## Facts

- William Ray Kearns brought a putative class action against Ford Motor Company and a Ford dealership over marketing of “Certified Pre-Owned” (CPO) vehicles.
- Ford marketed CPO vehicles as late-model used cars that undergo a stringent inspection and certification process, allegedly making them safer and more reliable than ordinary used cars and justifying a premium price.
- Kearns alleged Ford’s CPO advertising and marketing contained false or misleading statements and omitted material information about Ford’s limited oversight of the certification process.
- The complaint asserted claims under California’s Consumers Legal Remedies Act (CLRA) and Unfair Competition Law (UCL) based on allegedly deceptive marketing that induced consumers to purchase CPO vehicles.
- After removal to federal court on diversity grounds, the district court dismissed Kearns’s Third Amended Complaint under Federal Rule of Civil Procedure 9(b) for failure to plead fraud with particularity; Kearns declined further amendment and appealed.

## Issues

1. Whether Federal Rule of Civil Procedure 9(b) applies to CLRA and UCL claims in federal court when the claims are grounded in fraud.
2. Whether the Third Amended Complaint alleged the “who, what, when, where, and how” of the claimed misrepresentations and nondisclosures with sufficient particularity to satisfy Rule 9(b).
3. Whether the district court was required to separately analyze a UCL “unfair” theory as distinct from fraud-based allegations.
4. Whether any error in striking a footnote from the complaint required appellate relief.

## Decision

- The Ninth Circuit affirmed the dismissal of the Third Amended Complaint.
- The court held Rule 9(b) applies to CLRA and UCL claims that sound in fraud, even if those statutes do not require particularity as a matter of state pleading practice.
- The court concluded the complaint, taken as a whole, was grounded in fraud because it centered on alleged deception in Ford’s CPO marketing and oversight disclosures.
- The court held Kearns failed to plead fraud with particularity because the complaint did not identify the specific representations he encountered, when and where he encountered them, or how they were misleading in light of the actual CPO practices.
- The court found no need for a separate UCL “unfairness” analysis where the asserted unfairness theory depended on the same alleged deceptive conduct.
- Because dismissal was proper on Rule 9(b) grounds, the challenge to the order striking the footnote was treated as moot.

## Legal Principles

- In federal court, Rule 9(b) governs any claim that is grounded in fraud, regardless of the state-law label attached to the cause of action.
- CLRA and UCL claims are subject to Rule 9(b) when the gravamen of the complaint is deceptive or misleading conduct.
- A plaintiff cannot avoid Rule 9(b) by recasting a fraud theory as nondisclosure or “unfair” conduct if the alleged wrong is still deception-based.
- Rule 9(b) requires particularized allegations identifying the circumstances of the alleged fraud, commonly described as the “who, what, when, where, and how.”

## Conclusion

The Ninth Circuit affirmed dismissal of consumer-protection claims challenging Ford’s CPO marketing because the claims sounded in fraud and were required, but failed, to meet Rule 9(b)’s particularity standard; a separate UCL unfairness analysis and a dispute over striking a footnote did not alter that result.


Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009)