v. O’Charley’s, Inc., 221 N.C. App. 390, 393, 728

S.E.2d 19, 21 (2012).

Challenge Printing fails to plausibly allege the second element because the touchscreen defect

did not render the car unfit for ordinary use. A car’s ordinary purpose is to provide transportation.

“[W]here a car can provide safe, reliable transportation, it is generally considered merchantable.”

Carlson V. Gen. Motors Corp., 883 F.2d 287, 297 (4th Cir. 1989) (cleaned up); see Reynolds v. FCA

US LLC, No. 19-11745, 2021 WL 2682794, at *8 (E.D. Mich. June 30, 2021) (collecting cases);

Benipayo v. Volkswagen Grp. of Am., Inc., No. 15-md-02672-CRB, 2020 WL 553884, at *4 (N.D.

Cal. Feb. 4, 2020) (unpublished); Pinon v. Daimler AG, No. 1:18-C'V-3984-MHC, 2019 WL

11648560, at *11 (N.D. Ga. Nov. 4, 2019) (unpublished); In re FCA US LLC Monostable Elec.

Gearshift Litig., 280 Supp. 3d 975, 1015 (E.D. Mich. 2017); Bussian v. DaimlerChrylser Corp.,

411 F. Supp. 2d 614, 623 (M.D.N.C. 2006); DaimlerChrysler Corp. v. Morrow, 895 So. 2d 861,

864-65 (Ala. 2004); Taterka v. Ford Motor Co., 86 Wis.2d 140, 146, 271 N.W.2d 653, 655 (1978);

Nelson v. Wilkins Dodge, Inc., 256 N.W.2d 472, 476 0.3 (Minn. 1977); Tellinghuisen vy. Chrysler

Group, LLC, No. A13-2194, 2014 WL 4289014, at *3 (Minn. App. Sept. 2, 2014) (unpublished);

Brand v. Hyundai Motor America, 226 Cal.App.4th 1538, 1545—47 (2014); Stuck v. Long, 909 So.

2d 686, 692 (La.App. 2d Cir. Aug. 17, 2005). Stated differently, “‘[t]he weight of authority, from

courts across the country, indicates that plaintiffs may not recover for breach of implied warranty of

merchantability’ for vehicles which are .. . minimally ‘fit for the ordinary purpose of providing basic

transportation,’ and which ‘satisfy a minimum level of quality,’ even if they fail to perform ‘exactly

11

as the buyer expected.’” Haag v. Hyundai Motor America, 969 F. Supp. 2d 313, 317 (W.D.N.Y.

2013) (quoting Sheris v. Nissan N. Am., Inc., No. 07-2516 (WHW), 2008 WL 2354908, at *6

(D.N.J. June 3, 2008) (unpublished)). For example, in Ford Motor Credit Company LLC v.

McBride, defendants alleged a counterclaim for breach of the implied warranty of merchantability

because the passenger seat of the car would not stay upright and would instead fall backwards. See

257 N.C. App. 590, 594, 811 S.E.2d 640, 645 (2018). The North Carolina Court of Appeals held

that the defendants stated a claim because the faulty passenger seat “mad[e] transportation unsafe

and unreliable.” Id. at 595—96; 811 S.E.2d at 646; see also Ismael v. Goodman Toyota, 106 N.C.

App. 421, 431, 417 S.E.2d 290, 295 ( 1992) (stating the car’s problems left the plaintiff without the

car’s “use for transportation”).

In contrast, Challenge Printing does not plausibly allege that the yellow-band defect renders

the car inoperable, unsafe, or unreliable as a mode of transportation. Challenge Printing asserts that -

a driver must access many of the cat’s safety and other features using the touchscreen and that the

yellow-band defect affects the car’s safety, “accessability, readability, and usability.” Am. Compl.

19-20. Challenge Printing, however, does not plausibly allege Sasso had difficulty driving the

car or using the touchscreen despite the yellow band. Instead, the allegations are bare assertions that

do not plausibly allege that the yellow band made the car unsafe, unreliable, or inoperable. See id.

420. In fact, Challenge Printing nearly concedes the defect is purely cosmetic. See [D.E.22]11 —

(discussing “aesthetic defects”). Moreover, Challenge Printing does not suggest Sasso ever stopped

using the car as a means of transportation for company business. Thus, Challenge Printing has not □

plausibly alleged the second element of a claim for breach of the implied warranty of

merchantability, and the court dismisses the claim.

B.

Tesla next argues Challenge Printing does not plausibly allege breach of the car warranty or

breach of an express warranty based on representations allegedly made by Tesla employees. See

[D.E. 17] 13-16. Under N.C. Gen. Stat. § 25-2-313, a seller creates an express warranty through

“Talny affirmation of fact or promise made by the seller to the buyer which relates to the goods and

becomes part of the basis of the bargain.” N.C. Gen. Stat. § 25-2-313(1)(a). To state a claim for

breach of an express warranty, a plaintiff must plausibly allege: “(1) an express warranty as to a fact

or promise relating to the goods, (2) which was relied upon by the plaintiff in making his decision

to purchase, (3) and that this express warranty was breached by the defendant.” Harbor Point

Homeowners’ Assn, Inc. ex rel. Bd. of Dirs. v. DJF Enters., Inc., 206 N.C. App. 152, 162, 697

S.E.2d 439, 447 (2010) (quotation omitted); see City of High Point v. Suez Treatment Sols., Inc.,

485 F. Supp. 3d 608, 627 (M.D.N.C. 2020); Ford Motor Credit Co., 257 N.C. App. at 596, 811

S.E.2d at 646. A plaintiff must also plausibly allege that “the breach proximately caused the loss

sustained.” City of High Point, 485 F. Supp. 3d at 627. Finally, a plaintiff must plausibly allege that

the defect breaching the express warranty existed at the time of sale. See id. at 628; Riley v. Ken

Wilson Ford, Inc., 109 N.C. App. 163, 170, 426 S.E.2d 717, 721 (1993); Pake v. Byrd, 55N.C. App.

551, 554, 286 F.3d 588, 590 (1982).

Challenge Printing has not plausibly alleged the defect existed at the time of sale. See, e.g.,

Riley, 109 N.C. App. at 170, 426 S.E.2d at 721; Pake, 55 N.C. App. at 554; 286 S24 at 590.

Showing the car experienced problems close to the time of sale can create an inference that the defect □

existed at the time of sale. For example, in Riley, “the fact that the oil warning light came on en

route home from the dealership is evidence that certain problems existed at the beginning.” Riley,

426 N.C. App. at 170, 426 S.E.2d at 72. In Stutts, the truck owner noticed a wiring problem the

13 □

day he took delivery of the truck and an oil leak and other problems within two months of owning

the truck. See Stutts, 47 N.C. App. at 509-10, 513, 267 S.E.2d at 923, 925. In Ford Motor Credit

Company, the passenger seat began to fall backwards and would not stay upright within 24 hours of

the purchase. See Ford Motor Credit Co., 257 N.C. App. at 591, 811 S.E.2d at 643-44. In Anders

v. Hyundai Motor America Corporation, the plaintiffs car problems arose soon after the purchase,

and the plaintiff took the car in for repair about 20 times in the first four months he owned the car.

See 104.N.C. App. 61, 63, 407 S.E.2d, 618, 619-20 (1991).

In contrast, Sasso got the car from Tesla on December 15, 2016. See Am. Compl. { 31.

However, the yellow band did not appear on the touchscreen until June 15, 2018, roughly a year and

later. See id. § 33. Thus, Challenge Printing does not plausibly allege the defect existed at —

the time of sale. In opposition, Challenge Printing alleges the touchscreen was defective from the

beginning because the touchscreen failed to meet industry standards given it was not rated to

withstand the range of temperatures and exposure to sunlight that cars endure when parked outside.

See id. 55-61. But buying a product that works at the time of purchase but will likely fail over

a year later is not the same as buying a product that is already defective at the time of sale. Even

assuming the touchscreen’s failure to meet industry standards may indicate a latent defect, that

indication does not suffice on its own. C£, Goodman v. Wenco Foods, Inc., 333 N.C. 1, 17, 423

S.E.2d 444, 452 (1992) (“Proof of compliance with government standards is no bar to recovery on

a breach of warranty theory: although such evidence may be pertinent to the issue of the existence

of a breach of warranty, it is not conclusive.”); Red Hill Hosiery Mill, Inc. v. MagneTek, Inc., 159

N.C. App. 135, 141, 582 S.E.2d 632, 637 (2003) (“[C]ompliance with governmental standards is not

determinative of whether the product is defective.”). Challenge Printing has not plausibly alleged

any additional basis for showing the defect existed at the time of sale. Thus, the claim fails.

14

Challenge Printing also alleges Tesla expressly warranted it would make a copy of the

warranty available when Sasso picked up the car. See [D.E. 22] 24; Am. Comp. ff 28, 30. When

Sasso picked up the car on December 15, 2016, Tesla allegedly did not provide a copy of the

warranty. See Am. Compl. ff 31, 65. Challenge Printing also alleges that when Sasso went online

to the MyTesla account, the warranty was not a 2016 warranty but a warranty post-dating the

"purchase of the car. See id. | 66. But Challenge Printing only alleges facts indicating Sasso

attempted to get the warranty from the online account on February 5, 2020, years after the purchase.

Putting aside whether Tesla allegedly changed the terms of the warranty, plaintiffs do not plausibly

allege that Sasso went online in 2016 to get a copy of the warranty or that the correct warranty was

not available to Sasso online when Challenge Printing purchased the car. See id. FJ 30-32, 65-74.

so, the purchase agreement said Tesla would provide “a written copy . . . upon request,” [D.E.

11-6] 4, and Tesla representatives were unable to provide Sasso a copy of the 2016 warranty. See

id. 67-74. .

Taking Challenge Printing’s allegations as true, Challenge Printing fails to state aclaim. The

inability to get a copy of the warranty is not a plausible allegation that a defect existed in the car

Challenge Printing purchased. Moreover, Challenge Printing must plausibly allege that “the breach

proximately caused the loss sustained.” City of High Point, 485 F. Supp. 3d at 627. Challenge

Printing does not plausibly allege that its inability to obtain a particular copy of the warranty

proximately caused its injuries. As for the yellow-band defect, Tesla acknowledged the warranty

covers the issue and replaced the touchscreen once. See Am. Comp. 935. Even though Tesla has

failed to provide a permanent solution, Tesla still apparently acknowledges the warranty covers the

issue. Moreover, Challenge Printing alleges Tesla’s unilateral changes to the warranty, not the

inability to get a copy, have diminished the value of the warranty. See Am. Compl. f] 75-77.

15

Accordingly, the claim fails.

Challenge Printing also alleges Tesla breached numerous other express warranties in addition

to those already discussed. See id. 91.28, 119. Challenge Printing’s allegations are bare assertions.

See Am. Compl. □ 119. Indeed, Challenge Printing has “failed to identify any specific words,

promises, affirmations, or statements . . . that would create an express warranty.” McCauley v.

Hospira, Inc., No. 1:11CV108, 2011 WL 3439145, at *6 (M.D.N.C. Aug. 5, 2011) (unpublished).

Challenge Printing does not plausibly allege who made the representations, when they made them,

‘where they appear in Tesla’s advertising or other materials, or any other details. Even if the

screenshots of information and advertising on Tesla’s website that plaintiffs submitted to the court

are sufficient to demonstrate Tesla made statements that are express warranties (as opposed to being

mere puffery), see [D.E. 11-1, 11-2, 11-3, 11-4], Challenge Printing does not plausibly allege Sasso

read these portions of the website before purchasing the car. See Am. Compl. 24-29; see also

Maxwell v. Remington Arms Co., LLC, No. 1:10CV918, 2014 WL 5808795, at *4 (VM_LD.N.C. Nov.

7, 2014) (unpublished) (holding no reliance on express warranty, in part, because “Plaintiff never

alleged that he even observed Defendant’s advertisements”). Thus, Challenge Printing does not

plausibly state a claim, and the court dismisses the claims for breach of express warranty.

C.

Tesla contends Challenge Printing failed to plausibly allege violations of the Magnuson-Moss

Warranty Act. See [D.E. 17] 17. The MMWA provides a federal remedy for breach of warranty.

See Schimmer v. Jaguar Cars, Inc., 384 F.3d 402, 405 (7th Cir. 2004) (discussing the MMWA). The

act “supplements, rather than supplants state law.” Doll v. Ford Motor Co., 814 F. Supp. 2d 526,

545 (D. Md. 2011); see Carlson, 883 F.2d at 291. The provision creating a private cause of action

states: “Subject to subsections (a)(3) and (e), a consumer who is damaged by the failure of a supplier,

16

(

warrantor, or service contractor to comply with any obligation under this chapter, or under a written

warranty, implied warranty, or service contract, may bring suit for damages and other legal and

equitable relief... .” 15 U.S.C. § 2310(d)(1).? Under this provision, a plaintiff can “state a claim

by alleging either a violation of the MMWA’s substantive provisions or by satisfying the |

requirements for a state-law cause of action.” Collette v. Sig Sauer, Inc., No. 21-11392-FDS, 2021

WL 6052613, at *5 (D. Mass. Dec. 21, 2021) (unpublished). Challenge Printing alleges both types

of claims.

As for Challenge Printing’s MMWA claim thatis derivative of its state-law claims for breach

of express and implied warranties, see Am. Compl. J 130(a)-(b), Challenge Printing fails to state

aclaim. “To determine whether there has been a breach ofa written or implied warranty in violation

of the MMWA, courts must apply applicable state express and implied warranty law.” Johnson v.

Ford Motor Co., No. 3:13-6529, 2015 WL 7571841, at *16 (S.D.W. Va. Nov. 24, 2015)

(unpublished); see Carlson, 883 F.2d at 291. Stated differently, “[w]hen the MMWA claim is

premised on borrowed state-law warranty claims, MMWA claims stand or fall with the state-law

claims.” Sandoval v. PharmaCare US, Inc., 145 F. Supp. 3d 986, 998 (S.D. Cal. 2015) (quotations

omitted); see Clemens v. Daimler Chrysler Corp., 534 F.3d 1017, 1022 & n.3 (9th Cir. 2008); Doll,

3 Challenge Printing’s amended complaint contains class allegations. See Am. Compl. {J

91-98. Under the MMWA, a court only has federal question jurisdiction over a class-action

MMWA claim if “the number of named plaintiffs” exceeds 100. 15 U.S.C. '§ 2310(d)(3); Ware v.

Best Buy Stores, L.P., 6 F.4th 726, 731-32 (7th Cir. 2021); Misel v. Mazda Motor of N. Am., Inc.,

_ 420F. App’x 272, 273-74 (4th Cir. 2011) (per curiam) (unpublished). Challenge Printing and Sasso

allege no other named plaintiffs in this lawsuit. See Am. Compl. at 1; see also Ware, 6 F.4th at 732.

However, because the parties agree this court has original jurisdiction over Challenge Printing’s |

state-law claims under. the Class Action Fairness Act, see 28 U.S.C. § 1332(d), the court may

exercise supplemental jurisdiction over Challenge Printing’s MMWA claim. See 28 U.S.C. § 1367;

Ware, 6 F.4th at 733-34; cf. Scott v. Cricket Comme’ns., LLC, 865 F.3d 189, 194 n.3 (4th Cir.

2017). Thus, the court considers the claim. .

17 .

_ 814 F. Supp. 2d at 545; Bussain, 411 F. Supp. 2d at 624-25; see also [D.E. 22] 28 (conceding the

MMWA claim depends on the viability of the state-law claims). Accordingly, because Challenge

Printing failed to plausibly allege its state-law claims, its derivative MMWA claim fails.

As for Challenge Printing’s claim that Tesla failed to comply with the MMWA’s substantive

requirements, see Am. Compl. J 130(c)-(f), Challenge Printing fails to state □ claim. Challenge

Printing alleges Tesla failed to disclose the terms of its warranty in clear language and did not make

_ the warranty available before the sale. See id. TY 30-31; 130(6, The MMWA requires that

swarrantors “fully and conspicuously disclose [their written warranties] in simple and readily

understood language” and that “the terms of any written warranty on a consumer product be made

available to the consumer (or prospective consumer) prior to the sale of the product to him.” 15

U.S.C. § 2302(a), (b)(1)(A); see Atchole v. Silver Spring Imports, Inc., 379 F. Supp. 2d 797, 801-02

(D. Md. 2005). A warrantor may make a warranty available pre-sale by “[d}isplaying it in close

proximity to the warranted product,” including on the internet, or by “[fJurnishing it upon request

prior to sale.” 16 C.F.R. § 702.3(a). Even ifthe warranty was not easily available online, Challenge □

Printing does not plausibly allege that Sasso asked for a copy of the warranty before buying the car.

Moreover, Challenge Printing does not plausibly allege Sasso attempted to obtain a copy of the

warranty from plaintifte’ online MyTesla account in 2016 when he purchased the car for Challenge

Printing. At most, Challenge Printing alleges Sasso tried to obtain a copy of the warranty on

“various occasions” but only specifically describes an attempt in February 2020, years after the

aorta! Am. Compl. | 66.

Challenge Printing also alleges Tesla violated the MMWA by “circulating and unlawfully □

misrepresenting inapplicable warranty documents to its consumers.” Am. Compl. { 130(d).

Challenge Printing doés not cite any statute or regulation in support of this allegation. Taking

18

Challenge Printing’s allegations and all reasonable inferences drawn therefrom as true, Challenge

Printing plausibly alleges that by changing which warranty version is available to customers, without

a basis for doing so, Tesla fails to disclose the warranty terms applicable to each customer’s car in

clear and conspicuous language. See 16 C.F.R. § 701.3(a). Assuming without deciding that such

conduct plausibly violates the MMWA, Challenge Printing does not plausibly allege it was damaged

by Tesla’s allegedly unlawful practice, as discussed below. .

Challenge Printing also alleges Tesla improperly granted itself sole authority to decide

whether a defect exists within the scope of the warranty. See Am. Compl. J 130(f). A warrantor

may not “state that it alone shall determine what is a defect under the agreement.” 16 C.F.R. §

700.8. But Challenge Printing does not cite language in the warranty supporting this allegation.

Although Tesla reserved the right to decide whether to use new or used parts to repair defects, the

warranty does not state that Tesla alone decides what is covered. See, e.g., [D.E. 1 1-12] 7. Indeed,

that Tesla provides a dispute resolution mechanism for consumers disputing coverage under the

warranty belies the contention that Tesla made itself the sole arbiter of whether defects are covered.

See, e.g., id. at 14-16.

Plaintiffs’ standalone MMWA claims suffer a more fundamental defect. The statutory cause

of action says that “a consumer who is damaged” by the warrantor’s failures may bring suit. 15

U.S.C. § 2310(4). To bring suit, then, a plaintiff must plausibly allege “he has sustained actual

damage, proximately caused by” the defendant’s alleged failures. Atchole, 379 F. Supp. 2d at 802.

Challenge Printing alleges it suffered the lost value of the warranty. See Am. Compl. f] 75-77. But

Challenge Printing does not plausibly allege what that value is or how to determine it, especially

given the allegation that this loss is distinct from changes in the value of the car itself. Moreover,

as discussed below, none of the changes Challenge Printing alleges Tesla made to the warranty

19 ,

directly affect Challenge Printing’s alleged touchscreen troubles. Stated differently, none of the

alleged changes affected Tesla’s obligations to Challenge Printing regarding the allegedly defective

touchscreen. Without more, Challenge Printing does not plausibly allege it suffered actual harm as

a result of Tesla’s alleged failure to comply with the MMWA’s substantive provisions. Thus, the

court dismisses plaintiffs’ MMWA claims.*

Tesla argues Challenge Printing failed to plausibly allege that Tesla breached the covenant

of good faith and fair dealing. See [D.E. 17] 17-18. Under North Carolina law, contracts implicitly

contain “the basic principle of contract law that a party who enters into an enforceable contract is

required to act in good faith and to make reasonable efforts to perform [its] obligations under the

agreement.” Maglione v. Aegis Fam. Health Ctrs., 168 N.C. App. 49, 56, 607 S.E.2d 286, 291

(2005) (quotation omitted); see Bicycle Transit Auth., Inc. v. Bell, 314.N.C. 219, 228-29, 333 S.E.2d

299, 305 (1985). Where parties have executed a written contract, an action for “breach of the

covenant of good faith and fair dealing is part and parcel of a claim for breach of contract.”

McKinney v. Nationstar Mortg., LLC, No. 5:15-CV-637-FL, 2016 WL 3659898, at *8 (E.D.N.C.

July 1, 2016) (unpublished) (quotation and alteration omitted); see Murray v. Nationwide Mut. Ins.

Co., 123 N.C. App. 1, 19, 472 S.E.2d 358, 368 (1996). While breach of the implied covenant of

good faith and fair dealing is a separate claim from breach of contract, see Nadendla v. WakeMed,

No. 21-1300, 2022 WL 187835, at *5—6 (4th Cir. Jan. 21, 2022), North Carolina courts have found

that where there was no breach of contract, “it would be illogical . . . to conclude that [the party]

somehow breached implied terms of the same contract.” SunTrust Bank v. Bryant/Sutphin Props., □

4 Because the court dismisses the MMWA claims under Rule 12(b)(6), the court need not

address the parties’ dispute about the warranty’s arbitration provisions.

20

LLC, 222 N.C. App. 821, 833, 732 S.E.2d 594, 603 (2012); see Aresen v. Rivers Edge Golf Club

& Plantation, Inc., 368 N.C. 440, 451, 781 S.E.2d 1, 9 (2015); Spitzer-Tremblay v. Wells Fargo

Bank, N.A., 250N.C. App. 508, 793 S.E.2d 281, 2016 WL 6695825, at *4 (2016) (unpublished table

decision); see also Sutherland v. Domer, No. 1:17CV769, 2018 WL 4398259, at *5 (M.D.N.C. Sept.

14, 2018) (unpublished) (“When a plaintiff s claim for breach of the implied covenant of good faith

is based on an alleged breach of the express terms of the eaniece these two claims are treated as a

single breach of contract issue and evaluated together. ... Where a plaintiff argues that the implied

covenant was breached separate and apart from express breaches of the contract, it remains true that

the implied covenant can never produce a result contrary to, or inconsistent with, the express

language used in the agreement.” (citation omitted)). Accordingly, Challenge Printing’s breach of

implied covenant of good faith and fair dealing claim fails for the same reason as its breach of

warranty claims.

E.

Tesla next argues Challenge Printing failed to plausibly allege an unfair and deceptive trade

practices claim because it failed to comply with Federal Rule of Civil Procedure 9(b) and because

it failed to plausibly state a claim on the merits. See [D.E. 17] 18-23. Rule 9(b) provides that □□□□□

alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud

or mistake.” Fed. R. Civ. P. 9(b). “[T]he circumstances required to be pled with particularity under

Rule 9(b) are the time, place, and contents of the false representations, as well as the identity of the

person making the misrepresentation and what he obtained thereby.” Harrison v. Westinghouse

Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999) (quotations omitted); see Edmonson v. Eagle

Nat’! Bank, 922 F.3d 535, 553 (4th Cir. 2019). “[L]ack of compliance with Rule 9(b)’s pleading

requirements is treated as a failure to state a claim under Rule 12(b)(6).” Harrison, 176 F.3d at 783

21

n.5. Nonetheless, “a court should hesitate to dismiss a complaint under Rule 9(b) if the court is

satisfied (1) that the defendant has been made aware of the particular circumstances for which [it]

will have to noe a defense at trial, and (2) that plaintiff has substantial prediscovery evidence of

those facts.” Edmonson, 922 F.3d at 553 (quotation omitted); see Harrsion, 176 F.3d at 784.

An action for unfair or deceptive trade practices is distinct from a breach of contract claim.

Branch Banking & Tr. Co. v. Thompson, 107 N.C. App. 53, 61-62, 418 S.E.2d 694, 700 (1992).

Even an intentional breach of contract, standing alone, is not an unfair or deceptive trade practice.

See Bumpers v. Cmty. Bank of N. Va., 367 N.C. 81, 88, 747 S.E.2d 220, 226 (2013); Branch

Banking, 107 N.C. App. at 61-62, 418 S.E.2d at 700. However, “unfairness or deception either in

"the formation of the contract or in the circumstances of its breach” may be sufficiently immoral,

unethical, oppressive, unscrupulous, or substantially injurious to “establish the substantial

ageravating circumstances needed to support the maintenance of an unfair and deceptive trade

practices claim.” SciGrip, Inc. v. Osae, 373 N.C. 409, 426, 838 S.E.2d 334, 347 (2020); see

Bartolomeo v. S.B. Thomas, Inc., 889 F.2d 530, 535 (4th Cir. 1989); Walker v. Fleetwood Homes

of N.C., Inc., 362 N.C. 63, 72, 653 S.E.2d 393, 399 (2007) . To state an unfair and deceptive trade

practices claim, a plaintiff must plausibly allege: “(1) an unfair or deceptive act or practice, (2) in

or affecting commerce, and (3) which proximately caused injury to plaintiffs.” Walker, 362 N.C.

at 71-72, 653 S.E.2d at 399 (quotation omitted); see SciGrip, 373 N.C. at 426, 838 S.E.2d at 347.

“A practice is unfair when it offends established public policy as well as when the practice is

immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers. A practice

is deceptive if it has the capacity or tendency to deceive.” Walker, 362 N.C. at 72, 653 S.E.2d at 399

(cleaned up). “[I]t is not necessary for the plaintiff to show fraud, bad faith, deliberate or knowing

acts of deception, or actual deception, but plaintiff must show that the acts complained of possessed

22

_ the tendency or capacity to mislead, or created the likelihood of deception.” Gress v. Rowboat Co.,

Inc., 190 N.C. App. 773, 776, 661 S.E.2d 278, 281 (2008) (alteration and quotation omitted); see

Overstreet v. Brookland, Inc., 52 N.C. App. 444, 452-53, 279 S.E.2d 1, 7 (1981).

To state a claim based on alleged misrepresentations, a plaintiff must plausibly allege

“reliance on the misrepresentation in order to show the necessary proximate cause.” Bumpers, 367

N.C. at 88-89, 747 S.E.2d at 226. “Reliance, in turn, demands evidence showing that the plaintiff

‘suffered actual injury as a proximate result of defendant’s deceptive statement or misrepresentation.”

Id. at 89, 747 S.E.2d at 227 (quotation omitted). The burden of proofis similar to a fraud claim. See

id., 747 S.E.2d at 227.

As for Challenge Printing’ unfair and deceptive trade practices claim concerning the yellow-

band defect, those allegations rehash the company’s breach of warranty claims. See Am. Compl. {

114(a). A “claim of unfair and deceptive trade practices” that “is in essence a claim for breach of

warranty” is “insufficient to sustain a claim for unfair and deceptive trade practices.” Buffa v.

Cygnature Constr. & Dev., Inc., 251 N.C. App. 526, 796 S.E.2d 64, 2016 WL 7984216, at **7

(2016) (unpublished table decision); see Ellis v. Louisiana-Pacific Corp., 699 F.3d 778, 787 (4th Cir.

2012). For example, in Ellis, the plaintift alleged that the defendant “knew [the product] could not

live up to the terms of the warranty.” Ellis, 699 F.3d at 787. The Fourth Circuit held this was not

sufficient as an aggravating factor. So too here. Challenge Printing alleges Tesla knew its

touchscreens were poor quality and instead marketed them as high quality. See Am. Compl. {¥ 28,

60; [D.E. 22] 17. That allegation is essentially a breach of warranty claim without aggravating

factors sufficient to state an unfair and deceptive trade practices claim. See Ellis, 699 F.3d at 787.

23

Thus, the claim fails.°

_As for Challenge Printing’s unfair and deceptive trade practices claim concerning the alleged

warranty scheme, Challenge Printing’s allegations fall into two categories: allegations involving

misrepresentations and allegations involving unfair, unilateral changes to the warranty. See Am.

Compl. J 114(b)}He). As for Challenge Printing’s claim based on alleged misrepresentations, the

court dismisses the claim under Rule 9(b). Although Rule 9(b) applies primarily to fraud and

mistake, a strong correlation exists between a traditional fraud claim and an unfair and deceptive

trade practices claim based on detrimental reliance on deceptive misrepresentations, even when the

alleged misrepresentations do not constitute fraud. Based on that strong correlation, Rule 9(b)

applies to unfair and deceptive trade practices claims based on alleged misrepresentations. See, ¢.g.,

Cross v. Ciox Health, LLC, 438 F. Supp. 3d 572, 584-86 (E.D.N.C. 2020); Topshelf Mgmt., Inc.

v. Campbell-Ewald Co., 117 F. Supp. 3d 722, 728-32 (M.D.N.C. 2015). Challenge Printing alleges

Tesla withheld customers’ warranties, “deceptively” failed to honor the warranties, “swapp[ed] and

misrepresent[ed]” customers’ documents, and “affirmatively misrepresented to its consumers” how

changes to the warranty superseded older versions. Am. Compl. ff 79, 114(d)(e); see [D.E. 22] 18

(stating Tesla “affirmatively misrepresent[ed] plaintiffs’ warranty). Challenge Printing not plausibly

allege when these misrepresentations took place, who made them, or the particularities of the

misrepresentations’ contents. Without more detail, Tesla may not be “aware of the particular

circumstances for which [it] will have to prepare a defense at trial.” Edmonson, 922 F.3d at 553

(quotation omitted) (alteration in original). Thus, to the extent Challenge Printing relies on alleged

misrepresentations for its unfair and deceptive trade practices claim, the court dismisses the claim

5 Because this separate ground exists to dismiss plaintiffs’ claim, the court need not address

Tesla’s argument that North Carolina’s “economic loss rule” bars the claim. See [D.E. 17] 20-22. .

24

_under Rule 9(b).

Finally, Challenge Printing alleges Tesla made unilateral modifications to the warranty,

without notice to customers, that alter customers’ rights to their detriment and Tesla’s benefit. See

Am. Compl. 75-82. These allegations do not directly involve fraud or misrepresentation;

therefore, the court applies the Rule 8 pleading standard.

Assuming without deciding that Challenge Printing plausibly alleged the first two elements

of an unfair and deceptive trade practices claim, it has not plausibly alleged injury resulting from

Tesla’s alleged unfair warranty practices. Challenge Printing alleges Tesla made changes to the

warranty concerning coverage related to the mileage covered under the warranty, rust, thunderstorms,

battery life, minor adjustments made by Tesla owners, and Tesla’s use of. reconditioned parts make

repairs. See Am. Compl. {75 & n.34—38. Challenge Printing alleges these changes decrease the

value of the warranty to the car owner but does not allege by how much or how to determine that

value given that Challenge Printing alleges this injury is distinct from changes in the value of the car

itself. See Am. Compl. 77. And insofar as the warranty existing at the time of sale is the binding

warranty, Tesla’s changes to the warranty it makes available online means consumers may not have

sufficient access to the correct warranty to know and assert their rights under it. See id. { 3.

However, Challenge Printing does not plausibly allege Tesla rejected repairs Challenge Printing

needed under the warranty or that Tesla disclaimed coverage of the touchscreen in later versions of

the warranty. Stated differently, none of the warranty changes Challenge Printing alleges concern

the touchscreen, which is the component Challenge Printing needs fixed under the warranty.

Challenge Printing does not plausibly allege damage from rust, thunderstorms, diminished battery

life, Tesla putting a reconditioned touchscreen in its car, or any of the other alleged changes. Thus,

assuming without deciding that Challenge Printing plausibly alleges an unfair scheme, it does not

25

plausibly allege a particular injury it suffered as a result of the scheme. Accordingly, the court □

dismisses the claim.®

As for plaintiffs’ claim for punitive damages, it is not a stand-alone claim. See Sykes v.

Health Network Sols., Inc., 372 N.C. 326, 329, 828 S.E.2d 467, 469 (2019); Funderburk v.

JPMorgan Chase Bank, N.A., 241 N.C. App. 415, 425, 775 S.E.2d 1, 8 (2015). Because the court

dismisses plaintiffs’ other claims, the court also dismisses the claim for punitive damages.

IV.

In sum, the court GRANTS defendant’s motion to dismiss [D.E. 16], DISMISSES

WITHOUT PREJUDICE plaintiff Sasso for lack of standing under Rule 12(b)(1), DISMISSES

WITHOUT PREJUDICE Challenge Printing’s claim for a declaratory judgment for lack of subject-

matter jurisdiction, and DISMISSES WITHOUT PREJUDICE Challenge Printing’s remaining ©

claims under Rule 12(b)(6).

SO ORDERED. This 7 day of February, 2022.

ie S C. DEVER II

United States District Judge

6 Even if Challenge Printing did sufficiently allege an injury in light of its claim for injunctive ' □

relief (rather than damages), see Am. Compl. at 42, the claim for injunctive relief is moot because

Challenge Printing is no longer covered under the warranty. A court order enjoining the alleged

‘warranty scheme would not redress Challenge Printing’s injuries. See Kenny, 885 F.3d at 288.

26