Persad et al v. Ford Motor Company
Filing
31
OPINION AND ORDER DENYING #15 Defendant's MOTION to Dismiss. (Response due by 7/30/2018, TELEPHONIC Scheduling Conference, initiated by Plaintiff, set for 8/20/2018 10:00 AM before District Judge Terrence G. Berg) Signed by District Judge Terrence G. Berg. (AChu)
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
SURESH PERSAD, DANIEL
WRIGHT, and ROBERT
DRUMMOND, individually
and on behalf of all others
similarly situated,
Plaintiffs,
Case No. 17-12599
Hon. Terrence G. Berg
v.
FORD MOTOR COMPANY,
Defendant.
OPINION AND ORDER DENYING
DEFENDANT’S MOTION TO DISMISS (Dkt. 15)
I.
Introduction
This is a putative class action, concerning 2016 and 2017 model
year Ford Explorers. The crux of Plaintiffs’ Complaint is that these
vehicles have an “exhaust fume defect.” In other words, that when
they are driven these cars allow dangerous gases – including carbon
monoxide – to enter the passenger compartment, sickening the
driver and passengers. Defendant Ford Motor Company filed a motion to dismiss (Dkt. 15).1 Plaintiffs filed a response (Dkt. 17), and
Defendant also filed a motion to strike (Dkt. 27) Plaintiffs’ second notice of
supplemental authority (Dkt. 25). Plaintiffs’ second notice of supplemental authority apprises the Court that Defendant has sent “customer satisfaction program” letters to owners of the class vehicles, offering to inspect the cars and to
1
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Defendant filed a reply (Dkt. 18). Defendant’s motion raises a number of arguments as to why Plaintiffs’ various claims fail to state a
claim upon which relief can be granted. The parties agree that the
claims of Plaintiff Persad are governed by Georgia law while those
of Plaintiffs Wright and Drummond are governed by Pennsylvania
law.
For the reasons set forth below, Defendant’s motion is DENIED.
II.
Background
Plaintiffs seek to certify a nationwide class (or state subclasses)
of persons who purchased, leased, or own model year 2016 and 2017
Ford Explorers (Dkt. 14, Amended Compl. at ¶¶ 2, 74). One of the
individual Plaintiffs, Suresh Persad, is a Georgia resident who allegedly purchased a new 2016 Explorer from a Georgia-based dealership (Id. at ¶ 16). The other two Plaintiffs, Daniel Wright and
Robert Drummond, are Pennsylvania citizens and residents (Id. at
¶¶ 18, 20). Plaintiff Wright claims to have purchased a used 2016
Explorer, while Plaintiff Drummond claims to have purchased a
new 2017 Explorer, both from Pennsylvania-based dealerships
(Id.).
reprogram the “climate control module” to allay any customer concerns about
exhaust fumes entering the passenger compartment. Defendant contends that
Plaintiffs’ “notice” is not new legal authority, but rather is attempting to impermissibly interject new facts into the pleadings. The Court has not relied on
Plaintiff’s second notice in deciding Defendant’s motion to dismiss, but sees no
need to strike the notice from the docket. Thus, Defendant’s motion to strike
(Dkt. 27) is DENIED AS MOOT.
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Plaintiffs’ allege that an “exhaust fume defect” exists in the
putative class vehicles, which allows noxious gases, including carbon monoxide, to enter the vehicles’ passenger compartments (Id.
at ¶¶ 6, 16-21). Plaintiff Persad claims that after he detected exhaust fumes in his passenger compartment, he took the vehicle to
a Ford dealership (Id. at ¶ 17). The dealer conducted a road test,
identified no exhaust fumes, and allegedly “declined to repair the
vehicle” (Id.). Plaintiffs Wright and Drummond also purportedly
detected exhaust fumes in their passenger compartments, however
neither alleges that they presented their vehicles to a Ford dealership for examination or repair (Id. ¶¶ 18-21).
Plaintiffs contend that the alleged defect, which they assert
also existed in earlier model years of Explorers2, constitutes a “clear
safety hazard” (Id. at ¶¶ 5-6, 27). They claim Ford knowingly, actively, affirmatively, and fraudulently concealed the defect from
consumers (Id. ¶ 8). Plaintiffs specific legal claims are: fraudulent
concealment (Count I), negligent misrepresentation (Count II),
breach of express warranty (Count III), breach of implied warranty
(Count IV), violations of the Magnuson-Moss Warranty Act (Count
Earlier model year Ford Explorers with alleged “exhaust fume defects” are
the subject of class action litigation in other courts. See, e.g. Sanchez-Knutson
v. Ford Motor Co., 52 F. Supp. 3d 1223 (S.D. Fla. 2014); Salinas v. Ford Motor
Co., No. 7:15-CV-11, 2016 WL 8461424 (S.D. Tex. May 13, 2016).
2
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V), unjust enrichment (Count VI), violations of the Georgia Fair
Business Practices Act (Count VII), and violations of the Pennsylvania Unfair Trade Practices and Consumer Protections Act (Count
VIII).
III. Standard of Review
A party may move to dismiss under Federal Rule of Civil Procedure 12(b)(6) for “failure to state a claim upon which relief can be
granted.” Rule 12(b)(6) is read in conjunction with the pleading
standard set forth in Rule 8(a), which requires “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Rule 8(a)(2); see Ashcroft v. Iqbal, 556 U.S. 662, 677–68 (2009).
This standard does not require detailed factual allegations. Iqbal,
556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007)). However, a party's “obligation to provide the ‘grounds'
of his ‘entitle[ment]’ to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 555 (internal citations omitted).
To survive a Rule 12(b)(6) motion, the complaint and any other matters properly considered 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 (quoting Twombly, 550 U.S. at 570). A claim
has facial plausibility when the pleaded factual content allows the
court, drawing upon its “judicial experience and common sense,” to
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reasonably infer that the defendant is liable for the misconduct alleged. Id. at 678 (citing Twombly, 550 U.S. at 556), 679. “But where
the well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has alleged—but
it has not ‘show[n]’—‘that the pleader is entitled to relief.’” Id. at
679 (quoting Rule 8(a)(2)).
IV.
Analysis
As noted above, Plaintiffs raise a variety of claims, under
Georgia and Pennsylvania law. Defendant argues that each type
claim is legally deficient. Each claim is considered below.
a. Fraudulent Concealment
First, Plaintiffs bring claims of common-law fraudulent concealment under the laws of Pennsylvania and Georgia. Defendant
contends that these claims should be dismissed because: (1) Plaintiffs have not pled the circumstances of the fraud with particularity
pursuant to Federal Rule of Civil Procedure 9(b); and (2) Plaintiffs
have not plausibly alleged that Defendant had a duty to disclose the
alleged defect. The crux of Defendant’s second argument is that
Plaintiffs have not adequately alleged that Defendant had
knowledge of the alleged defect that was superior to that of the
Plaintiffs. Defendant says it was essentially common knowledge
that Ford Explorers suffered from “exhaust fume defects,” because
prior model years were the subject of widely publicized class action
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litigation and National Highway Transportation and Safety Board
(NHTSB) investigations.
Defendant’s arguments are not well-
taken.
As to Defendant’s first argument, that Plaintiffs’ claims are
not plead with sufficient particularity, it is true that under Rule
9(b), a complaint alleging fraud “must state with particularity the
circumstances constituting fraud.” However, Rule 9(b) also provides that “[m]alice, intent, knowledge, and other conditions of a
person’s mind may be alleged generally.” Thus, it “does not require
a plaintiff to allege specific facts related to the defendant’s state of
mind when the allegedly fraudulent statements [or omissions] were
made.” Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1237 (11th Cir.
2008).
Instead, it is sufficient to plead “the who, what, when,
where, and how” of the allegedly fraudulent statements or omissions and then allege generally that those statements or omissions
were made with the requisite intent. Id. To the extent Defendant
contend that Plaintiffs have failed to plead Defendant’s knowledge
of the defect with particularity, the argument is not well-taken.
Plaintiffs have generally alleged such knowledge, and that is all
that is required by Rule 9(b). The Court also finds that Plaintiffs
have pled the circumstances of the alleged fraud with sufficient particularity.
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As to Defendant’s alleged superior knowledge, both Pennsylvania and Georgia recognize a duty to disclose where a defendant
has exclusive and superior knowledge. See In re MyFord Touch
Consumer Litig., 46 F. Supp. 3d 936, 960 (N.D. Cal. 2014) (finding
manufacturer had duty to disclose based on exclusive knowledge of
a defect under, inter alia, Pennsylvania common law and consumer
protection statutes); McCabe v. Daimler AG, 948 F. Supp. 2d 1347,
1368 (N.D. Ga. 2013) (“McCabe I”) (sustaining fraud by omission
claim under Georgia law upon consideration of a motion to dismiss
and imposing a duty to disclose where the defect “could not have
been discovered through the exercise of ordinary prudence and caution [by plaintiffs]”).
Exclusive knowledge can be established
where, for example, the defendant knew of a defect while the plaintiffs did not and, “given the nature of the defect, it was difficult to
discover.” In re MyFord Touch Consumer Litig., 46 F. Supp. 3d 936,
960 (N.D. Cal. 2014).
Plaintiffs allege that Ford had exclusive and superior
knowledge of the defect by virtue of “pre-production testing, preproduction design failure mode analysis, production design failure
mode analysis, early consumer complaints made to Defendant’s network of exclusive dealers, aggregate warranty data compiled from
those dealers, repair order and parts data received from the dealers,
consumer complaints to dealers and NHTSA, and testing performed
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in response to consumer complaints” (FAC ¶38). Moreover, Plaintiffs allege the presence of multiple Technical Service Bulletins3
(“TSBs”) issued as early as 2012 that concern earlier model year
Ford Explorers and apparently address the same defect as suffered
by the Class Vehicles. Lastly, Plaintiffs allege numerous consumer
complaints concerning the Exhaust Fume Defect (FAC ¶5, 44, 47).
Ford relies heavily on McCabe v. Daimler AG, 160 F. Supp. 3d
1337 (N.D. Ga. 2015) (“McCabe II”), but McCabe II does not support
dismissal at the pleading stage. McCabe II involved motions for
summary judgment, and observed that that “the existence of a duty
to disclose must be measured by the specific facts of the case” revealed during discovery. McCabe II, 160 F. Supp. 3d at 1350. Indeed, the district court that decided McCabe II previously denied a
motion to dismiss a fraud by omission claim under Georgia law in
that case, even as it recognized the duty to disclose. McCabe I, 948
F. Supp. 2d. at 1368-70.
Furthermore, the “publicly available information” underpinning Defendant’s argument concerned prior model year Ford Explorers. Plaintiffs’ have plausibly alleged that consumers would
have no way of knowing the same defect was present in the newer
2016-2017 models. Indeed, a plausible inference could be drawn in
Generally speaking, TSBs are communications from a car manufacturer to
dealers and mechanics that explain repair procedures to address known problems.
3
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the opposite direction—that because older Ford Explorers suffered
from well-publicized exhaust fume defects, a reasonably prudent
consumer might expect that Ford had rectified this issue in the
newer models. In any event, Plaintiffs have stated a viable claim
for fraudulent concealment.
b. Negligent Misrepresentation
Ford attacks Plaintiffs’ negligent misrepresentation claims
using the same argument that it made against Plaintiffs’ fraudulent concealment claim. These arguments fail for the same reasons.
Plaintiffs adequately plead all of the elements of negligent misrepresentation.
c. Breach of Express Warranty
Ford contends that Plaintiffs failed to state a claim for breach
of express warranty because they do not allege that they experienced a problem within the warranty period. This is not correct.
Plaintiffs quite clearly allege that “Plaintiffs and members of the
Classes experienced the Exhaust Fume Defect within the warranty
periods[,]” which are defined as 3 years or 36,000 miles (FAC ¶¶ 11,
35).
Ford also urges the Court to dismiss Plaintiffs’ breach of express warranty claim since Plaintiffs did not give Ford a mandatory
pre-suit written notice. Under Pennsylvania law, it does appear
that notice to a manufacturer is required. See, e.g., Schmidt v. Ford
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Motor Co., 972 F. Supp. 2d 712, 719 (E.D. Pa. 2013) (stating that,
under Pennsylvania law, “a plaintiff, specifically a buyer, must provide notification of the alleged product defect to the manufacturer
prior to bringing suit on a breach-of-warranty theory”); In re Ford
E–350 Van Prods. Liab. Litig., No. CV–03–4558 (GEB), 2010 WL
2813788, at *39–40 (D.N.J. July 9, 2010) (in case where plaintiffs
sued car manufacturer, denying summary judgment to manufacturer on alleged lack of notice because there was a factual dispute
as to the reasonableness of the time within which the plaintiffs gave
notice). However, under Pennsylvania law, the filing of a complaint
may constitute sufficient notice. See id.; Precision Towers, Inc. v.
Nat-Com, Inc., No. 2143 APRIL TERM 2002, 2002 WL 31247992,
at *5 (Pa. Com. Pl. Sept. 23, 2002) (stating that “[t]he filing of a
complaint has been held to satisfy the notice requirement for a
breach of warranty claim”).
Georgia law is similar – pre-suit notice is not required when
the action is brought against a remote manufacturer and/or seller.
See In re Volkswagen Timing Chain Prod. Liab. Litig., No. CV 162765 (JLL), 2017 WL 1902160, at *13 (D.N.J. May 8, 2017) (“Plaintiffs need not give a remote manufacturer and/or seller pre-suit notice” under Georgia or Pennsylvania law). Furthermore, this question is inappropriate to decide at the pleading state – whether
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Plaintiffs gave timely notice is a question of fact for the jury to decide. See, e.g., In re MyFord Touch Consumer Litig., 46 F. Supp. 3d
936, 977–78 (N.D. Cal. 2014).
Ford next argues that Plaintiffs allege only a design defect,
which is exempt from Ford’s express warranty. However, Plaintiffs
point out that while they do allege that the Class Vehicles are defectively designed, they also allege that the presence of exhaust
odor and gases, including carbon monoxide, in the passenger compartment could be caused by defects in materials, workmanship, or
manufacture (FAC ¶¶ 28-30). Discovery is needed to determine
whether the fumes are also entering the compartment due to defects in the manufacturing process or particular materials that
were used in the exhaust or HVAC systems. At this stage of the
litigation, Plaintiffs’ allegations are sufficient to sustain that the
Exhaust Fume Defect is covered by the applicable warranties. See,
e.g., In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales
Practices, & Prod. Liab. Litig., 754 F. Supp. 2d 1145, 1181 (C.D.
Cal. 2010) (crediting allegations of “[t]he failure to design, assemble
and manufacture” and sustaining express warranty claim).
Moreover, courts have rejected efforts to create an artificial
distinction between design and materials/workmanship defects. See
Daniel v. Ford Motor Co., 806 F.3d 1217, 1225 (9th Cir. 2015) (holding that Ford’s express warranty “must be construed to guarantee
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against both manufacturing and design defects”); Koulajian v. Trek
Bicycle Corp., 1992 WL 28884 at *2 (S.D.N.Y. Feb. 11, 1992) (rejecting the distinction between design and manufacturing defects and
reasoning that “the warranty’s reference to ‘workmanship’ could refer to [] design as well as implementation of those designs in the
manufacturing process”); Alin v. Am. Honda Motor Co., 2010 WL
1372308, at *6 (D.N.J. Mar. 31, 2010) (holding that “where the distinction between defect in design and defect in materials or workmanship is a matter of semantics, and sufficient facts are alleged to
assert both, the defendant's characterization of the nature of the
claim pre-discovery should not control whether the complaint survives.”); In re Volkswagen Timing Chain Prod. Liab. Litig., No. CV
16-2765 (JLL), 2017 WL 1902160, at *12 (D.N.J. May 8, 2017)
(same). Plaintiffs’ Complaint contains sufficient factual allegations
to assert a breach of the warranty, regardless of whether the defect
is in design or in manufacturing and workmanship. Plaintiffs have
stated a valid claim for breach of express warranty.
d. Breach of Implied Warranty
Defendant contends that Plaintiffs’ implied warranty claims
fail because they do not plead that the defect manifested during the
applicable warranty period, i.e., 3 years/36,000 miles. As already
noted in the discussion of the express warranty claims, this contention is belied by the language of the Complaint. It alleges that
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Plaintiffs “and members of the Classes experienced the Exhaust
Fume Defect within the warranty periods” (FAC ¶35; see also ¶¶1621 (alleging that each Plaintiff experienced exhaust fumes within
the passenger compartment soon after purchasing the vehicle)).
Defendant also argues that Plaintiffs’ breach of implied warranty claims must fail they do not plausibly allege that the exhaust
fume defect renders the vehicles “un-merchantable.” This argument is also not well-taken. The implied warranty of merchantability is designed “to protect buyers from loss where the goods purchased are below commercial standards.” Altronics of Bethlehem,
Inc. v. Repco, Inc., 957 F.2d 1102, 1105 (3d Cir. 1992). “In order to
be merchantable, goods must be ‘fit for the ordinary purposes for
which such goods are used.’ ” Id. (citation omitted). “[T]o establish
a breach of this warranty, a plaintiff must show, among other
things, that the product at issue was defective.” In re Volkswagen
Timing Chain Prod. Liab. Litig., No. CV 16-2765 (JLL), 2017 WL
1902160, at *15 (D.N.J. May 8, 2017) (internal quotations omitted).
“In the context of a car, this warranty is satisfied when the vehicle
provides safe and reliable transportation.” Greene v. BMW of North
Am., 2013 WL 5287314, *2 (D.N.J. Sept. 17, 2013). Here, despite
Defendant’s assertion that the Class Vehicles were merchantable,
Plaintiffs have successfully pled a prima facie claim for breach of
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the implied warranty of merchantability. The First Amended Complaint alleges that the Class Vehicles, by allowing exhaust odor and
gases, including carbon monoxide, into the passenger compartment,
are not in a safe condition and are not fit for their ordinary purpose.
Defendant attacks Plaintiffs’ labeling the exhaust fume defect as a
“safety hazard,” but at this stage of the case, Plaintiffs need only
plausibly allege that the defect at issue impacts the safe operation
of the car. Quite clearly, Plaintiffs have done so. Indeed, in class
litigation involving prior model year Explorers, a court sustained a
breach of implied warranty claim against Ford for a similar exhaust
fume defect. See Sanchez-Knutson, 52 F. Supp. 3d at 1234.
Finally, the Court notes that Defendant’s reliance on Judge
Goldsmith’s decision in Beck v. FCA US LLC, 273 F. Supp. 3d 735
(E.D. Mich. 2017) is misplaced. Beck dismissed the putative class
plaintiff’s breach of implied warranty claim by noting, among other
things, that the plaintiff’s continued use of the class vehicle was
fatal to this claim. Defendant notes that Plaintiffs in this case have
not alleged that they stopped driving their vehicles thus, under
Beck’s line of reasoning, Plaintiffs’ implied warranty claims should
be dismissed. However, Beck is distinguishable. First, Beck involved an entirely different type of defect – a “rotary shifter” which
allegedly inaccurately indicated that the vehicles are in the Park
gear when, in fact, they were not, which supposedly led to a number
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of rollaway incidents. Second, Beck applied California law, not
Georgia or Pennsylvania law, as is at issue in this case. In any
event, at this stage of the case, Plaintiffs have stated a valid claim
for breach of implied warranty.
e. Magnuson-Moss Warranty Act
Plaintiffs also bring claims under the Magnuson-Moss Warranty Act (MMWA). Defendant argues that the ability to sustain
an MMWA cause of action is dependent on the existence of an underlying viable state warranty claim. As noted above, Plaintiffs’
have stated viable claims for breach of express and implied warranty. As Plaintiffs’ claims for violation of MMWA are generally
derivative of Plaintiffs’ breach of express and implied warranty
claims, Plaintiffs’ MMWA claim should proceed in the event the
warranty claims survive. See Sanchez-Knutson v. Ford Motor Co.,
52 F. Supp. 3d 1223, 1234 (S.D. Fla. 2014).
Defendant also argues that Plaintiffs’ MMWA claims should
be dismissed, because Plaintiffs did not comply with the MMWA’s
informal dispute resolution process. However, Plaintiffs have alleged that any informal dispute settlement procedure would be futile. For instance, Plaintiffs allege that Defendant steadfastly denies the existence of the Exhaust Fume Defect (FAC ¶52 (Defendant “argued that the carbon monoxide levels … are within permissible levels, that ‘only a small number of customers are affected by
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the exhaust odors’ and that the fumes are not harmful”)). And,
Plaintiffs allege that Defendant’s attempts to address exhaust fume
issues have been ineffective (FAC ¶44 (consumer complaints concerning, among other things, the inability to remedy), ¶ 47 (NHTSA
report stating “[c]oncerns over the effectiveness of the procedures
[to address complaints] have been raised”), ¶¶ 57-59 (Defendant’s
Technical Service Bulletins did not provide a specific fix for exhaust
fume issues)). Plaintiffs’ allegations that any informal dispute resolution process would be futile are enough to sustain the MMWA
claims at this stage of the case. See In re Toyota Motor Corp., 754
F. Supp. at 1189 (“At the pleadings stage, the Court cannot say
whether attempts to comply with the informal dispute settlement
procedure put in place by Toyota are futile. Plaintiffs’ allegations
allow for such an inference”); see also Sanchez-Knutson v. Ford Motor Co., 52 F. Supp. 3d 1223, 1235 (S.D. Fla. 2014) (the MMWA’s
“informal dispute settlement procedure is an affirmative defense—
subject to waiver, tolling, and estoppel, that [a defendant] may
raise, not that [the p]laintiff must negate in her Complaint;” also
noting that compliance with MMWA’s informal dispute resolution
process is more appropriately addressed at the summary judgment
stage of litigation, and is premature at the pleading stage). Plaintiffs have stated a viable MMWA claim at this stage of the litigation.
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f. Unjust Enrichment
Defendant next argues that Plaintiffs may not assert a claim
for unjust enrichment where there is an express warranty. Plaintiffs, however, properly plead their claim for unjust enrichment in
the alternative. This is especially true since Defendant denies the
applicability of any warranty in its motion to dismiss, and presumably will continue to do so as this litigation progresses. Rule 8(a)(3)
specifically allows a party to plead in the alternative, and Plaintiffs
have properly done so here. See, e.g., Terry Barr Sales Agency, Inc.
v. All–Lock Co., Inc., 96 F.3d 174, 182 (6th Cir. 1996) (allowing
plaintiff to proceed under both breach of contract and unjust enrichment theories where defendant “kept its options open, and may
deny the existence of a contract”). Plaintiffs’ unjust enrichment
claim will not be dismissed at this stage of the proceedings.
g. Georgia Fair Business Practices Act
Defendant next challenges Plaintiff Persad’s claim under
Georgia’s Fair Business Practices Act (FBPA). The gist of Defendant’s argument is that Plaintiff Persad failed to send a required
written demand for relief at least 30 days prior to filing suit. Defendant relies on Ga. Code Ann. § 10-1-399(b).
Plaintiff Persad admits that he did not send any written demand to Defendant 30-days prior to filing the Original Complaint
Dkt. 1) in this action, which was filed on August 9, 2017. However,
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Plaintiff Persad states that he sent the required written demand to
Defendant on August 15, 2017 (FAC, Ex. K), which is more than 30days prior to Plaintiffs’ filing of the Amended Complaint (Dkt. 14),
which was filed on October 9, 2017. According to Plaintiff Persad,
the filing of the Amended Complaint completely supersedes the
Original Complaint, renders the Original Complaint a nullity and,
in effect, “cures” any failure to send the demand before filing suit in
the first instance. At least one district court in Georgia has implicitly recognized that the filing of an amended complaint 30-days after sending notice can cure a plaintiff’s failure to send the notice in
the first instance. See, e.g., Nickens v. Equifax Info. Servs., LLC,
No. 1:13-CV-0333-TWT-ECS, 2013 WL 4786975, at *4 (N.D. Ga.
Sept. 6, 2013) (granting motion for leave to amend to file third
amended complaint, and noting that the plaintiff failed to initially
give notice earlier).4 Defendant relies on a case from the Northern
District of Illinois, interpreting Georgia law, to argue that the filing
of an amended complaint cannot cure the failure to send notice 30days prior to filing the original complaint. See Gibbs v. Abbott
Labs., Inc., No. 01 C 1315, 2001 WL 1558279, at *4 (N.D. Ill. Dec.
The Court recognizes that in Nickens that the defendant did “not challenge[]
whether the actions taken by [the p]laintiff after filing his [motion to amend]
satisf[ied] the notice requirements of O.C.G.A. § 10–1–399(b). Nickens, 2013
WL 4786975, at FN 2. Nevertheless, the Court in Nickens permitted the plaintiff’s Fair Business Practice Act to proceed, even though the plaintiff failed to
give notice at least 30-days prior to filing the initial complaint.
4
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5, 2001). Gibbs, however, is distinguishable. The court in Gibbs
was ruling on a motion to dismiss the original and only complaint
filed in the case, not an amended complaint filed 30 days after giving notice, and not after a motion for leave to amend had been
granted. Id. at *2. Gibbs was also decided prior to the 2009 amendments to Rule 15. Prior to December 1, 2009, Rule 15 permitted a
plaintiff to amend the complaint “once as a matter of course ... before being served with a responsive pleading.” Fed. R. Civ. P.
15(a)(1)(A) (emphasis added). All other amendments required leave
of court.
The 2009 amendments to Rule 15 fundamentally altered
pleading practice. Now, a plaintiff may amend the complaint “as a
matter of course” within 21 days after serving it, OR “21 days after
service of a responsive pleading or 21 days after service of a motion
under Rule 12(b), (e), or (f), whichever is earlier.” Fed. R. Civ. P.
15(a)(1). In this case, Defendant filed a motion to dismiss the Original Complaint (Dkt. 12). In response, Plaintiff filed the Amended
Complaint (Dkt. 14) within 21 days “as a matter of course,” which
they had the right to do. “It is well-established that an amended
complaint supersedes an original complaint and renders the original complaint without legal effect.” In re Atlas Van Lines, Inc., 209
F.3d 1064, 1067 (8th Cir. 2000).
“[W]hen a plaintiff files an
amended complaint, the new complaint supersedes all previous
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complaints and controls the case from that point forward” and
“wipes away prior pleadings.” Massey v. Helman, 196 F.3d 727, 735
(7th Cir. 1999). See also B & H Medical, L.L.C. v. ABP Admin., Inc.,
526 F.3d 257, 268 n. 8 (6th Cir. 2008) (“a prior ‘complaint is a nullity, because an amended complaint supercedes all prior complaints’”) (quoting Drake v. City of Detroit, 2008 WL 482283 at *2
(6th Cir. Feb. 21, 2008); Parry v. Mohawk Motors of Michigan, Inc.,
236 F.3d 299, 306 (6th Cir. 2000) (“Plaintiff's first amended complaint, not his original complaint, was the legally operative complaint ...”).
In any event, Defendant notes that “the clear purpose of the
notice requirement is to foster early settlement negotiations before
litigation is commenced” (Dkt. 15, Pg ID 478). The Court finds that
Plaintiff Persad’s notice (filed approximately two months before the
filing of the Amended Complaint) sufficed to accomplish this goal.
The Court notes that Defendant has not settled this case with
Plaintiff Persad, despite having received Plaintiff Persad’s notice of
intent to sue under Georgia’s FBPA nearly a year ago. Plaintiff
Persad’s FBPA claim under Georgia law will be permitted to proceed.
h. Pennsylvania Unfair Trade Practices Act
Finally, Defendant challenges Plaintiffs Wright and Drummond’s claims under Pennsylvania’s Unfair Trade Practices and
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Consumer Protection Law (UTPCPL). Defendant first argues that
this claim is barred by the economic loss doctrine, and cites a Third
Circuit case in support of that contention – Werwinski v. Ford Motor
Co., 286 F.3d 661 (3d Cir. 2002). In Werwinski, the Third Circuit
held, based on its prediction at the time of how the Pennsylvania
Supreme Court would rule on the issue, that the economic loss doctrine applies not only to claims of negligence, but also to claims under the UTPCPL and to intentional torts. See id. at 674–82.
However, as numerous other courts have explained, there are
reasons to doubt the soundness of Werwinski's prediction. See, e.g.,
In re Gen. Motors LLC Ignition Switch Litig., 257 F. Supp. 3d 372,
435–36 (S.D.N.Y. 2017), modified on reconsideration, No. 14-MC2543 (JMF), 2017 WL 3443623 (S.D.N.Y. Aug. 9, 2017); DeFebo v.
Andersen Windows, Inc., 654 F.Supp.2d 285, 293–94 (E.D. Pa.
2009); O'Keefe v. Mercedes–Benz USA, LLC, 214 F.R.D. 266, 276
(E.D. Pa. 2003); Smith v. Reinhart Ford, 68 Pa. D. & C. 4th 432,
437–38 (C.P. Lanc. 2002); Zwiercan v. General Motors Corp., 58 D.
& C. 4th 251, 266–70, 2002 WL 31053838 (C. P. Phila. 2002). In
fact, citing intervening decisions by the lower Pennsylvania courts,
several district courts within the Third Circuit itself have gone so
far as to decline to follow Werwinski. See, e.g., Landau v. Viridian
Energy PA LLC, 223 F. Supp. 3d 401, 410-415 (E.D. Pa. 2016) (citing cases). The Third Circuit’s decision, of course, is not binding on
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this Court. But in any event, the Court concludes, substantially for
the reasons enumerated in the Landau Court, that the more recent
cases have the better of the argument. Thus, the Court concludes
that the economic loss doctrine does not call for dismissal of the
Pennsylvania Plaintiffs’ UTPCPL claims.
V.
Conclusion
For the foregoing reasons, Defendant’s motion to dismiss is DENIED. Defendant is hereby ordered to file an Answer to Plaintiffs’
Amended Complaint (Dkt. 14) within fourteen (14) days of the date
of this order. The parties are further directed to file a Rule 26(f)
discovery plan within fourteen (14) days of Defendants’ Answer,
and the Court will set this matter for a telephonic scheduling conference.
SO ORDERED.
s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
Dated: July 16, 2018
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Certificate of Service
I hereby certify that this Order was electronically submitted
on July 16, 2018, using the CM/ECF system, which will send notification to each party.
s/A. Chubb
Case Manager
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