Wilson et al v. Volkswagen Group of America Inc. et al

Filing 78

ORDER granting in part and denying in part 34 Motion to Dismiss. Signed by Judge Robert N. Scola, Jr on 9/26/2018. See attached document for full details. (ail)

United States District Court
for the
Southern District of Florida
Lila Wilson and others, Plaintiffs,
v.
Volkswagen Group of America, Inc.
and Volkswagen AG, Defendants.

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Civil Action No. 17-23033-Civ-Scola
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Order on Motion to Dismiss
The Plaintiffs in this case are fifteen individuals from fourteen different
states who claim to own or lease 2010 to 2015 Volkswagen CC model cars.
They assert, both individually and on behalf of a putative nationwide class and
multiple state subclasses, against Defendants Volkswagen Group of America,
Inc. and Volkswagen AG (collectively “VW”), that their cars suffer from
suspension-system defects. These defects prevent certain adjustments to their
cars’ alignments which in turn result in persistent premature wear and
degradation of their cars’ tires. Based on the defect, the Plaintiffs, or a subset
thereof, have set forth twenty-nine counts against VW: the nationwide class
asserts claims for violations of the Magnuson-Moss Warranty Act, common-law
fraud, common-law breach of express and implied warranty; and on behalf of
the state subclasses, the Plaintiffs also assert claims for the violation of various
state consumer-protection, product-liability, advertising, warranty, and
deceptive-and-unfair-trade-practice statutes. Of the Plaintiffs’ twenty-nine
claims, VW argues that twenty-one should be dismissed for a variety reasons,
including: not meeting the heightened pleading standard required for fraud
claims; failure to plead VW’s knowledge of the defect; failure to properly allege
the Plaintiffs’ reliance on or awareness of VW’s misrepresentations; expiration
of the warranty period; failure to properly allege defects in materials or
workmanship; failure to provide pre-suit notice; expiration of various statutes
of limitations; and the economic loss rule. (Def. Volkswagen Group of America’s
Mot. to Dismiss, ECF No. 34 (the “Jt. Mot.”).)1 For the following reasons, the
Court grants VW’s motion in part and denies it in part.

Defendant Volkswagen AG joined Defendant Volkswagen Group of America’s motion
in addition to filing its own motion, which the Court maintains under advisement.
(Def. Volkswagen AG’s Mot. to Dismiss, ECF No. 49, 1.)

1

1. Background2
The fifteen named Plaintiffs in this case are individuals from fourteen
different states, who bought or leased VW CC model cars beginning in 2011
through 2016.3 The model years span from 2010 through 2015. The
suspension components of each of these cars, and apparently all CC models
purchased since 2009 (ECF No. 26, Am. Compl. at ¶ 5–6), are, according to the
Plaintiffs, defective (id. at ¶ 19). Because of this defect, technicians are unable
to properly adjust the cars’ front and rear camber—the angle at which each tire
slants away from the vertical axis while being viewed from the front or back of
the vehicle. (Id. at ¶¶ 13, 19.) Ordinarily, all cars’ tires will eventually deviate
from their manufacturer’s alignment specifications—either as soon as they roll
off the assembly line or through normal use. (Id. at ¶ 20.) However, because of
the CC’s suspension-component defects, these cars’ misaligned cambers simply
cannot be corrected. (Id. at ¶ 21.) As a result of this irreversible misalignment,
the CC models inevitably develop improper and accelerated tire wear. (Id. at ¶
22.) When these tires are replaced, the new tires suffer the same fate. (Id. at ¶
23.)
VW has instructed its dealers to cover up the problem by telling owners
and lessees that the tire wear is the result of, variously, erratic driving or faulty
tires. (Id. at ¶ 24.) Per VW’s instructions, the dealers tell the drivers that the
only solution is to repeatedly replace the prematurely worn tires. (Id.) The
Plaintiffs say the defects could be fixed by replacing the defective control-arm
assemblies with different, aftermarket assemblies that allow for camber
adjustments, but VW refuses to offer this as a solution. (Id. at ¶ 27–29.) The
Plaintiffs surmise that VW refuses to authorize or publicize this solution
because (1) it does not want to acknowledge the defect; and (2) VW’s express
warranty would require it to pay for the cost to replace defective parts and
workmanship. (Id. at ¶ 29–31.) On the other hand, the warranty does not cover
tire repairs or replacement. (Id. at ¶ 31.) As a result, the Plaintiffs, and other
purchasers and lessees, have had to pay extra for tire replacements, suffered a

This background is based on the Plaintiffs’ complaint allegations, which the Court
accepts as true and construes in the light most favorable to the Plaintiffs per Federal
Rule of Civil Procedure 12(b)(6).

2

The Plaintiffs and the states from which they hail are as follow: Lila Wilson (Florida);
Matthew Martino (New Jersey); Thomas Wilson & Jorge Cruz (Texas); Teresa Garella
(Pennsylvania); Mary Blue (Missouri); Ryan Brown (North Carolina); Nick Panopoulos
(Ohio); Brian Maytum (California); Leigh Glasband (Georgia); Carissa Macchione (New
York); Sydnee Johnson (Virginia); Debbie Gray (Louisiana); Lorne Spelrem (Arizona);
and Israel Orrantia (Utah).

3

diminution in the value of their cars, and did not receive the benefit of their
bargains. (Id. at ¶¶ 38, 59.)
VW has known about, or should have known about, the defective
suspension components since at least 2010 but has actively concealed and
failed to disclose the defect to the Plaintiffs or any other purchasers or lessees.
(Id. at ¶ 33.) Beginning in at least 2010, thousands of CC drivers have
complained to dealers about improper and accelerated tire wear. (Id. at ¶¶ 200–
201). Through its close supervision of its dealerships, VW itself learned of these
complaints almost immediately. (Id. at ¶ 203.) Further, by at least August
2013, VW customers were filing complaints with the National Highway
Transportation Safety Administration (“NHTSA”) about the problems with the
improper and accelerated tire wear. (Id. at ¶ 220.) VW monitors the NHTSA’s
database and reviews complaints about its cars. (Id. at ¶ 219.) Additionally,
complaints about the CC model’s tires began appearing on online message
boards and forums devoted to VWs in July 2011. (Id. at ¶ 223.) VW monitors
these postings as well. (Id. at ¶ 222.)
VW made material misstatements and omissions to CC buyers through
their owner’s manuals, warranty booklets, new vehicle limited warranties, and
dealerships. VW, itself and through its dealerships, also refused to
acknowledge the suspension defect and declined to fix any of the CCs. Instead,
CC drivers had to continually incur the expenses of having to maintain, repair,
and replace their prematurely worn and degraded tires. Their cars’ values are
also diminished. Through their complaint, the Plaintiffs seek damages under a
number of theories: violations of the Magnuson-Moss Warranty Act; common
law and state law claims of fraud and breach of implied and express
warranties; and then dozens of claims under various state statutes.
2. Legal Standard
When considering a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), the Court must accept all of the complaint’s allegations as
true, construing them in the light most favorable to the plaintiff. Pielage v.
McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). A pleading need only contain
“a short and plain statement of the claim showing that the pleader is entitled to
relief.” Fed. R. Civ. P. 8(a)(2). “[T]he pleading standard Rule 8 announces does
not require detailed factual allegations, but it demands more than an
unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quotation omitted). A plaintiff must articulate
“enough facts to state a claim to relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007).

“A claim has facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The plausibility
standard is not akin to a ‘probability requirement,’ but it asks for more than a
sheer possibility that a defendant has acted unlawfully.” Id. “Threadbare
recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id. Thus, a pleading that offers mere “labels and
conclusions” or “a formulaic recitation of the elements of a cause of action” will
not survive dismissal. See Twombly, 550 U.S. at 555. “Rule 8 marks a notable
and generous departure from the hyper-technical, code-pleading regime of a
prior era, but it does not unlock the doors of discovery for a plaintiff armed
with nothing more than conclusions.” Iqbal, 556 U.S. at 679.
Where a cause of action sounds in fraud, Federal Rule of Civil Procedure
9(b) must be satisfied in addition to the more relaxed standard of Rule 8. Under
Rule 9(b), “a party must state with particularity the circumstances constituting
fraud or mistake,” although “conditions of a person’s mind,” such as malice,
intent, and knowledge, may be alleged generally. Fed. R. Civ. P. 9(b). “The
‘particularity’ requirement serves an important purpose in fraud actions by
alerting defendants to the precise misconduct with which they are charged and
protecting defendants against spurious charges of immoral and fraudulent
behavior.” W. Coast Roofing & Waterproofing, Inc. v. Johns Manville, Inc., 287 F.
App’x 81, 86 (11th Cir. 2008) (citations omitted). “When a plaintiff does not
specifically plead the minimum elements of their allegation, it enables them to
learn the complaint’s bare essentials through discovery and may needlessly
harm a defendant’s goodwill and reputation by bringing a suit that is, at best,
missing some of its core underpinnings, and, at worst, [grounded on] baseless
allegations used to extract settlements.” U.S. ex rel. Clausen v. Lab. Corp. of
Am., Inc., 290 F.3d 1301, 1313 n.24 (11th Cir. 2002). Thus, the Rule’s
“particularity” requirement is not satisfied by “conclusory allegations that
certain statements were fraudulent; it requires that a complaint plead facts
giving rise to an inference of fraud.” W. Coast Roofing & Waterproofing, 287 F.
App’x at 86. To meet this standard, the complaint needs to identify the precise
statements, documents, or misrepresentations made; the time and place of,
and the persons responsible for, the alleged statements; the content and
manner in which the statements misled the plaintiff; and what the defendant
gained through the alleged fraud. Id.
3. Express-Warranty Claims
In its motion to dismiss, VW argues that the Plaintiffs’ express-warranty
claims must be dismissed for a variety of reasons.

A. Warranty Limitation Allegations
To begin with, the Court agrees with VW that the amended complaint
does not allege express warranty claims with respect to Plaintiffs Blue
(Missouri), Brown (North Carolina), Spelrem (Arizona), and Glasband (Georgia).
By its terms, the amended complaint alleges a breach of the express warranty
“only on behalf of those Plaintiffs and other Class Members who returned their
Class Vehicles for service at an authorized [VW] dealership within the warranty
period.” (Am. Compl. at ¶ 328.) As set forth by VW, and left unrebutted by the
Plaintiffs, none of these four Plaintiffs alleges they sought tire repairs or
replacement within the applicable 3-year/36,000 mile warranty period. (Jt.
Mot. at 3 n. 4.) Thus, the Court grants VW’s motion to dismiss the express
warranty claims with respect to these four Plaintiffs.
B. Notice
VW also submits that Glasband (Georgia), Blue (Missouri), and T. Wilson
& Cruz’s (Texas) express warranty claims must be dismissed because they
either do not allege providing notice or their notice attempt failed. Because
Glasband (Georgia) and Blue (Missouri) have failed to allege their express
warranty claims, as set forth above, the Court will not evaluate whether they
also failed to comply with their state’s express warranty notice requirements.
With respect to T. Wilson and Cruz, however, the Court disagrees with VW. As
set forth by the Plaintiffs, under Texas law, a buyer need only communicate “[a]
general expression of [his] dissatisfaction” with the product in order to comply
with Texas’s notice requirement. Lochinvar Corp. v. Meyers, 930 S.W.2d 182,
190 (Tex. App. 1996). Both Plaintiffs allege notifying authorized VW dealers, as
directed to by VW, of their complaints about their tires. (Am. Compl. at ¶¶ 89–
90; 171–72.) The complaint also alleges that the dealers then forwarded this
information directly to VW. (Id. at ¶¶ 209– 12.) This satisfies the requirement,
as identified by VW, that a buyer provide notice of his dissatisfaction to a
remote manufacturer.
C. Louisiana Express Warranty Claims
The Court agrees with VW that Gray’s (Louisiana) express-warranty claim
should be dismissed. Under Louisiana law, a claim for breach of express
warranty is subsumed within the Louisiana Product Liability Act and is not
viable as an independent theory of recovery against a manufacturer. Touro
Infirmary v. Sizeler Architects, 947 So. 2d 740, 744, 2004-2210 (La. App. 4 Cir.
11/21/06) (“Courts have consistently held the LPLA subsumes all possible
causes of action, with the exception of a claim in redhibition. Hence, the breach

of express warranty is encompassed by the LPLA and is no longer viable as an
independent theory of recovery against a manufacturer.”) The Plaintiffs do not
appear to disagree. The Court thus dismisses Gray’s express-warranty claim.
D. Design Versus Material-and-Workmanship Defects
Next, VW argues that the New Vehicle Limited Warranties (the “NVLW”)
that apply to the Plaintiffs’ car do not cover design defects and therefore do not
cover the defects the Plaintiffs allege. According to VW, the Plaintiffs allege only
design defects and not defects in material and workmanship (which are covered
by the NVLW). In support of its contention, VW cites three paragraphs from the
Plaintiffs’ 738-paragraph-long complaint. In one paragraph the Plaintiffs allege,
“Properly designed and functioning suspension components should allow a
technician to adjust the vehicle’s camber in the event that it deviates from the
manufacturer’s alignment specifications, either because of normal use or
because it came off the assembly line misaligned.” (Am. Compl. at ¶ 18.) In
another paragraph the Plaintiffs allege, within their Magnuson-Moss Warranty
Act count, “[w]ithout limitation, the Class Vehicles share a common design
defect.” (Id. at ¶ 287.) And finally, in the third paragraph, the Plaintiffs, in their
fraud count, refer to “the Defect that exists because of, among other things,
improperly designed and installed suspension components in the Class
Vehicles.” (Id. at ¶ 304.) These three paragraphs alone are a slender reed and
“do[] not foreclose the possibility that th[e alleged defect] is caused by some sort
of persistent manufacturing defect.” Bearden v. Honeywell Int'l Inc., No. 3:091035, 2010 WL 3239285, at *7 (M.D. Tenn. Aug. 16, 2010). At this stage of the
case, this Court must not only accept all of the Plaintiffs’ allegations as true,
but must also construe those allegations in the light most favorable to them.
See Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). As the
Plaintiffs have pointed out, they have alleged entitlement, under the express
warranty, to compensation “for the replacement of defective parts and
workmanship.” (Am. Compl. at ¶ 31.) It is entirely possible that a
manufacturing irregularity permeated the production of all CCs during the
timeframe outlined in the complaint. The Court thus denies VW’s motion to
dismiss the express warranty claim on this ground.4

In a footnote, VW asks the Court to at least dismiss the express warranty claim
“insofar as it is based on a design defect.” (Jt. Mot. at 4 n. 5.) The Court denies the
request. If the Plaintiffs ultimately establish a materials or workmanship defect, rather
than a design defect, the Court need not ever address whether the warranty extends to
a design defect. If they do not, the Court will take up the issue at that time.

4

E. Time Bar
Finally, VW submits that Panopoulos (Ohio), T. Wilson (Texas), Spelrem
(Arizona), and Johnson’s (Virginia) express-warranty claims should all be
dismissed because their states all impose a four-year statute of limitations on
breach of warranty claims, running from the date of delivery, with no discovery
rule (except where a warranty explicitly extends to future performance). (Jt.
Mot. at 5.) Accordingly, says VW, since all four of these Plaintiffs bought their
cars more than four years before filing their complaint, their claims are time
barred. (Id.) Because Spelrem (Arizona) failed to properly allege his expresswarranty claim, as set forth above, the Court will not evaluate whether his
claim is also barred by Arizona’s statute of limitations.
The parties agree that even where a claim is filed beyond the four-year
mark, affirmative and active concealment, preventing a plaintiff from timely
bringing suit, can toll these states’ limitations periods. Effectively pleading
such concealment is subject to Federal Rules of Civil Procedure 9(b)'s
requirement that “the circumstances constituting fraud shall be stated with
particularity.” Speier-Roche v. Volkswagen Grp. of Am. Inc., No. 14-20107-CIV,
2014 WL 1745050, at *7 (S.D. Fla. Apr. 30, 2014) (Moreno, J.) (quotation
omitted). That is, “the circumstances of the fraud must be alleged with
specificity, i.e. the ‘who, what, when, where, and how’ of the alleged fraud.” Id.
(quotation omitted). Further, allegations of “inaction and nondisclosure are
wholly insufficient to supply the affirmative steps taken to prevent [the]
Plaintiffs from discovering the basis of their claims that would be necessary
before tolling based on fraudulent concealment becomes appropriate.” Licul v.
Volkswagen Grp. of Am., Inc., No. 13-61686-CIV, 2013 WL 6328734, at *6 (S.D.
Fla. Dec. 5, 2013) (Cohn, J.) “The ‘fraudulent means’ alleged must go beyond
nondisclosure, and constitute active and willful concealment.” Id. (citing Raie v.
Cheminova, Inc., 336 F.3d 1278, 1282 n.1 (11th Cir. 2003)).
VW maintains that the Plaintiffs’ allegations do not sufficiently plead
fraudulent concealment or estoppel with the required Rule 9(b) specificity. In
opposition, the Plaintiffs insist that their complaint “meticulously avers that
[VW] affirmatively and actively concealed the [d]effect.” (Pls.’ Resp. at 13.)
According to the Plaintiffs, they adequately pleaded that VW “(1) intentionally
put misleading statements in the Owner’s Manual and in the NVLW; (2)
knowingly misled the Plaintiffs into believing that their [tire complaints had]
nothing to do with the [d]effect; and (3) directed its authorized dealerships to lie
to the Plaintiffs about the causes of the premature tire wear . . . .” (Id.) In
support, the Plaintiffs cite to a number of paragraphs in their complaint. These
paragraphs set forth, variously: general and conclusory allegations related to

VW’s attempt to cover up the defect (Am. Compl. at ¶¶ 24–25, 32–34, 225, 253,
256); allegations relating to VW’s awareness and knowledge of the defect (id. at
¶¶ 33, 224, 253); allegations that specific dealerships in New Jersey, Texas,
Ohio, Virginia, Louisiana, and Arizona reported their customers’ complaints to
VW and that VW, in response, at some point, told the dealerships there was no
defect and that they should so inform their customers (id. at ¶¶ 86, 95, 127,
163, 180, 188); allegations that VW failed to disclose the defect to the Plaintiffs
(id. at ¶ 224); and statements VW made in its owner’s manuals, warranty
booklets, and new vehicle limited warranties (id. at ¶¶ 227–37).
These allegations, however, do not satisfy the particularity requirements
of Rule 9(b) with respect to the Plaintiffs’ tolling argument. That is, these facts
do not adequately plead the “who, what, when, where, and how” of the alleged
fraudulent concealment of the cause of action itself or the estoppel necessary
to support tolling. Further, the statements the Plaintiffs point to that VW made
in its owner’s manuals, warranty booklet, and new vehicle limited warranties
do not establish active fraudulent concealment. At most these statements could
be construed either as VW’s failure to disclose the defect or part of a broader
scheme that ultimately played into VW’s alleged attempt to conceal the defect.
But, standing alone, these statements do not themselves sufficiently allege
active concealment of the defect. Nor do the mostly anonymous online
complaints the Plaintiffs cite to sufficiently allege VW’s fraudulent concealment.
(Pls.’ Resp. at 12 n. 20.) None of the online complaints themselves are
presented as actual allegations. Instead, the Plaintiffs rely on them for the
purpose of pleading VW’s knowledge of the defect. Even when reading the
complaint in the light most favorable to the Plaintiffs, the Court simply cannot
construe these online complaints, unassociated with any of the Plaintiffs in this
case, as properly pleading the fraudulent concealment or estoppel required for
tolling the statute of limitations for an express-warranty claim. As a result, the
Court grants VW’s motion to dismiss with respect to Plaintiffs Panopoulos, T.
Wilson, and Johnson’s express-warranty claims.
4. Implied Warranty
A. Warranty Limitations
VW seeks dismissal of a number of the implied warranty claims
presented by some of the Plaintiffs. In particular, VW contends that Plaintiffs
Blue (Missouri), Brown (North Carolina), Glasband (Georgia), and Spelrem’s
(Arizona) implied warranty claims should be dismissed because none of them
allege they sought repairs, or even that their tires were prematurely worn,
within the applicable 3-year or 36,000 warranty period. Further, explains VW,

both Brown and Glasband purchased their cars used, long after the warranty
periods expired. The Plaintiffs counter that they have pleaded facts alleging
that the warranty limitations are unconscionable and therefore unenforceable.
In Missouri, North Carolina, and Georgia, a contract clause is
unconscionable only if it is both procedurally and substantively
unconscionable. In Arizona, unconscionability can be either procedural or
substantive. In support of their contention that they have properly pleaded
unconscionability, the Plaintiffs point to the following complaint allegations: (1)
“Any efforts to limit th[e] warranty in a manner that would exclude coverage of
the Class Vehicles is unconscionable . . .” (Am. Compl. at ¶ 247); (2) the
warranty limitation is procedurally unconscionable because “[t]here was
unequal bargaining power between [VW] . . . and the Plaintiffs” (id. at ¶ 248);
and (3) the warranty limitation is substantively unconscionable because “[VW]
knew that the Class Vehicles were defective and would continue to pose safety
risks after the warranties purportedly expired[;] failed to disclose the [d]efect[;]
and . . . actively concealed the existence of the [d]efect and prevented the
Plaintiffs . . . from discovering it” (id. at ¶ 249).
The Court agrees that “broad allegations of procedural unconscionability,
stating simply that there was unequal bargaining power and there was lack of
meaningful choice relating to the limitations on the warranties are insufficient
to survive a motion to dismiss.” In re Takata Airbag Prods. Liab. Litig., 2016
U.S. Dist. LEXIS 138976, *170 (S.D. Fla. Sep. 29, 2016) (Moreno, J.)
(alterations omitted) (quoting Marchante v. Sony Corp. of Am., Inc., 801 F. Supp.
2d 1013, 1022 (S.D. Cal. 2011). Because the Plaintiffs do not point to anything
other than their allegation of unequal bargaining power between the parties,
they have failed show that they have properly pleaded procedural
unconscionability. Thus, the Court grants VW’s motion to dismiss with respect
to Blue, Brown, and Glasband’s implied warranty claims pleaded under count
three as well as Blue’s implied warranty claim under Missouri statutes set forth
in count fifteen.
The Plaintiffs’ allegations regarding substantive unconscionability,
however, are sufficient to get Arizona Plaintiff Spelrem past the pleading stage.
The parties appear to agree that a contract is substantively unconscionable
only if its terms are so unfair “as to be overly oppressive or unduly harsh to
one of the parties.” Crawford Prof’l Drugs, Inc. v. CVS Caremark Corp., 748 F.3d
249, 263 (5th Cir. 2014). As set forth by the Plaintiffs, they have alleged that (1)
VW knew about the defect; (2) the Plaintiffs lacked notice of the defect or an
opportunity to discover it prior to the sale; (3) VW knew that the Plaintiffs
would have to cover the costs springing from the defect; and (4) VW knew the
defect would render the cars unsafe. The Court finds that the Plaintiffs have, as

set forth above, alleged enough to meet the substantively unconscionable
standard. Thus, the Court denies VW’s motion to dismiss the implied warranty
claim, under count three, against Spelrem.
B. Privity
Next, VW argues that Plaintiffs Glasband (Georgia), Brown (North
Carolina), and Panopoulos’ (Ohio) implied warranty claims fail for lack privity
with VW. Because the Court has already dismissed Glasband and Brown’s
implied warranty claims as set forth above, it will only consider the parties’
arguments with respect to Ohio Plaintiff Panopoulos.
As pointed out by VW, “[i]n Ohio, damages are recoverable for breach of
implied warranties only if there is privity of contract between the parties.” Curl
v. Volkswagen of Am., Inc., 114 Ohio St. 3d 266, 271 (Ohio 2007). Vertical
privity exists, in Ohio, “only between immediate links in the distribution
chain.” Id. at 273. The Plaintiffs maintain that “privity will lie between a
manufacturer and an ultimate consumer if either the manufacturer is so
involved in the sales transaction that the distributor merely becomes the
manufacturer’s agent or if the consumer is an intended third-party beneficiary
to a contract.” (Pls.’ Resp. at 7 (quoting Norcold, Inc. v. Gateway Supply Co.,
798 N.E.2d 618, 628 (Ohio App. 3d Dist. 2003).)
To begin with, the Court disagrees with the Plaintiffs’ contention that
Panaopoulos can satisfy Ohio’s privity requirement by alleging he is a thirdparty beneficiary. Federal district courts sitting in Ohio, interpreting Ohio law
have rejected a third-party-beneficiary exception to Ohio’s privity requirements.
See, e.g., Traxler v. PPG Industries, Inc., 158 F. Supp. 3d 607, 625 (N.D. Ohio
2016); McKinney v. Bayer Corp., 744 F. Supp. 2d 733, 758 (N.D. Ohio 2010)
(referring to the Ohio Supreme Court’s “unequivocal language” in declining to
apply a third-party-beneficiary exception to an implied-warranty claim). The
Court finds these cases persuasive and declines to apply the third-party
beneficiary exception to Panopoulos’s implied-warranty claim.
On the other hand, the Court finds the Plaintiffs have sufficiently alleged
that the duty of the VW dealership that Panopoulos purchased his car from
was “to act primarily for the benefit of the one delivering the goods to [it]”
rather than “act[ing] primarily for [its] own benefit.” Traxler, 158 F. Supp. 3d at
622 (citing Curl, 871 N.E.2d at 1148.) The Plaintiffs point to factual allegations
in their complaint detailing support for their contention: VW “has instructed its
dealers to cover up the [suspension] problem” (Am. Compl. at ¶¶ 24, 32); VW
requires owners to take their cars to authorized [VW] dealerships for any
warranty work (id. at ¶ 197); VW closely supervises its dealerships (id. at ¶
203); any repair on a VW car conducted at a VW dealership is entered into a

database that is maintained and accessible to VW (id. at ¶ 209); “[VW] acts
through numerous authorized dealers who act, and represent themselves to
the public, as exclusive VW representatives and agents” (id. at ¶ 239); “[VW],
through its authorized dealerships, issued its warranties in the NVLW to the
Plaintiffs and other Class Members as part of the sale of the Class Vehicles” (id.
at ¶ 240); “[VW] exercises and maintains the right to exercise day-to-day
control over the activities of its authorized dealers” (id. at ¶ 245). Indeed, the
Plaintiffs have alleged enough to show that VW “is so involved in the sales
transaction that the distributor merely becomes the manufacturer’s agent.”
Norcold, Inc., 798 N.E.2d at 628. Thus the Court denies VW’s motion to dismiss
Panopoulos’s implied-warranty claim because of a lack of privity.
C. Notice
Next, VW submits that Plaintiffs Glasband (Georgia), Blue (Missouri), and
T. Wilson and Cruz’s (Texas) claims for breach of implied warranty should also
be dismissed for failing to provide pre-suit notice to VW. VW relies on the
reasoning it presented to support its notice argument regarding these Plaintiffs’
express-warranty claims. Because the Court already concluded the Texas
Plaintiffs’ notice was sufficient regarding their express-warranty claims, it also
finds their notice sufficient regarding their implied-warranty claims. The Court
declines to evaluate the notice issue with respect to Glasband and Blue,
however, because their implied-warranty claims have already been dismissed
as set forth above.
D. Statute of Limitations
VW contends that Plaintiffs Martino (New Jersey), Panopoulos (Ohio), T.
Wilson (Texas), Spelrem (Arizona), Johnson (Virginia), and Gray’s (Louisiana)
implied-warranty claims should be dismissed as time barred based on their
respective states’ statutes of limitations.
With respect to Plaintiffs Martino, Panopoulos, T. Wilson, Spelrem, and
Johnson, the parties appear to agree that the applicable statute of limitations
for an implied-warranty claim, accruing at the time of sale, is four years. (Jt.
Mot. at 10 (citing the relevant statutory provisions from New Jersey, Ohio,
Texas, Virginia, and Arizona).) However, like they did in response to VW’s
contention that Plaintiffs Panopoulos, T. Wilson, Spelrem, and Johnson’s
express warranty claims are time barred, the Plaintiffs again rely on their
allegations of fraudulent concealment to toll the limitations period. For the
same reasons that argument failed to convince with respect to the Plaintiffs’
express-warranty claims, it fails to convince with respect to the Plaintiffs’

implied-warranty claims. The Court thus grants VW’s motion to dismiss, as
time barred, as to Plaintiffs Martino, Panopoulos, T. Wilson, Spelrem (Arizona),
and Johnson’s (Virginia) implied-warranty claims under count three as well as
Martino, T. Wilson, and Johnson’s state statute implied-warranty claims set
forth in, respectively, counts sixteen, twenty-five, and twenty-nine.
VW’s motion with respect to Plaintiff Gray (Louisiana), however, is
denied. VW submits that Gray’s implied-warranty claim should be dismissed
because the time limit for filing an action in redhibition against a seller who
was not aware of the existence of a defect is four years from the day of delivery
or one year from the buyer’s discovery of the defect, whichever comes first. (Jt.
Mot. at 10 (quoting La. Civ. Code art. 2534A.(1)).) According to VW, because
Gray bought her car in 2012 and didn’t file suit until November 2017 (her
claims were added through the amended complaint), her claim is time barred.
In opposition, the Plaintiffs point out that VW’s reliance on this provision is
misplaced because the complaint alleges that VW was, in fact, aware of the
defect. In contrast to 2534A, provision 2534B provides that an “action for
redhibition against a seller who knew, or is presumed to have known, of the
existence of a defect in the thing sold prescribes in one year from the day the
defect was discovered by the buyer.” La. Civ. Code art. 2534B. Gray has
submitted an unrebutted affidavit declaring that she did not discover the defect
until December 2016. Because VW has not rebutted the Plaintiffs’ argument or
factual presentation, it has failed to convince the Court that Gray’s impliedwarranty or redhibition claim is time barred.
5. Fraud Claims
Finally, for a variety of reasons, VW argues that many of the Plaintiffs’
claims that involve allegations of fraud should be dismissed. To begin with the
Court disregards VW general contention that all of the Plaintiffs’ fraud claims
should be dismissed for their failure to meet the heightened particularity
standard of Rule 9(b). VW does not specify which aspects of the Plaintiffs’ fraud
claims are deficient. Without any direction, the Court declines to dismiss any of
the Plaintiffs’ claims on this overly generalized basis.5
VW also contends that the Plaintiffs have impermissibly lumped both Defendants
together, in violation of Rule 8’s pleading standards. The Court does not find this fatal,
however, to the Plaintiffs’ complaint. Instead, the Court finds “[t]he complaint can be
fairly read to aver that [both] defendants are responsible for the alleged conduct.” Kyle
K. v. Chapman, 208 F.3d 940, 944 (11th Cir. 2000). This case is distinguishable from
that cited by VW where five defendants were lumped together, three of whom were
individuals and two of which were corporations and it was impossible to tell which
defendants were responsible for which acts. Lane v. Capital Acquisitions and Mgt. Co.,

5

A. Misrepresentation claims
VW’s argument regarding affirmative misrepresentation is similarly
generalized and presented in somewhat piecemeal fashion. VW urges the Court
to dismiss all of the “Plaintiffs’ fraud claims that are based on affirmative
misrepresentations.” (Jt. Mot. at 12.) Which particular counts or which
Plaintiffs does this apply to? VW doesn’t say. The Plaintiffs’ common-law claims
of fraud allege fraudulent concealment and fraudulent inducement. In support
of these claims, the Plaintiffs maintain that VW “concealed, suppressed, and/or
misrepresented material facts regarding the [d]efect.” (E.g., Am. Compl. at ¶
301.) The Plaintiffs further contend that they relied on these concealed,
suppressed, and/or misrepresented facts in “purchasing, leasing or retaining”
their cars. (E.g., Am. Compl. at ¶ 306.) VW complains that the “Plaintiffs’ only
allegations asserting affirmative misrepresentations by [VW] involve statements
printed in the owner’s manuals and warranty booklets given to purchasers of
CC vehicles.” (Jt. Mot. at 12 (emphasis in original).) To begin with, these are
not the only affirmative-misrepresentation allegations set forth in the
complaint—instead the Plaintiffs have alleged a number of other false
statements they contend were made, after acquiring their cars, in response to
their complaints about their tires’ premature wear. Further, the Plaintiffs’
common law fraud claims are not premised solely on damages resulting from
their purchase of the cars, but for retaining them as well. Similarly, the
Plaintiffs’ fraud claims are also based on VW’s concealing and suppressing
facts. Thus, VW’s argument that the Plaintiffs’ claims must be dismissed
because they have not alleged reliance on any particular misrepresentation
prior to buying their cars misses the mark.
Moreover it appears that VW does not intend its argument regarding
affirmative misrepresentation to dispense with the entirety of any particular
claim but instead presses the Court to preclude the Plaintiffs from pursuing
their claims in only one limited regard—presumably limiting the theories under
which the Plaintiffs might pursue their various fraud claims but not foreclosing
04-60602 CIV, 2006 WL 4590705, at *5 (S.D. Fla. Apr. 14, 2006) (Marra, J.), aff'd sub
nom. Lane v. XYZ Venture Partners, L.L.C., 322 Fed. App’x 675 (11th Cir. 2009). Here,
the Court interprets the Plaintiffs’ allegations against both Defendants to mean that
the Plaintiff has a good faith belief to allege that both Defendants were equally and
coextensively responsible for the alleged conduct. Furthermore, although VW didn’t
raise this issue under Rule 9(b), the Court nonetheless notes that “Rule 9(b)’s
heightened pleading standard may be applied less stringently . . . when specific factual
information about the fraud is peculiarly within the defendant's knowledge or control.”
Hill, 2003 WL 22019936, at *3 (quotations and alterations omitted).

any one claim altogether. VW is not so much asking the Court to dismiss some
of the Plaintiffs’ claims, but instead is inviting the Court to opine on the
suitability of evidence it anticipates the Plaintiffs might try to present in order
to prove their claims. While VW may be correct that a plaintiff cannot establish
reliance on an affirmative misrepresentation in making a purchase when he or
she was unaware of the misrepresentation, divorced from specified claims, the
exercise does not seem appropriate in the context of a motion to dismiss. The
Court declines to dismiss any claims on this basis.
B. VW’s knowledge of the defect
VW next argues that all of the Plaintiffs’ common-law fraudulentconcealment and twelve of the state statutory consumer-fraud claims should
be dismissed because the Plaintiffs have failed to adequately plead that VW
knew of the defect at the time each Plaintiff acquired his or her car. The parties
appear to agree that in order to establish that VW was aware of the defect, the
Plaintiffs must allege sufficient facts establishing its knowledge prior to each
Plaintiff’s acquiring his or her car. (Jt. Mot. at 13–14; Pls.’ Resp. at 14). There
also appears to be no dispute that “allegations of knowledge and intent are not
subject to the particularity requirement” under Rule 9(b). Cordell Consultant,
Inc. Money Purchase Plan & Tr. v. Abbott, 561 F. App’x 882, 884 (11th Cir.
2014). Instead, VW complains the Plaintiffs’ allegations, even if accepted as
true and drawing all reasonable inferences in their favor, fall short of
establishing VW’s knowledge of the defect prior to each Plaintiff’s acquisition.
To begin with, VW’s contention that the Plaintiffs’ allegations “upon
information and belief” are impermissibly speculative in the context of fraud
allegations is not categorically true. That is, “[w]hile ‘pleadings generally cannot
be based on information and belief,’ the 11th Circuit has stated that ‘Rule
9(b)’s heightened pleading standard may be applied less stringently when
specific factual information about the fraud is peculiarly within the
defendant’s knowledge or control.’” U.S. ex rel. Sanchez v. Abuabara, No. 1061673-CIV, 2012 WL 254764, at *10 (S.D. Fla. Jan. 27, 2012) (Huck, J.)
(quoting US ex rel. Hill v. Morehouse Med. Assocs., Inc., 2003 WL 22019936 *3
(11th Cir. Aug.15, 2003) (alterations omitted). VW does not dispute that
whether or not it was aware of the defect is peculiarly within its own knowledge
or control. VW’s complaint in this regard, then, is unavailing.
In any event, the Plaintiffs rely, in part, on a number of customer tire
complaints submitted to NHTSA and posted to online message boards to
establish VW’s knowledge. One of VW’s quarrels with these complaints is their
timing. In this regard, VW points to the earliest submission to NHTSA,
presented in the complaint, that is dated August 15, 2013. VW protests that

this postdates the purchase of seven of the Plaintiffs’ cars. But the NHTSA
posts are not the only complaints Plaintiffs rely on. Instead, the Plaintiffs also
list complaints on other online forums, beginning on July 4, 2011, with a
message pointedly contending that the driver’s CC tires are improperly and
prematurely wearing as the result of a defect with the car’s design. (Am. Compl.
at ¶ 223.a.) Further, throughout its complaint, the Plaintiffs repeatedly
maintain that VW was aware of the defect since at least 2010. (Id. at ¶¶ 33,
200–02, 208, 211, 224, 253, 300, 337, 347.) This predates the acquisition of
each Plaintiff’s car. Thus, VW’s arguments that the Plaintiffs have not alleged
VW’s knowledge prior to all of the Plaintiffs obtaining their cars, without more,
fails.
VW also complains that the Plaintiffs’ knowledge allegations are overly
vague, generic, and conclusory. After carefully reviewing the complaint, the
Court disagrees. The Plaintiffs have pleaded that, “beginning in at least 2010,
CC drivers began taking their cars to authorized Volkswagen dealerships to
complain about improper and accelerated tire wear” and that since then
“thousands of CC drivers” have done the same. (Id. at ¶¶ 200–01.) They
maintain that, “beginning at least as early as 2010, [VW] regional service
representatives learned from [VW] dealerships that an inordinate number of CC
drivers were suffering from improper and accelerated tire wear” and that
dealerships were recording “orders related to CC that had suffered improper
and accelerated tire wear.” (Id. at ¶ 208, 211.) The Plaintiffs also detail that, “as
early as 2010, [VW] knew of the [d]efect through comments and postings . . . on
NHTSA webpages [and] on webpages belonging to, or actively monitored by,
[VW].” (Id. at ¶ 337.) In describing the complaints from these sources, the
Plaintiffs reproduced “just a sampling of the common, nationwide complaints
about the [d]efect that appear on NHTS’s database” and thirty-seven
complaints from various online message boards. (Id. at ¶ 220–23.) These
complaints all refer to abnormal tire wear and many describe the problem as
being the result of a defect in the car. (Id. at ¶¶ 220.d., g., h., i., k., 223.a., c.,
d., f., k., n., o., q., u., y., z., aa., bb., dd., ee., ff., hh.) The Court finds that
taken together, these allegations, if true, and drawing all reasonable inferences
in the Plaintiffs’ favor, would be enough to establish VW’s notice of the defect
prior to any one Plaintiff’s acquisition of his or her car.
VW cites a number of cases to support its argument that the Plaintiffs’
allegations are inadequate. The Court finds all of these cases either
distinguishable or unsupportive of VW’s position. For example, VW cites a
California district court case to support its contention that the Plaintiffs’
allegations are insufficient to show that VW had notice of a widespread defect
in the CC. In that case, however, the plaintiffs’ allegations fell far short of the

Plaintiffs’ allegations here. For example, in Resnick v. Hyundai Motor Am., Inc.,
the plaintiffs alleged only “general . . . ‘concerns’ regarding the possibility of [a
defect].” No. CV1600593BROPJWX, 2017 WL 1531192, at *14 (C.D. Cal. Apr.
13, 2017). The plaintiffs there did “not allege who had these concerns, the
substance of the concerns, or whether the concerns were ever communicated
to [the defendant].” Id. Moreover, in Resnick, the Plaintiffs only referenced
“several” anonymous online complaints and failed to allege that the defendant
monitored the websites on which they appeared or was even aware of the
online complaints. In stark contrast to the sparse factual allegations presented
by the Resnick plaintiffs, the Plaintiffs here have presented far more, as
detailed above. Additionally, the Plaintiffs here have unequivocally alleged that
VW actively monitored the NHTSA database and online forums. (E.g., Am.
Compl. at ¶¶ 219, 222.)
Nor does the Court find VW’s citation to Berenblat v. Apple, Inc.
supportive of its argument. No. 08-4969 JF (PVT), 2010 WL 1460297, at *8
(N.D. Cal. Apr. 9, 2010). VW’s parenthetical suggests that the court in
Berenblat concluded that “allegations of 350 complaints on defendant’s
website” were insufficient to plead the defendant’s knowledge of a defect and
that such complaints “merely establish[ed] that some consumers were
complaining.” Id. at *9. The key difference between this case and Berenblat,
however, is that the plaintiffs there merely presented “postings from affected
consumers memorializ[ing] conversations between consumers and [the
defendant’s] personnel.” One, or some, of the postings “accuse[d the defendant]
of removing “a thread of 350+ complaints about the [defective product] from its
website.” Id. at *8. But the existence of the “350+” complaints was itself only an
allegation. Nor are any other details about the postings provided. These
allegations are a far cry from the numerous, detailed complaints, of which the
Plaintiffs allege VW was fully aware, set forth by the Plaintiffs in this case.
VW additionally relies on a Ninth Circuit opinion for the proposition that
the Plaintiffs must be able to show that VW itself considered the volume of
consumer complaints to be “significant and beyond the norm.” (Jt. Mot. at 14
n. 16 (quoting Williams v. Yamaha Motor Co., 851 F.3d 1015, 1027, 1027 n. 8
(9th Cir. 2017)).) But the Ninth Circuit there only noted that the alleged facts in
case before it were particularly compelling. Id. at 1027 n. 8. This was because,
in addition to allegations that the defendant was aware of unusually high levels
of reported defects, the defendant manifested this awareness by establishing a
dedicated customer center to handle the complaints. Id. This case did not,
however, introduce an additional requirement that obliges a plaintiff to show
that a defendant recognized the significance of a high volume of complaints
alerting it to a product defect.

Because the Court finds that the Plaintiffs have adequately alleged VW’s
prior knowledge of the defect, it denies VW’s motion to dismiss premised on
this ground.
C. Louisiana Unfair Trade Practices and Consumer Protection Act
(“LUTPA”) Claim
VW argues that Plaintiff Gray’s count twelve, alleging violation of LUTPA,
must be dismissed because a claim under LUTPA is subject to an absolute
limitation period of one year from the time of the allegedly deceptive
transaction. The parties cite conflicting case law from intermediate appellate
state courts in Louisiana. The Plaintiffs’ case provides that “[w]hen the tortious
conduct and resulting damages continue, prescription does not begin until the
conduct causing the damages is abated.” Benton, Benton and Benton v.
Louisiana Pub. Facilities Auth., 672 So. 2d 720, 723 (La. App. 1st Cir.
1996), writ denied, 679 So. 2d 110 (La. 1996) (quotation omitted). VW’s case,
on the other hand, held that the one-year limitation period could not be
suspended or interrupted by a continuing tort. Glod v. Baker, 899 So. 2d 642,
646 (La. App. 3d Cir. 2005), writ denied, 920 So. 2d 238 (La. 2006). Even if the
Court assumes the Plaintiffs’ case has the better argument, the Plaintiffs’
complaint with respect to Plaintiff Gray would nonetheless fail.
The specific allegations relating to Gray assert that she purchased her
CC in March 2012; that she brought her car to a dealership in October 2014
where she was told her tires were unevenly worn and cupped and needed to be
replaced; that she thereafter replaced all four tires; that sometime in or after
September 2015, the same dealership had her replace two of her tires; and that
on September 8, 2016, she brought her car to a tire store that told her all four
tires were again unevenly worn and cupped and needed to be replaced. Gray
was added to the Plaintiffs’ amended complaint on November 20, 2017. None of
the events she recounts occurred within one year of her complaint. The
Plaintiffs’ arguments that, apparently to this day, “[VW] has refused to
acknowledge or fix the [d]efect” and that “[Gray] continues to suffer from the
[d]efect” do not salvage her claim. (Pls.’ Resp. at 18.) Such allegations are
attendant to most unfair trade practice claims and don’t amount to, in and of
themselves, a continuation of the wrong.
Because the Court finds Gray’s count-twelve claim, brought under
LUTPA, time barred (under either framework), it declines to evaluate VW’s
alternate argument regarding whether this claim would in any event be
preempted by the Louisiana Products Liability Act (“LPLA”).

D. Economic Loss Rule
VW insists that Plaintiffs Garella, L. Wilson, and Blue’s common-law
fraud claims under count two should be dismissed because they are barred by,
respectively, Pennsylvania, Florida, and Missouri’s economic-loss rules. The
parties present dueling court decisions opining on whether the economic-law
rule bars the Plaintiffs’ claims for common-law fraud within these three states.
In each instance, the Court finds the better argument, in each state, is that the
economic-loss rule does not bar the common-law fraud claims presented in
this case.
First, with respect to the rule in Florida, as described recently by the
Eleventh Circuit, the “economic loss rule is a judicially created doctrine that
sets forth the circumstances under which a tort action is prohibited if the only
damages suffered are economic losses.” Glob. Quest, LLC v. Horizon Yachts,
Inc., 849 F.3d 1022, 1030 (11th Cir. 2017) (quoting Tiara Condominium Assoc.,
Inc. v. Marsh & McLennan Companies, 110 So.3d 399, 401 (Fla. 2013)). As the
Eleventh Circuit explained, “[t]he rule was designed to prevent the application
of tort remedies to traditional contract law damages.” Glob. Quest, LLC, 849
F.3d at 1030. In Florida, however, as set forth by the Florida Supreme Court,
“the economic loss rule applies only in the products liability context.” Tiara
Condominium, 110 So. 3. 399, 407. Thus, the economic-loss rule cannot, in
any event, be applied to bar any of the Plaintiffs’ fraud claims that relate to
express-warranty claims, or contracts, between the parties. Instead, as made
clear in Tiara Condominium, whether a plaintiff’s claim sounding in tort is
foreclosed by the parties’ agreement must be resolved by the application of
“fundamental contractual principles.”6 Id. at 405 (quotation omitted). In any
event, whether evaluated through the lens of “either privity of contract or
products liability,” a claim for “fraudulent inducement” is excepted regardless
and should not be barred as a matter of course. Id. at 406.7

6

VW does not ever argue that contract principles foreclose the Plaintiffs’ fraud claims.

To the extent the cases relied upon by VW maintain that fraudulent inducement or
concealment claims are foreclosed “where the action for fraud depends upon precisely
the same allegations as a warranty claim—i.e., a claim the product failed to work as
promised,” the Court, of course, agrees. See, e.g., Takata Airbag, 193 F. Supp. 3d at
1338–39 (Moreno, J.). But that is not the case here. Instead, the Plaintiffs’ fraud-claim
allegations implicate VW’s concealing, suppressing, and/or misrepresenting material
facts regarding its cars’ defects and steps VW took to ensure that the defects were not
revealed. (Am. Compl. at ¶¶ 301–02.) These claims are distinct, as such claims
ordinarily would be, from Plaintiffs’ complaints that the product simply failed to work
as VW promised. See Glob. Quest, 849 F.3d at 1031 (describing the requirement that
“a fraudulent inducement claim . . . be independent of a breach of contract claim” as

7

As recognized by the Third Circuit Court of Appeal, the Supreme Court of
Pennsylvania has not addressed whether the economic-loss doctrine applies to
fraud claims under Pennsylvania law. Werwinski v. Ford Motor Co., 286 F.3d
661, 670 (3d Cir. 2002). After a lengthy analysis of the broad split in authority
on the topic, the Third Circuit predicted that the Pennsylvania Supreme Court
would bar a fraud claim in the product-liability context under the economicloss doctrine. Since then, however, there have been indications from
Pennsylvania’s intermediate appellate courts that this prediction may not be
borne out. Having reviewed these cases the court agrees “there are good
reasons to predict that, if confronted with the question, the Pennsylvania
Supreme Court would hold that the economic loss doctrine does not apply to
intentional torts.” In re Gen. Motors LLC Ignition Switch Litig., 257 F. Supp. 3d
372, 435–36 (S.D.N.Y. 2017), modified on reconsideration (on other
grounds), 14-MC-2543 (JMF), 2017 WL 3443623 (S.D.N.Y. Aug. 9, 2017). The
Court also agrees that “there are strong public policy reasons to ‘leave the
possibility of an intentional tort suit hanging over the head of a party
considering outright fraud.’” Id. (quoting Air Prods. Chems., Inc. v. Eaton Metal
Prods. Co., 256 F.Supp.2d 329, 336 (E.D. Pa. 2003) (alterations omitted)).
Because “the economic loss doctrine is premised on the notion that parties to a
contract may protect themselves from negligence or defective products by
negotiating the liability terms of the contract, . . . it is impracticable, if not
impossible, for parties to negotiate terms regarding what happens if one of
them is intentionally deceiving the other.” Gen. Motors, 257 F. Supp. 3d at 435–
36 (quoting Air Prods., 256 F. Supp. 2d at 336).
For similar reasons, the Court also finds that the Plaintiffs’ claims are
not barred under Missouri’s economic-loss rule either. VW relies on Flynn v.
CTB, Inc. to support its argument to the contrary. 1:12CV68 SNLJ, 2015 WL
5692299, at *11 (E.D. Mo. Sept. 28, 2015). But the Court finds this case
unavailing. In Flynn, the court found that the “fraudulent inducement
exception [to the economic-loss rule] is subject to a widely recognized limitation
that where the fraudulent misrepresentation concerns the quality, character, or
safety of the goods sold, the economic loss doctrine bars the fraud claim
because it is substantially redundant with warranty claims.” Id. at *12. The
Court finds such a limitation inapplicable here: the Plaintiffs’ fraud-claim
allegations implicate VW’s concealing, suppressing, and/or misrepresenting
material facts regarding its cars’ defects and steps VW took to ensure that the
defect was not revealed. (Am. Compl. at ¶¶ 301–02.) These claims are certainly
“minimal”); see also Oceanic Villas, Inc. v. Godson, 4 So. 2d 689, 690 (Fla. 1941) (“It is
well settled that a party can[]not contract against liability for his own fraud.”)

not coextensive with the Plaintiffs’ warranty claims; instead of concerning the
“quality, character, or safety of the goods sold,” these claims concern VW’s
alleged intentional misrepresentations or concealments of known defects of the
goods sold.
For all of these reasons, the Court denies VW’s motion to dismiss
Plaintiffs Garella, L. Wilson, and Blue’s common-law fraud claims, under count
two, with respect to Pennsylvania, Florida, and Missouri law.
E. California Consumer Protection Claims and California Common-Law
Fraud Claims
VW contends that Plaintiff Maytum’s California consumer protection
claims (counts six and seven) and California common-law fraud claims (count
two) must be dismissed for two reasons: the California consumer protection
claims (under California’s Unfair Competition Law (“UCL”) and California’s Fair
Advertising Law (“FAL”)) provide only for equitable relief and Maytun has an
adequate remedy at law; and Maytun is required to but fails to plead actual
reliance with Rule 9(b) specificity. Because the Court agrees with VW’s second
argument it declines to address is equitable-remedy contention.
The parties do not appear to dispute that claims under the UCL and the
FAL, as well as California common-law fraud claims, must allege actual
reliance on misrepresentations or omissions with Rule 9(b) specificity. (Jt. Mot.
at 17; Pls.’ Resp. at 18–19; see also Ehrlich v. BMW of N.A., LLC, 801 F. Supp.
2d 908, 919 (C.D. Cal. 2010) (dismissing claim under the UCL because the
plaintiff failed to plead “actual reliance”); Kearns v. Ford Motor Co., 567 F.3d
1120, 1122 (9th Cir. 2009) (California claims based on fraud, such as claims
under the UCL, must be pleaded with Rule 9(b) particularity); Rosado v. eBay
Inc., 53 F. Supp. 3d 1256, 1266 (N.D. Cal. 2014) (“A claim under the FAL must
show . . . actual and reasonable reliance on the purported misleading
statements.”).) The Plaintiffs maintain they have satisfied this standard; VW
claims they have not.
According to the Plaintiffs, in the complaint, Maytum, “identifies
precisely the dealerships that repeatedly failed to tell him about the [d]efect,
and he specifically alleges that he would not have bought his CC—or at the
very least he would have paid less for it—if he had known about the [d]efect.”
(Pls.’ Resp. at 18–19 (citing Am. Compl. at ¶¶ 36, 374, 382).) But Maytum
didn’t visit any of the dealerships he “precisely identifies” as concealing the
defect until after he purchased his car. (Am. Compl. at ¶¶ 128, 131–32 (alleging
that Maytum bought his car in 2015 and that two dealerships in California, in
March and December 2016, failed to disclose the defect to him).) The remainder
of the Plaintiffs’ “reliance” allegations are overly generalized, conclusory, or not

personal to Maytum himself. (E.g. Am. Compl. at ¶¶ 374 (“each member of the
California Sub-Class . . . relied on the misrepresentation and/or omissions”
and “[h]ad the Plaintiffs and the members of the California Sub-Class known
the truth, they would not have purchased or leased their vehicles and/or paid
as much for them”), 383 (same).) The Court finds that Maytum has not
sufficiently pleaded reliance and therefore grants VW’s motion to dismiss with
respect to Maytum’s California statutory claims (counts six and seven) and
with respect to Maytum’s common-law fraud claim under count two.
F. Georgia Common-Law-Fraud Claim
VW next argues that Plaintiff Glasband’s common-law-fraud claim under
Georgia law should be dismissed because he bought his car after the expiration
of the car’s warranty period. According to VW, under Georgia law, no duty to
disclose is owed to a used-car purchaser who had no relationship with the
defendant. In support of its argument, VW cites McCabe v. Daimler AG., 160 F.
Supp. 3d 1337, 1351 (N.D. Ga. 2015). But Glasband alleges that, prior to
buying his car, he brought it to a VW dealership in Georgia where he was told
“there was nothing wrong with the car except that it needed an alignment and
two new front tires.” Id. In McCabe, the court found that the plaintiffs’ claim
failed because “there [was] no evidence that [the d]efendants had direct
knowledge of [the p]laintiffs’ purchase of the vehicles in question and had no
apparent relationship with [the p]laintiffs.” Id. Here, the Plaintiffs have
presented “direct evidence” of the Defendant’s “knowledge” of Glasband’s
purchase. Further, Glasband has certainly alleged “some relationship” between
himself and VW. Id. (noting there must be “at least some relationship between
the parties”). Based on the allegations in the complaint and the authorities
presented by VW, the Court finds no reason to dismiss Glasband’s commonlaw fraud claim under Georgia law.
G. Class Action Claims under Ohio and Utah’s Consumer Sales
Practices Acts
The consumer-protection statutes in some states prohibit plaintiffs from
pursuing class-action relief under those laws. Ohio and Utah are two of those
states. This is at odds with Rule 23, which “unambiguously
authorizes any plaintiff, in any federal civil proceeding, to maintain a class
action if the Rule’s prerequisites are met.” Shady Grove Orthopedic Associates,
P.A. v. Allstate Ins. Co., 559 U.S. 393, 406 (2010). In addressing the conflict,
the Shady Grove Court held, in a markedly fractured decision, “that a New
York law that broadly prohibited class actions in suits seeking penalties or
statutory minimum damages conflicted with Rule 23 and was preempted such

that it would not apply in a federal court sitting in diversity.” Fejzulai v. Sam's
W., Inc., 205 F. Supp. 3d 723, 726 (D.S.C. 2016) (citing Shady Grove, 559 U.S.
at 398–401). The Eleventh Circuit applied Shady Grove to find that class claims
under the Alabama Deceptive Trade Practices Act were permissible because
that statute’s prohibition on private-class actions, much like the New York
statute under review in Shady Grove, was superseded by Rule 23. Lisk v.
Lumber One Wood Preserving, LLC, 792 F.3d 1331, 1335 (11th Cir. 2015). In
making its decision, the Eleventh Circuit found it unnecessary to address
whether Justice Scalia’s plurality opinion or Justice Stevens’s concurrence
controlled. Id. at 1337. The need for that resolution was obviated, reasoned the
Eleventh Circuit, because its decision would remain the same regardless of
which framework was applied. Id. at 1336. According to the Eleventh Circuit,
the disputed issue boiled down to only one question: whether plaintiffs may
seek redress in one action or must instead each bring separate actions. Id.
1337. Based on its analysis, the Eleventh Circuit concluded, “on any view,”
“Rule 23 does not ‘abridge, enlarge or modify any substantive right.’”
The Ohio statute at issue in this case differs markedly from the Alabama
statute at issue in Lisk, however. Under the Ohio Consumer Sales Practices Act
(“OCSPA”),
Plaintiffs bringing claims on behalf of a class must demonstrate
that either (1) the alleged violation is an act or practice that was
declared to be deceptive or unconscionable by a rule adopted by
the Attorney General before the consumer transaction on which
the action is based or (2) the alleged violation is an act or practice
that was determined by a court to violate the OCSPA and the
court’s decision was available for inspection before the transaction
took place.
In re Porsche Cars N.A., Inc., 880 F. Supp. 2d 801, 868 (S.D. Ohio 2012).
Rather than foreclosing the opportunity to pursue a class action at all, the
Ohio statute, instead, defines substantive rights: what a consumer needs to
prove in order to succeed on a claim. Thus, to allow such a claim to proceed
without requiring the plaintiff to properly allege notice under the statute, would
“abridge, enlarge or modify [a] substantive right.” Because, “federal rules
cannot displace a State’s definition of its own rights and remedies,” Beal ex rel.
Putnam v. Walgreen Co., 408 Fed. App’x 898, 902 n. 2 (6th Cir. 2010) (quoting
Shady Grove, 559 U.S. at 418 (Stevens, J., concurring), the Court agrees with
VW that Ohio’s class action notice requirements are applicable here.
The Plaintiffs argue that even if the Ohio notice requirements are
applicable, they have nonetheless sufficiently alleged such notice by averring
that VW “(1) knew about the [d]efect but nevertheless failed to disclose it; (2)

lied about the [defect] and instructed its dealers to do the same; and (3)
violated its [warranty] by failing to fix the [d]efect.” (Pls.’ Resp. at 20.) But the
Plaintiffs are required to allege that the violation itself was either (1) declared
by the Ohio Attorney General to be deceptive or unconscionable or (2)
determined by an Ohio state court to violate the OCSPA. They have done
neither. Instead, in their response to VW’s motion, the Plaintiffs merely cite, in
a footnote, an Ohio state court decision which the Plaintiffs describe as
determining “that it was a deceptive practice to tell [a] buyer that a vehicle is
free of defects when it was not.” (Pls.’ Resp. at 20 n. 39 (citing Keel v. Toledo
Harley-Davidson/Buell, 920 N.E.2d 1041, 1044–46 (Ohio Ct. App. 2009)).) But
under Ohio law “a consumer may bring a class action under the OCSPA only if
the defendant’s alleged violation of the Act is substantially similar to an act or
practice previously declared to be deceptive.” Kline v. Mortgage Electronic Sec.
Systems, 2010 WL 6298271, at *6 (S.D. Ohio, 2010) (quotations omitted).
Further, “‘[s]ubstantial similarity’ means a similarity not in every detail, but in
essential circumstances or conditions.” Id. (quotations omitted). The Plaintiffs
have certainly not alleged as much in their complaint nor have they met this
burden in opposition to VW’s motion to dismiss. Volbers-Klarich v. Middletown
Mgt., Inc., 929 N.E.2d 434, 441 (Ohio 2010) (“A general rule is not sufficient to
put a reasonable person on notice of the prohibition against a specific act or
practice.”) The Court thus grants VW’s motion to dismiss the Plaintiffs’ class
claims under OCSPA (count twenty-one).
VW, in reply, acknowledges that Lisk “seems to foreclose the application
of the Utah class action requirement” but instead appears to invite the Court to
part ways with the Eleventh Circuit’s opinion as “most courts outside of [the]
circuit implicitly or explicitly disagree[] with its interpretation of Shady Grove.”
(Defs.’ Reply at 10, n. 15 (quoting Delgado v. Ocwen Loan Servicing, LLC,
13CV4427NGGST, 2017 WL 5201079, at *10 (E.D.N.Y. Nov. 9, 2017)).) The
Court declines the invitation and denies VW’s motion with respect to the Utah
class claims.
H. Statute of Limitations of the Florida and Ohio Consumer Protection
Claims
Lastly, VW urges the Court to dismiss Plaintiffs L. Wilson and
Panopoulos’s claims under, respectively, Florida and Ohio’s consumer
protection statutes. In opposition, the Plaintiffs counter that Florida’s four-year
and Ohio’s two-year statutes of limitations should be tolled based on the
Plaintiffs’ allegations that VW fraudulently concealed the defect. For the same
reasons this argument failed to convince with respect to the Plaintiffs’ expressand implied-warranty claims, it fails to convince with respect to the Plaintiffs’

Florida and Ohio consumer-protection claims. The Court thus grants VW’s
motion to dismiss counts nine and twenty-one as time barred.
6. Magnuson-Moss Warranty Act Claims
“[A] Magnuson–Moss Warranty Act claim only exists if a valid breach
of warranty claim is also stated.” Melton v. Cent. Arms, Inc., 243 F. Supp. 3d
1290, 1304 (S.D. Fla. 2017) (Moreno, J.) (citing Bailey v. Monaco Coach Corp.,
168 Fed. App’x 893, 894 n.1 (11th Cir. 2006)). Because the Court has
dismissed all of Plaintiffs Blue, Brown, Glasband, Panopoulos, Spelrem, T.
Wilson, and Johnson’s warranty claims, their derivative MMWA claims must
also be dismissed under count one.
7. Conclusion
Based on the foregoing, the Court grants in part and denies in part
VW’s joint motion to dismiss (ECF No. 34). In sum, the Court grants VW’s
motion to dismiss the following:
(1) Blue, Brown, Glasband, Panopoulos, Spelrem, T. Wilson, and
Johnson’s warranty claims under the MMWA as set forth in count one
(count one remains viable as to the other Plaintiffs);
(2) Maytum’s common-law fraud claim under count two (count two remains
viable as to the other Plaintiffs);
(3) Blue, Brown, Glasband, Martino, Panopoulos, T. Wilson, Spelrem, and
Johnson’s implied-warranty claims under count three (count three
remains viable as to the other Plaintiffs);
(4) Blue, Brown, Spelrem, Glasband, Gray, Panopoulos, T. Wilson, and
Johnson’s express-warranty claims under count four (count four
remains viable as to the other Plaintiffs);
(5) Maytum’s two statutory claims under California law as set forth in
counts six and seven;
(6) L. Wilson’s Florida Deceptive and Unfair Trade Practices Act as set forth
in count nine;
(7) Gray’s Louisiana Unfair Trade Practices and Consumer Protection Law
claim under count twelve;
(8) Blue’s implied-warranty claim under Missouri statute in count fifteen;
(9) Martino’s implied-warranty claim under New Jersey statute in count
sixteen;
(10) Panopoulos’s Ohio Consumer Sales Practices Act claim in count
twenty-one;

(11) T. Wilson’s implied-warranty claim under Texas statute in count
twenty-five (count twenty-five remains viable as Plaintiff Cruz); and
(12) Johnson’s implied-warranty claim under Virginia statute in count
twenty-nine.
By the parties’ agreement, the Court also dismisses Glasband’s Georgia
Uniform Deceptive Trade Practices Act claim under count eleven and Brown’s
North Carolina Unfair and Deceptive Trade Practices Act claim under count
twenty.
The Plaintiffs’ have not requested leave to amend; nor have they
indicated in their response to VW’s motion to dismiss any inclination
whatsoever to do so. The Court thus dismisses the aforementioned claims with
prejudice. Wagner v. Daewoo Heavy Industries Am. Corp., 314 F.3d 541, 542
(11th Cir. 2002) (“A district court is not required to grant a plaintiff leave to
amend his complaint sua sponte when the plaintiff, who is represented by
counsel, never filed a motion to amend nor requested leave to amend before the
district court.”); Avena v. Imperial Salon & Spa, Inc., 17-14179, 2018 WL
3239707, at *3 (11th Cir. July 3, 2018) (“[W]e’ve rejected the idea that a party
can await a ruling on a motion to dismiss before filing a motion for leave to
amend.”)
Done and ordered at Miami, Florida, on September 26, 2018.
________________________________
Robert N. Scola, Jr.
United States District Judge