Unreported / Non-Citable
Background
The California New Car Dealers Association sued Volkswagen Group of America, Inc. (VWGoA) and Scout Motors, Inc. and Scout Motors Sales LLC (together, Scout) in the Southern District of California. In a March 30, 2026 order on motions to dismiss (ECF No. 66), the court let the Unfair Competition Law (UCL) claim against Scout proceed, dismissed other claims with leave to amend, and denied VWGoA's motion to dismiss the sole UCL count against it. It also dismissed former defendant Volkswagen AG without prejudice for lack of personal jurisdiction. In that order the court construed California Vehicle Code section 11713.3(o)(1), including the phrase 'indirectly through an affiliate.' It also concluded that, even if Scout's conduct was not strictly unlawful, the plaintiff properly pleaded a UCL violation based on an unfair business act or practice. The plaintiff chose not to amend, leaving the UCL claims against VWGoA and Scout as the only live claims.
After the defendants answered, each moved for judgment on the pleadings under Rule 12(c). Both motions were filed on June 23, 2026. VWGoA offered four grounds: the complaint seeks no plausible relief against it; the court's broad reading of the statute offends substantive due process; that reading abrogates corporate separateness without evident legislative intent; and constitutional avoidance and the rule of lenity require a narrower reading under which VWGoA has no liability. Scout's motion centered on whether the plaintiff plausibly pleads claims under the 'unfair' and 'unlawful' prongs of the UCL. The court decided the motions on the papers.
The Court’s Holding
The court denied both motions under the law of the case doctrine. It explained that a Rule 12(c) motion raising a failure-to-state-a-claim defense faces the same test as a Rule 12(b)(6) motion. A Rule 12(c) motion that revisits issues already decided on a motion to dismiss is subject to the doctrine, which applies when the issue was decided expressly or by necessary implication. For VWGoA, the court found that the entire motion disagrees with the court's reading of 'indirectly through an affiliate,' an issue the parties briefed and the court decided expressly. Although VWGoA added some new grounds for a narrower construction, those arguments were available during the earlier briefing, and the court declined to give VWGoA a second bite at the apple. The court also rejected VWGoA's reliance on Rule 12(h)(2). A party may bring a Rule 12(c) motion after a motion to dismiss, but it may not use that motion to relitigate issues already decided against it.
The court found no exception to the doctrine. VWGoA did not argue the prior order was clearly erroneous and conceded the statute is 'equally susceptible' to the court's reading, it identified no intervening controlling authority, and no trial has occurred. Scout's motion fared no better. The court had already decided that the plaintiff plausibly pleads a UCL violation against Scout, and Scout identified no changed facts, new authority, or clear error. The court also said VWGoA's motion appears to be an untimely reconsideration motion. Under the local rule, a reconsideration motion is due within 28 days of the ruling, and these motions came nearly two months after that window. The conclusion states that both motions are denied without prejudice, but the order does not say what further relief, if any, that label leaves open.
Key Takeaways
- A Rule 12(c) motion cannot be used to relitigate issues the court already decided against the movant on a prior motion to dismiss, even if the motion adds new arguments.
- New arguments that were available during the earlier motion-to-dismiss briefing do not avoid the law of the case doctrine.
- The doctrine yields only if the prior ruling was clearly erroneous and would work a manifest injustice, controlling authority has intervened, or substantially different evidence emerged at a later trial.
- Rule 12(h)(2) preserves the failure-to-state-a-claim defense but does not authorize a second round of argument on an issue already decided.
- A party unhappy with a pleading-stage ruling should seek reconsideration within the time allowed by the local rules rather than repackaging the challenge as a Rule 12(c) motion.
Why It Matters
The order is a procedural ruling and does not decide the merits of the UCL claims or the meaning of section 11713.3(o)(1) anew. It leaves intact the earlier construction of the statute and the finding that the UCL claims against VWGoA and Scout are plausibly pleaded. Those two claims remain the only live claims in the case, and the order does not address discovery, class issues, or relief.
The decision is an unreported district court order, so it has limited precedential weight. It is useful mainly as an application of familiar law of the case principles to a defense strategy of following a denied motion to dismiss with a Rule 12(c) motion. The 'without prejudice' label appears only in the conclusion, and the court's reasoning suggests it offers little room to renew the same arguments at this stage.