Chapman et al v. General Motors LLC
Filing
80
OPINION and ORDER GRANTING IN PART AND DENYING IN PART 48 Motion to Dismiss; and Resolving 52 , 62 , 68 , 69 , 72 , 74 , 75 , 78 Other Motions. Signed by District Judge Terrence G. Berg. (Attachments: # 1 Table of Claims) (AChu)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
MARK D. CHAPMAN, ET AL.
2:19-CV-12333-TGB-DRG
ORDER GRANTING IN PART
AND DENYING IN PART
MOTION TO DISMISS
(ECF NO. 48);
Plaintiffs,
vs.
AND RESOLVING OTHER
MOTIONS
(ECF NOS. 52, 62, 68, 69, 72, 74,
75, and 78)
GENERAL MOTORS LLC,
Defendant.
This is a large putative class action: twenty-one Named Plaintiffs
seek to sue General Motors (“GM”) over its use of the Bosch CP4 fuel
pump in GMC and Chevrolet diesel trucks from model year 2011-2016.
They allege fraud on GM’s part that has subsequently caused them to
suffer injury. There are 114 counts in the 574-page Second Amended
Complaint (“SAC”) covering federal law as well as state fraudulent
concealment, breach of contract, consumer protection, warranty, and
unjust enrichment claims under the laws of 49 states. ECF No. 40. For
the reasons that follow, Defendant’s Motion to Dismiss (ECF No. 48) is
GRANTED IN PART and DENIED IN PART. A summary of the
counts that survive and those that do not is included in the Table of
Claims that follows the Order. Additionally, Defendant’s motion to strike
Plaintiffs’ class allegations is DENIED.
1
Contents
Contents..................................................................................................... 2
I.
BACKGROUND ................................................................................. 4
A. Alleged defects of the CP4 pump when combined with U.S. diesel
fuel ........................................................................................................ 4
B.
Structure of claims in the SAC and Motion to Dismiss ................ 8
C.
Outstanding motions.................................................................... 10
II. STANDARD OF REVIEW ............................................................... 10
III. ANALYSIS ...................................................................................... 12
A.
Standing ....................................................................................... 12
1. Standing for nationwide claims or state claims where there is no
named plaintiff from that state ....................................................... 12
2.
Standing for injunctive relief .................................................... 17
3.
Lack of a cognizable injury........................................................ 18
B.
Deficiencies in IWM claims .......................................................... 20
1.
Sufficiency of allegations regarding merchantability............... 20
2.
Certain claims where state law requires a showing of privity . 22
3. Certain claims not within the terms of the IWM as limited by
state law ........................................................................................... 25
4. Certain claims barred because Plaintiffs did not provide pre-suit
notice................................................................................................. 26
5.
Certain claims time-barred ....................................................... 31
C.
Magnuson-Moss Warranty Act .................................................... 35
D.
Breach of Contract ....................................................................... 36
E.
Deficiencies in fraudulent concealment claims ........................... 36
1. Failure to meet Rule 9(b)’s particularity requirements for fraud
allegations ........................................................................................ 40
2.
Failure to allege knowledge at the time of sale ........................ 42
3.
Failure to allege a duty to disclose............................................ 47
2
4.
Economic loss doctrine .............................................................. 54
5. Certain state product liability statutes preclude fraudulent
concealment claims .......................................................................... 57
6.
F.
Failure to plead injury .............................................................. 58
Consumer protection .................................................................... 59
1.
Alaska claim is a placeholder .................................................... 59
2. Insufficient pleading of deceptive conduct, reliance, and
causation........................................................................................... 60
3.
GM’s knowledge of the defect at the time of sale ..................... 61
4. Certain state statutes do not allow class actions to be brought
with state consumer protection claims ............................................ 61
5.
Colorado’s bar on class claims for money damages .................. 62
6. Michigan’s consumer protection statute exempts automobile
sales .................................................................................................. 63
7. Class action notice requirement in Ohio’s consumer protection
statute............................................................................................... 64
8. North Carolina and Pennsylvania bar consumer protection
claims solely for economic losses...................................................... 64
9. Louisiana Products Liability Act precludes consumer protection
claim ................................................................................................. 65
10. Claims under the California Unfair Competition Law (“UCL”)
barred by adequate legal remedies .................................................. 65
11. Louisiana, North Dakota, and Oklahoma do not allow claims
for injunctive relief ........................................................................... 66
12.
Sufficient allegations to show injury...................................... 66
13. Alabama and Pennsylvania Named Plaintiffs cannot meet the
requirements of state statutes ......................................................... 66
14. Arkansas statute does not allow claims for “diminution of
value” ................................................................................................ 67
15.
Claims in certain states are time-barred ............................... 67
3
G.
Unjust enrichment ....................................................................... 69
H.
Class allegations .......................................................................... 70
1.
Statutory requirements for a class action under the MMWA .. 71
2.
Requirements of Fed. R. Civ. P. 23 ........................................... 73
I.
Outstanding motions.................................................................... 74
1. Motions related to supplemental briefing (ECF Nos. 68, 69, 72,
74, 75) ............................................................................................... 74
2.
Motions related to Plaintiff Gary Goodwin (ECF Nos. 52, 62) . 79
3. Defendant’s Motion to Dismiss Brandon Tirozzi for Failure to
Prosecute (ECF No. 78) .................................................................... 79
CONCLUSION ........................................................................................ 80
I.
A.
BACKGROUND
Alleged defects of the CP4 pump when combined with
U.S. diesel fuel
Plaintiffs all bought diesel fuel GMC and Chevrolet trucks from GM
for the model years 2011-2016, with 6.6L Duramax engines and a Bosch
CP4 model high-pressure fuel injection pump. ¶ 1, ECF No. 40,
PageID.3393. They allege injury at the point of sale: they paid a premium
of $5,000-8,000 for these trucks because they run on diesel and were
advertised to have a longer life, greater fuel efficiency, and other features
above and beyond other vehicles. Id. at ¶ 7, PageID.3393.
The CP4 pump is the lynchpin of the trucks’ fuel supply system. As
alleged by Plaintiffs, design flaws in the CP4 pump cause dangerous
rubbing and friction between metal parts of the pump when it runs. The
result is a buildup of metal shavings in the fuel system that begins to
4
accumulate as early as the first time the engine is started.
Contamination from the metal debris can lead to catastrophic engine
failure. Id. at ¶¶ 123-35, PageID.3478-85. This wear and tear in the fuel
system, and the subsequent potential for malfunction, is exacerbated by
a factor unique to the United States: our diesel fuel is “drier,” or less
lubricious, than the diesel fuel available in other countries due to our
different regulatory standards.1 The CP4 pump itself uses the diesel fuel
for lubrication. Due to its poor design that inherently requires more
lubrication than other fuel pumps, Plaintiffs allege that our “dry” diesel
is uniquely unsuited to keep a CP4 pump functioning properly. Id. at ¶¶
148-52, PageID.3491-93.
It is this combination of the alleged subpar pump design and lack
of lubricity from U.S. diesel fuel that leads to wear and tear which can
cause the small metal shavings to build up within the pump or within the
engine block and fuel system generally. Too much buildup of metal in the
fuel injectors can lead to “catastrophic failure” where the truck will
immediately stop running, requiring a tow and often replacement of not
just the fuel injectors, but the entire fuel supply system in the vehicle. Id.
at ¶¶ 137-40, PageID.3486-87. Because the fuel injection system and
In order to comply with our environmental regulations, diesel fuel in
the U.S. is refined through a process called hydrodesulfurization. This
process removes sulfur as well as a variety of other nitrogen and oxygen
compounds, the latter of which are important to making diesel fuel
lubricious. ¶ 149, ECF No. 40, PageID.3491.
5
1
engine component parts are contaminated with metal shards, during a
catastrophic failure event the vehicle often shuts off while in motion and
cannot be restarted. Id. at ¶ 4, PageID.3392.
By way of example, Plaintiff Nathan Howton purchased a used
2015 Chevrolet Sierra 2500 HD in September 2015 from an authorized
GM dealership. In February 2019, he was traveling with his family and
stopped to refuel. Two miles into their resumed journey, “the engine
backfired, creating a plume of smoke.” The truck lost power and Plaintiff
had to “coast the truck onto the driveway of an unoccupied home.” The
family spent the night in their trailer. Upon finally getting to a GM
dealership, Howton was told that GM would not cover the repair expense
related to the CP4 pump because the truck was out of warranty. Id. at ¶
73, PageID.3442. He inspected the engine and injection pump himself
and found a significant quantity of metal shavings, a photograph of which
appears in the SAC:
6
Image of Plaintiff Nathan Howton’s engine after catastrophic failure
event, showing metal shavings. Id.
Sixteen of the named Plaintiffs report experiencing a similar
catastrophic failure stall out while driving, requiring their truck to be
towed and resulting in an eventual repair cost sometimes reaching
$10,000 or more. And even if the vehicle does not fail, wear and tear on
the pump (which Plaintiffs allege will always occur to some degree due to
its design and the use of “dry” diesel fuel) will damage the fuel injectors
and other parts of the engine. Id. at ¶ 141, PageID.3487.
Plaintiffs allege GM was aware of these issues with the CP4 fuel
pump even before it began to sell trucks with the pump incorporated.
Despite that, it marketed the vehicles as having increased durability and
7
fuel efficiency, in part due to their use of diesel. Id. at ¶¶ 8, 185. Plaintiffs
also allege that GM did not take steps to remedy the problem, and instead
actively concealed the defect for as long as possible. Id. at ¶¶ 9, 186-88.
GM stopped using the CP4 pump after the 2016 model year of the class
vehicles, switching to another model of pump that had been in use since
2004. Id. at ¶ 218.
B.
Structure of claims in the SAC and Motion to Dismiss
Plaintiffs allege the following broad categories of claims under
federal law and the laws of 49 states2 and the District of Columbia:
Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. §2301
Fraudulent concealment
Breach of contract
Implied warranty of merchantability (“IWM”) (state-specific
statutes)
Consumer protection (state-specific statutes)
Unjust enrichment (“UE”) (state-specific statutes)
There are 114 counts: one for the MMWA, one for fraudulent
concealment on behalf of all of the sub-classes, one for breach of contract
on behalf of all of the sub-classes, and the rest by state (naming the
applicable consumer protection, IWM, and UE statutes for each state).
Every state has at least one consumer protection claim and California,
Parties are bringing claims under Texas state law in a separate action
that they have chosen not to consolidate in this Court. See Click v. Gen.
Motors LLC, No. 2:18-CV-455, 2020 WL 3118577 (S.D. Tex. Mar. 27,
2020). Texas is included, however, in the federal Magnuson-Moss
Warranty Act claim.
2
8
Georgia, New York, and South Carolina have two each for a total of 54
counts; 42 states have IWM claims and California has two for a total of
43 counts; 14 states have UE claims.
GM seeks to dismiss the SAC in full, and challenges Plaintiffs’
claims under theories relating to:
A.
B.
C.
D.
E.
F.
G.
H.
Standing
Deficiencies in the IWM claims
Magnuson-Moss Warranty Act
Breach of contract
Deficiencies in fraudulent concealment claims
Consumer protection
Unjust enrichment
Class allegations
Within each of these broad categories, GM makes numerous
arguments as to why claims should be dismissed. See Ex. 1—Chart
Summarizing Grounds for Dismissal, ECF No. 48-2. Some challenges can
be resolved the same way for all claims, while others have state-specific
considerations
and
outcomes.
Additionally,
some
claims
could
theoretically be dismissed under more than one theory. To promote
clarity, the Court will independently address all state-specific theories
that GM has put forward, even if the resulting analysis shows that
certain claims could be dismissed for more than one reason. The attached
Table of Claims lists all the reasons any given count is being dismissed,
if there are more than one.
9
C.
Outstanding motions
The Court held oral argument on January 29, 2021, primarily to
resolve the Motion to Dismiss (ECF No. 48). At the conclusion of the
hearing, the Court asked both sides for supplemental briefing on several
specific issues. GM filed a supplemental brief (ECF No. 67), and Plaintiffs
subsequently moved to file their supplemental brief under seal (motions
at ECF Nos. 68, 69, with an additional chart regarding state-specific
caselaw at ECF Nos. 70, 71), indicating that they felt compelled to ask
for a seal by an earlier protective order (ECF No. 44) in this case. GM
next filed a Motion to Strike the supplemental brief (ECF No. 72),
arguing that Plaintiffs improperly included information outside the scope
of the Court’s request. Plaintiffs’ Response to the motion to strike (ECF
Nos. 74, 75) also begins with a motion to seal.
Also outstanding on the docket are Plaintiffs’ Motion to Withdraw
as counsel for Gary Goodwin (ECF No. 52), Defendant’s Motion to Compel
also as related to Gary Goodwin (ECF No. 62), and Defendant’s Motion
to Dismiss Brandon Tirozzi for Failure to Prosecute (ECF No. 78).
The Court has thoroughly considered all these outstanding matters
and will address the other pending motions in this Order as well.
II.
STANDARD OF REVIEW
Rule 12(b)(6) of the Federal Rules of Civil Procedure permits
dismissal of a lawsuit or claim where the defendant establishes plaintiff’s
“failure to state a claim upon which relief can be granted.” Jones v. City
10
of Cincinnati, 521 F.3d 555, 562 (6th Cir. 2008). Consideration of a Rule
12(b)(6) motion is confined to the pleadings. Id. In evaluating the motion,
courts “must construe the complaint in the light most favorable to the
plaintiff, accept all well-pled factual allegations as true and determine
whether the plaintiff undoubtedly can prove no set of facts consistent
with their allegations that would entitle them to relief.” League of United
Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (citing
Kottmyer v. Maas, 436 F.3d 684, 688 (6th Cir. 2006)).
Though this standard is liberal, it requires a plaintiff to provide
“more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action” in support of her grounds for entitlement
to relief. Albrecht v. Treon, 617 F.3d 890, 893 (6th Cir. 2010) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2007)). Under Ashcroft v. Iqbal,
the plaintiff must also plead “factual content that allows the court to
draw the reasonable inference that the defendant is liable for the
misconduct alleged.” 556 U.S. 662, 678 (2009) (citation omitted). A
plaintiff falls short if she pleads facts “merely consistent with a
defendant’s liability” or if the alleged facts do not “permit the court to
infer more than the mere possibility of misconduct.” Albrecht, 617 F.3d
at 893 (quoting Iqbal, 556 U.S. at 678-79).
11
III. ANALYSIS
A.
Standing
Defendant brings three challenges related to standing. None are
meritorious, so the Motion to Dismiss based on any reasons pertaining to
standing is denied.
1. Standing for nationwide claims or state claims where
there is no named plaintiff from that state
Article III “[s]tanding requires Plaintiffs to show 1) that they have
suffered an injury-in-fact that was 2) caused by Defendants' conduct and
that 3) this Court can likely redress the injury with a decision for
Plaintiffs.” Kanuszewski v. Michigan Dep't of Health & Human Servs.,
927 F.3d 396, 405 (6th Cir. 2019). GM alleges that for states that are not
represented by a Named Plaintiff, no one can show injury for claims
related to that state, and therefore the court does not have jurisdiction
over those claims. Additionally, it alleges that each Named Plaintiff can
only allege injuries in their own states, and therefore they have no
standing for nationwide claims. ECF No. 48, PageID.4922-23. Plaintiffs
say this question should be addressed at the class certification stage. ECF
No. 53, PageID.5969-70.
This challenge brings up a question specific to class actions: if
Article III standing and class certification are related, in what order
should they be addressed? Can a confirmation of Article III standing be
deferred to the class certification stage, even though standing is a central
12
part of a court’s jurisdiction? This question was first raised in a pair of
Supreme Court cases, Amchem and Ortiz, which held that when class
certification issues are “logically antecedent” to Article III concerns, and
“themselves pertain to statutory standing,” the Article III standing
inquiry can essentially be combined with the class certification inquiry.
Ortiz v. Fibreboard Corp., 527 U.S. 815, 831 (1999); Amchem Products,
Inc. v. Windsor, 521 U.S. 591 (1997); see generally Linda S. Mullenix,
Standing and Other Dispositive Motions After Amchem and Ortiz: The
Problem of “Logically Antecedent” Inquiries, 2004 Mich. St. L. Rev. 703,
729 (2004).
Courts in our district have considered this question in the context
of large-scale class actions pertaining to auto defects. Cases that required
a named plaintiff to have standing for every claim include Wozniak v.
Ford Motor Co., No. 2:17-CV-12794, 2019 WL 108845, at *1 (E.D. Mich.
Jan. 4, 2019), McKee v. Gen. Motors LLC, 376 F. Supp. 3d 751, 755 (E.D.
Mich. 2019) (relying on Wozniak and Smith [cited below]), and Matanky
v. Gen. Motors LLC, 370 F. Supp. 3d 772, 784 (E.D. Mich. 2019) (same).
The reasoning in these cases derives from Smith v. Lawyers Title Ins.
Corp, where Judge Murphy concluded that Amchem and Ortiz “should be
construed in a manner that permits consideration of the standing issue
now, prior to class certification,” and found that a plaintiff who does not
allege injury in a state lacks standing to bring claims arising under the
laws of that state. No. 07-12124, 2009 WL 514210, at *3 (E.D. Mich. Mar.
13
2, 2009). See also Parks v. Dick's Sporting Goods, Inc., No. 05-CV-6590
(CJS), 2006 WL 1704477, at *3 (W.D.N.Y. June 15, 2006) (a clear
explanation of the Smith position).
By contrast, this Court found in Bledsoe v. FCA US LLC that it is
not required at this stage in the litigation for a complaint to have a named
plaintiff from every state where claims are alleged: when “Plaintiffs are
not seeking relief for themselves under the laws of states where they
don't live,” but rather are “advancing ‘claims for relief under the statutes
of the jurisdictions in which they reside but seek similar relief for absent
class members’ under the statutes for consumer protection, fraudulent
concealment, and breach of contract of those absent members’ states,”
that makes the class certification question logically antecedent to the
Article III standing question. 378 F. Supp. 3d 626, 641-42 (E.D. Mich.
2019) (quoting In re Auto. Parts Antitrust Litig., No. 12-MD-02311, 2013
WL 2456612, at *11 (E.D. Mich. June 6, 2013)). See also Hoving v.
Transnation Title Ins. Co., 545 F. Supp. 2d 662, 667-68 (E.D. Mich. 2008)
(finding that when the claim of named plaintiffs “is typical of those
individuals whose claims arise under the laws of other states,” the
“question whether he has standing to proceed as a class representative
will be subsumed in the class certification decision.”).
Given these two competing approaches, the Court will examine the
logic behind both. The central tension between them is their
conceptualization of “injury.” Bledsoe and Hoving consider “injury” as the
14
general harm accruing from the conduct of the defendant according to the
allegations in a complaint. Smith considers “injury” to exist only where a
named plaintiff can meet the requirements of every cause of action
named in a complaint.
The logic of Bledsoe and Hoving derives from Fallick, a Sixth
Circuit ERISA case where the defendant sought dismissal on the grounds
that the named plaintiff was on a different insurance plan than some
potential class members. The defendant said that any claims related to
the other insurance plans should be dismissed, but the Court disagreed,
distinguishing between (1) a named plaintiff’s own Article III standing
and (2) his relationship to other class members. The former must exist in
order for the case to move forward, but the latter has to do with the
requirements of Fed. R. Civ. P. 23, not standing. The Court held that
named plaintiff Fallick did not have to be a member of every plan to (1)
establish standing for his own injury under his plan and (2) also serve as
a representative for and maintain the class claims related to other plans.
Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 422 (6th Cir. 1998).
This is analogous to the situation here. The plaintiff’s complaint in
Fallick was about “the methodology used to determine benefits,” which
he alleged was the root cause of the harm and which was common to all
potential class members, no matter the particular ERISA plan they were
enrolled in. Fallick, 162 F.3d at 423. Here, Plaintiffs’ complaint is about
the CP4 pump and its effects on truck engines, which is alleged to cause
15
harm and is common to all class members, no matter exactly which truck
they bought or what the terms of their state consumer protection laws
are. The general wrongdoing GM is accused of applies to the Named
Plaintiffs and the absent putative class members alike, making the class
certification question logically antecedent to the Article III standing
question.
Additionally, looking closely at the cases cited by Smith, they
involve comparatively extreme factual circumstances that implicate a
lack of any Article III standing for the named plaintiffs in question:
defendants who did not cause injury to the named plaintiffs, but
theoretically caused injury to potential class members (Easter v. Am. W.
Fin., 381 F.3d 948, 962 (9th Cir. 2004)); multiple reasons for injury, only
some of which were suffered by the named plaintiff, and others that were
theoretically suffered by potential class members (Griffin v. Dugger, 823
F.2d 1476, 1483 (11th Cir. 1987)); a named plaintiff lacking standing at
all (Stone v. Crispers Restaurants, Inc., No. 606CV1086ORL31KRS, 2006
WL 2850103, at *2 (M.D. Fla. Oct. 3, 2006)). None of these situations is
present in the facts of this case. The logic of Fallick also indicates that
the Sixth Circuit has deliberately decided to embrace a “general harm
accruing from conduct” conceptualization of injury.
Most courts agree that Amchem and Ortiz did not mandate one
approach or the other, but merely indicated a “limited exception” that
courts may defer the Article III standing question to the class
16
certification stage in certain scenarios. See Mullenix, Standing and Other
Motions, at 727. The Court finds this to be the appropriate path to follow
here and declines to dismiss nationwide or state-specific claims simply
because there is no named plaintiff representing that state.
2. Standing for injunctive relief
“When seeking declaratory and injunctive relief, a plaintiff must
show actual present harm or a significant possibility of future harm in
order to demonstrate the need for pre-enforcement review” in addition to
the basic standing requirements of injury, causation, and redressability.
National Rifle Ass'n of Am. v. Magaw, 132 F.3d 272, 279 (6th Cir. 1997).
Here, GM says Plaintiffs do not allege that they plan to buy another
class vehicle in the future, and therefore they do not show a risk of future
harm. ECF No. 48, PageID.4924. Plaintiffs say in response that there is
an “ongoing harm” because their trucks could experience catastrophic
failure at any time, and it is on this basis they seek injunctive relief in
the form of replacement or recall from GM. ECF No. 53, PageID.5971.
The Sixth Circuit has found ongoing harm where it is “not too
speculative” that future harm could occur, and where “a reasonable
inference” can be drawn that an as-yet-unrealized harm might come to
pass. Kanuszewski, 927 F.3d at 410-11. Here, for the Named Plaintiffs
who have not yet experienced a catastrophic failure, it does not seem
speculative that it could happen to them based on the experiences of other
Named Plaintiffs with these trucks. For the Named Plaintiffs who have
17
already experienced catastrophic failure, they have alleged that it might
happen again, because even after repair or replacement of the CP4 pump
in their truck, the usage of dry diesel fuel could cause the malfunctions
to repeat themselves. ECF No. 40, ¶ 2 (a “ticking time bomb”),
PageID.3391; ¶¶ 3-5, 7, 11-12, PageID.3391-93, 3395. At least one Named
Plaintiff has experienced more than one failure with the same vehicle.
Id. at ¶ 51, PageID.3426-27. In view of these allegations, at this stage,
Plaintiffs have sufficiently alleged a possibility of future harm to give
them standing for injunctive relief.3
3. Lack of a cognizable injury
GM identifies four Named Plaintiffs (Gwinn, McDuffie, Dearborn,
and Lawson4) who never experienced a “catastrophic failure,” or indeed
any other issue with their trucks. GM argues they have not therefore
suffered any injury. ECF No. 48, PageID.4924-26. However, this Court
has recognized “overpayment” as a type of injury in this sort of situation:
The prevailing jurisprudence in this district . . . thus holds
that a consumer who alleges she would not have purchased a
vehicle (or would have paid less for it) had the manufacturer
not misrepresented the vehicle to customers’ detriment or
Defendants rely on Matanky, which is distinguishable. There, the Court
found no standing to seek injunctive relief under a statute that was
specifically addressing injury due to “deceptive trade practices”—after
having already purchased the product at issue, “deceptive trade
practices” could not cause future harm. 370 F. Supp. 3d at 801-82.
4 From the Court’s review of the SAC, it would appear that Plaintiff
Recchia could also be included in this group.
18
3
omitted mention of its significant limitations, has alleged a
plausible injury-in-fact.
Raymo v. FCA US LLC, 475 F. Supp. 3d 680, 694 (E.D. Mich. 2020)
(collecting cases).
All four of these Plaintiffs allege that they paid a premium for these
diesel trucks based on representations of durability, power, reliability,
and fuel efficiency, and that they would not have bought the vehicles or
would have paid less for them but for GM’s misrepresentations. ECF No.
40, ¶¶ 18-19, 21-22, 97-98, 105-106, 188, PageID.3400-04, 3460-62, 34663468, 3515-16. The alleged defect, which does not lead to the exact same
consequences in every truck, is not as clean-cut in this case as some
others. Cf. Raymo, 475 F. Supp. 3d at 687 (every car with alleged
washcoat and flash defects exceeded emissions limits). But at this stage,
taking Plaintiffs’ allegations as true, every truck with a CP4 pump is per
se defective because of the inherent potential for malfunction due to its
design. ECF No. 40, PageID.3516. This is sufficient to allege an
overpayment theory of injury for standing.
19
B.
Deficiencies in IWM claims
Plaintiffs bring IWM claims for state sub-classes under the specific
laws of each state.5 Upon examination of these claims and the laws of
those states, the Court concludes that 7 of the 43 IWM claims will be
dismissed.6
1. Sufficiency of allegations regarding merchantability
In this argument GM does not specifically challenge the sufficiency
of any individual IWM claim, but rather asserts generally that all these
counts fail because they do not allege that the vehicles were
unmerchantable at the time Plaintiffs purchased them. Neither party
argues that the standard for merchantability is meaningfully different in
different states, and the Court’s review of state laws did not identify any
barrier to considering this argument uniformly across the states.
To be merchantable means that a good is “fit for the ordinary
purposes for which such goods are used.” UCC § 2-314. GM asserts that
the “ordinary purpose” of a vehicle is to provide transportation, and
therefore to the extent that all Named Plaintiffs admit to being able to
drive their trucks, all the allegations of breach of an IWM fail. ECF No.
48, PageID.4926-28. Plaintiffs counter that this is a “crimped” definition
of ordinary purpose, and that courts have regularly recognized that
There are no IWM claims for AZ, CT, GA, ID, IA, KY, and WI.
Counts C.II (AL), K.III (FL), O.II (IL), HH.III (NY), and RR.II (TN) (lack
of privity); X.II (MI) (lack of notice); O.II (IL), X.II (MI), and UU.II (VA)
(time-barred).
20
5
6
automobiles must provide safe and reliable transportation for “ordinary
purpose” to have any meaning. ECF No. 53, PageID.5996. The fact that
there is a latent potential for engine stalls and catastrophic failure,
Plaintiffs say, is what makes the trucks unfit for their ordinary purpose
and therefore unmerchantable.
In this district, Judge Roberts recently held that “cars are not
merchantable merely because they are able to provide transportation.
Rather, to be fit for its ordinary purpose, a standard road vehicle must be
able to provide safe and reliable transportation and be substantially free
of defects.” Matanky, 370 F. Supp. 3d at 785 (design defect causing engine
to overheat and car to unexpectedly decrease speed); see also In re FCA
US LLC Monostable Elec. Gearshift Litig., 334 F.R.D. 96, 112-14 (E.D.
Mich. 2019) (defective gear shift). The Court finds Plaintiffs’ allegations
of unexpected stall-out, which could occur at any time due to a fuel pump
failure and could also result in potentially extensive repair costs, to be
sufficient to allege that these trucks were not “safe and reliable.”
The defects at issue in the cases cited by GM (where courts found
that unmerchantability was not sufficiently alleged) are factually
distinguishable from and less serious than the defect at issue here. See,
e.g., Rosenbaum v. Toyota Motor Sales, USA, Inc., No. 16-cv-12645, 2016
WL 9775018, at *2 (E.D. Mich. Oct. 21, 2016) (electric car’s range was
below what was advertised and car did not operate in electric-only mode
at certain temperatures); Gomez v. Mercedes-Benz USA LLC, No. 335661,
21
2018 WL 987398, at *5 (Mich. Ct. App. Feb. 20, 2018) (no defect alleged);
Bussian v. DaimlerChrysler Corp., 411 F. Supp. 2d 614, 623 (M.D.N.C.
2006) (defective ball joints, never caused mechanical problems or caused
vehicle to stop working). By contrast, Plaintiff’s allegations regarding
engine stalls and catastrophic failure are serious enough to plausibly
allege unmerchantability, and the Court declines to dismiss any IWM
claims on this ground.7
2. Certain claims where state law requires a showing of
privity
GM alleges that the following states have privity requirements for
IWM claims: Alabama, California, Florida, Illinois, Michigan, Nevada,
New York, North Carolina, Tennessee, Virginia, Washington, and West
Virginia. If Plaintiffs in any of these states purchased their vehicles from
independent dealerships or other third parties, GM argues, they cannot
allege privity—that is, a direct legal connection between the defendant
and the plaintiff through a transaction. ECF No. 48, PageID.4928.
Plaintiffs do not assert that they have privity with GM, but instead assert
various state-by-state exceptions under which a lack of privity does not
bar an IWM claim, and argue that it is premature to dismiss claims at
Plaintiffs also cite litigation in other courts dealing with the same defect
at issue here where IWM claims were allowed to move forward at this
stage. See In re Gen. Motors LLC CP4 Fuel Pump Litig., 393 F. Supp. 3d
871, 883 (N.D. Cal. 2019); Click, 2020 WL 3118577, at *11. The Court is
not bound by these opinions on this issue but finds their reasoning to also
support this outcome.
7
22
this stage because they allege sufficient facts to meet the standards for
these exceptions. ECF No. 53, PageID.5998-6000.
Every state has its own precedent governing privity requirements
for IWM claims, and so these claims must each be analyzed individually.
Having reviewed the Parties’ briefs and the relevant caselaw, in the table
below the Court will cite to the authority it found most persuasive along
with its conclusion on the outcome:
State
Authority
Conclusion
AL
Weidman v. Ford Motor Co., No. 18CV-12719, 2019 WL 3003693, at *4
(E.D. Mich. July 10, 2019).
Has a privity
requirement and no
exceptions; claim fails.
CA
In re Gen. Motors LLC CP4 Fuel
Pump Litig., 393 F. Supp. 3d 871,
882 (N.D. Cal. 2019).
Recognizes third-party
beneficiary exception
to privity in limited
circumstances.8
FL
Padilla v. Porsche Cars N. Am., Inc., Has a privity
391 F. Supp. 3d 1108, 1116 (S.D. Fla. requirement and no
2019).
exceptions; claim fails.
IL
McCabe v. Daimler AG, 948 F. Supp.
2d 1347, 1362 (N.D. Ga. 2013);
Quitno v. Gen. Motors, LLC, No.
1:18-CV-07598, 2020 WL 777273, at
*5 (N.D. Ill. Feb. 18, 2020).
Has a privity
requirement and no
exceptions; claim fails.
The Court also notes that as to any California-law claims, the holdings
of In re CP4 are arguably binding on this Court as the law of the case
because it has been consolidated with the instant action.
23
8
MI
Montgomery v. Kraft Foods Glob.,
Inc., 822 F.3d 304, 309 (6th Cir.
2016).
No privity
requirement.
NV
Matanky v. Gen. Motors LLC, 370 F.
Supp. 3d 772, 787 (E.D. Mich. 2019).
No privity
requirement.
NY
Cummings v. FCA US LLC, 401 F.
Supp. 3d 288, 311-14 (N.D.N.Y.
2019); Dixon v. Ford Motor Co., No.
14-CV-6135 JMA ARL, 2015 WL
6437612, at *4 (E.D.N.Y. Sept. 30,
2015).
N.C. Gen. Stat. §§ 25-2-103(1)(d), 252-314.
Has a privity
requirement and no
exceptions; claim fails.
TN
Americoach Tours, Inc. v. Detroit
Diesel Corp., No. 04-2016 B/V, 2005
WL 2335369, at *8-9 (W.D. Tenn.
Sept. 23, 2005).
Has a privity
requirement and no
exceptions; claim fails.
VA
McCabe v. Daimler AG, 948 F. Supp.
2d 1347, 1362 (N.D. Ga. 2013).
No privity requirement
for direct damages.
WA
Tex Enterprises, Inc. v. Brockway
Standard, Inc., 66 P.3d 625, 628
(Wash. 2003).
Recognizes third-party
beneficiary exception
to privity in limited
circumstances.
WV
Sewell v. Gregory, 371 S.E.2d 82, 83
(W. Va. 1988).
No privity
requirement.
NC
No privity
requirement.
For states that recognize a third-party beneficiary exception to the
privity requirement, the Court finds that Plaintiffs have sufficiently
alleged they are third-party beneficiaries of the contract between GM and
its dealers at this stage of the litigation. SAC ¶ 285, PageID.3573. Those
claims can therefore move forward. The claims under the Alabama (C.II),
24
Florida (K.III), Illinois (O.II), New York (HH.III), and Tennessee (RR.II)
IWM statutes, where no exceptions are recognized, are dismissed for
failure to sufficiently allege privity.
3. Certain claims not within the terms of the IWM as
limited by state law
Parties agree that the class vehicles came with a “60-month,
100,000-mile written warranty” that purported to limit any implied
warranty to that duration. ECF No. 48, PageID.4930. GM asserts that
certain states do in fact allow manufacturers to limit implied warranties
to the duration of an express warranty, and that therefore some of the
Named Plaintiffs’ IWM claims are untimely because they are outside the
sixty-month and/or 100,000-mile limits. Id. at PageID.4930-31. Plaintiffs
argue that it does not matter if IWM claims can be limited to the express
warranty terms in certain states, because the breach of warranty
occurred at the point of sale—anyone who bought a class vehicle was
buying a defective vehicle from the start. ECF No. 53, PageID.6003.
Plaintiffs are correct. At this stage, they reference a uniform defect,
the allegedly defectively designed CP4 pump, that was present in trucks
and made them unmerchantable. Essentially, Plaintiffs allege that their
trucks were “never fit for their ordinary purpose,” so the question of
whether a defect manifested within the warranty period does not arise.
See Varner v. Domestic Corp., No. 16-22482-CIV, 2017 WL 3730618, at
*10 (S.D. Fla. Feb. 7, 2017) (collecting cases); Sloan v. Gen. Motors LLC,
25
287 F. Supp. 3d 840, 880 (N.D. Cal. 2018) (“the defect was inherent to the
engine design and, therefore, existed at the time of purchase.”).
The main case GM cites is distinguishable—there, although the
plaintiff’s allegation was ostensibly of an “inherent” screen defect in an
Apple computer, he did not support his allegation with sufficient detail
to make out a “point of sale” breach, and so the court applied the
warranty’s time limits. The allegations about the defect being inherent
to the product were “conclusory” and “lack[ed] sufficient detail.”
Hovsepian v. Apple, Inc., No. 08-5788 JF (PVT), 2009 WL 2591445, at *78 (N.D. Cal. Aug. 21, 2009). The cases cited by GM in n.8 (ECF 56,
PageID.6038-39), in which courts find allegations insufficient to make
out a “point of sale” defect claim even at the motion to dismiss stage,
involve general allegations about a latent defect similar to those in
Hovsepian. Here, Plaintiffs allege a specific latent defect, the CP4 pump,
that they say is the cause of the breach of warranty. The Court therefore
declines to dismiss any IWM claims as being limited by the express
warranty.
4. Certain claims barred because Plaintiffs did not
provide pre-suit notice
GM alleges that Alabama, Florida, Illinois, Maryland, Michigan,
Montana, New York, Pennsylvania, and Virginia require pre-suit notice
for an IWM claim, and that Plaintiffs did not provide it. ECF No. 48,
PageID.4931. Plaintiffs state that many of Named Plaintiffs brought
26
their truck to a dealer for repair, which should suffice as notice;
additionally, they state that through letters submitted pre-suit and other
lawsuits alleging this same defect, GM should have received sufficient
notice for this action; lastly, they state that sufficiency of notice should
be a jury question. ECF No. 53, PageID.6000-02.
Generally, the purpose of notice requirements is to provide the
manufacturer with a commercially reasonable opportunity to address a
defect. Different states have varying levels of strictness in terms of the
notice requirement—some find presentation to the dealer or filing of a
lawsuit to suffice, and some make exceptions to the requirement if the
manufacturer cannot show prejudice, but others interpret it very strictly.
Courts in our district have held that when Plaintiffs can
successfully allege providing at least some notice, the question of
adequacy and timeliness of notice becomes one of fact, and the claim
should not be defeated at the motion to dismiss stage. See, e.g., In re FCA
US LLC Monostable Elec. Gearshift Litig., 446 F. Supp. 3d 218, 227 (E.D.
Mich. 2020). The analysis in these cases proceeds on the logic that even
if different states have different standards regarding notice, at the
motion to dismiss stage it is unnecessary to scrutinize state specific law
as long as some notice is alleged. Presentation of the vehicle to a dealer
is an example of the kind of action that creates a question regarding
sufficiency of notice such that a claim should survive. Francis v. Gen.
Motors, LLC, No. 19-11044, 2020 WL 7042935, at *12 (E.D. Mich. Nov.
27
30, 2020). If a court finds that no notice has been alleged, the Court will
have to examine state-specific standards to determine whether that
claim can still survive.
This claim is best evaluated by considering the facts alleged for
each state and Plaintiff:
State9
AL (1)
Authority10
Conclusion
Plaintiff McCormick brought his Satisfies notice.
truck to a dealer. ¶ 42, PageID.3419.
FL (1)
Plaintiff Reasor brought her truck to Satisfies notice.
a dealer. ¶ 100, PageID.3463.
IL (3)
Plaintiff Howton brought his truck to Satisfies notice.
a dealer. ¶ 73, PageID.3441-42.
Plaintiff Gwinn never brought his Potentially insufficient
truck in to a dealer, and does not allegation of notice,
allege any specific attempts to discussed below.
provide notice to GM regarding his
complaint under IL law. See ¶ 751,
ECF No. 40, PageID.3687.
Plaintiff Alliss: same.
MD (1)
Potentially insufficient
allegation of notice,
discussed below.
This Plaintiff will be terminated N/A
(ECF No. 52).
The numbers in parentheses indicate the number of plaintiffs who have
claims from that state.
10 All citations are to the SAC, ECF No. 40.
28
9
MI (1)
Plaintiff Recchia never brought his Potentially insufficient
truck in to a dealer, and does not allegation of notice,
allege any specific attempts to discussed below.
provide notice to GM regarding his
complaint under MI law. See ¶ 989,
ECF No. 40, PageID.3748.
MT (1)
Plaintiff Kinchloe brought his truck Satisfies notice.
to a dealer. ¶ 27, PageID.3408.
NY (1)
Plaintiff Chapman brought his truck Satisfies notice.
to a dealer. ¶ 14, PageID.3396-97.
PA (2)
Plaintiff Joyce brought his truck to a Satisfies notice.
dealer. ¶ 30, PageID.3411.
Plaintiff Cappiello brought his truck Satisfies notice.
to a dealer. ¶ 69, PageID.3438-39.
VA (1)
Plaintiff Taylor brought his truck to a Satisfies notice.
dealer. ¶ 34, PageID.3413-14.
For Plaintiffs Gwinn, Alliss, and Recchia, who did not present their
cars to a dealer, the Court must determine if any other actions they took
could constitute notice. As noted, this requires examining the
underpinnings of the notice requirement in each state. In Michigan, the
“notice requirement is not just a formality. . . . Pre-suit notice allows the
buyer and the breaching party to negotiate and propose settlements,
including potential cure, without resort to litigation.” Johnston v. PhD
Fitness, LLC, No. 16-CV-14152, 2018 WL 646683, at *3 (E.D. Mich. Jan.
31, 2018) (citing American Bumper & Mfg. Co. v. Transtechnology Corp.,
29
652 N.W.2d 252, 256 (Mich. Ct. App. 2002)). In Illinois, “buyers . . . must
directly notify the seller of the troublesome nature of the transaction or
be barred from recovering for a breach of warranty. [However,] [d]irect
notice is not required when . . . the seller is deemed to have been
reasonably notified by the filing of the buyer's complaint alleging breach
of UCC warranty.” Connick v. Suzuki Motor Co., 675 N.E.2d 584, 589 (Ill.
1996). “Only a consumer plaintiff who suffers a personal injury” can
satisfy notice through the filing of a complaint. Id. at 590.
Counsel for Plaintiffs indicated at the hearing that communications
sent to GM included “two different letters in the latter half of 2019 . . . in
the context of Consumer Protection Act claims.” Tr. 1/29/21, 54:15-19,
ECF No.66, PageID.7110. These letters are not in the record, and
Plaintiffs do not provide any more specific information about their
contents. Importantly, they do not allege that any sort of letter or
communication was sent to GM specifically about these named Plaintiffs
or their claims. Plaintiffs also contend the fact that other lawsuits about
this specific defect are underway should satisfy the notice requirement.11
There is authority on both sides of this issue. Compare City of Wyoming
v. Procter & Gamble Co., 210 F. Supp. 3d 1137, 1158 (D. Minn. 2016)
(“Defendants have been locked in litigation . . . in courts all across the
country; it could hardly be said that Plaintiffs’ complaint was the first
time Defendants received notice of the kind and type of claims raised by
Plaintiffs.”) with Schmidt v. Ford Motor Co., 972 F. Supp. 2d 712, 718
(E.D. Pa. 2013) (“actual or constructive notice of the defect on the part of
the manufacturer is irrelevant; the plaintiff must provide notification
independently.”). The Court finds that this exemption to pre-suit notice
30
11
Under Michigan law, these actions are not sufficient to allege
adequate pre-suit notice. Neither the letters nor the filling of the lawsuit
would have given GM notice about Recchia’s specific claims or allowed
GM to resolve such claims with him pre-litigation. If the notice
requirement were intended merely put a manufacturer generally “on
guard” about the potential of a defect, the outcome might be different.
But it is evident from the caselaw cited that the standard is higher in
Michigan. See also Def.’s Suppl. Br., ECF No. 67, PageID.7151-52. By
contrast, the Illinois Plaintiffs here are suing for personal injury, and
therefore the filing of this lawsuit satisfies their notice requirement. The
IWM claim under Michigan law (Plaintiff Recchia, X.II) is therefore the
only claim dismissed for failure to provide pre-suit notice.
5. Certain claims time-barred
Lastly, GM alleges that the statute of limitations on implied
warranty claims is four years, starting at the time of sale, and lists nine
plaintiffs (Gwinn, Kincheloe, Joyce, Taylor, McCormick, Recchia, Smith,
Sizelove, and Lawson) whose claims it alleges are barred because they
bought their vehicles more than four years before this action. ECF No.
48, PageID.4932. Plaintiffs concede that these individuals’ truck
cannot therefore be applied broadly to all Plaintiffs in a case: whether it
is available depends on the relevant state law.
31
purchase dates put them all outside the four-year time period,12 but
respond that the claims are either equitably tolled due to fraudulent
concealment or tolled due to the discovery rule,13 and more generally that
when there are fact questions about accrual it is inappropriate to dismiss
at the motion to dismiss stage. ECF No. 53, PageID.6006-08.
The applicability of the tolling provisions relied upon by Plaintiffs
name varies state-by-state. The Court will identify appropriate authority
under each state’s law regarding when tolling is allowed. If one basis of
tolling is available (either through fraudulent concealment or a discovery
rule), that singular basis will be identified:
This four-year statute of limitations derives from UCC § 2-725.
Although the Uniform Commercial Code has not been universally
adopted, Plaintiffs do not dispute that it applies to all of the Plaintiffs
identified by GM here.
13 “The discovery rule postpones accrual of a cause of action until the
plaintiff discovers, or has reason to discover, the cause of action.” In re
CP4, 393 F. Supp. 3d at 884 (quoting Philips v. Ford Motor Co., No. 14CV-02989-LHK, 2015 WL 4111448, at *7 (N.D. Cal. July 7, 2015)).
32
12
State
IL
(Gwinn)
Tolling through
Tolling through
fraudulent
discovery rule?
concealment?
Can only be used if Not recognized.
there is
“affirmative
concealment.”
Cangemi v.
Advocate S.
Suburban Hosp.,
845 N.E.2d 792,
804 (Ill. App. 2006).
Conclusion
No tolling
available,
grant
dismissal of
claim.
MT
(Kincheloe)
Discovery rule
Discovery
applies if “the facts rule could
constituting the
toll claims.
claim are by their
nature concealed or
self concealing.”
Johnston v.
Centennial Log
Homes &
Furnishings, Inc.,
305 P.3d 781, 788
(Mont. 2013).
PA
(Joyce)
Duration of IWM
claim can be
extended with a
“latent defect.”
Hornberger v. Gen.
Motors Corp., 929
F. Supp. 884, 888
(E.D. Pa. 1996).
33
Discovery
rule could
toll claims.
VA
(Taylor)
Can only be used if
there is
“affirmative
concealment.”
Evans v. Trinity
Indus., Inc., 137 F.
Supp. 3d 877, 882
(E.D. Va. 2015).
MI
(Recchia)
Can only be used if
there is
“affirmative
concealment.”
Hennigan v. Gen.
Elec. Co., No. 0911912, 2010 WL
3905770, at *5
(E.D. Mich. Sept.
29, 2010).
34
No tolling
available,
grant
dismissal of
claim.
Discovery rule
applies in cases of
fraud. In re Mentor
Corp. ObTape
Transobturator
Sling Prod. Liab.
Litig., No.
2004408MD2004C
DL, 2016 WL
4446460, at *2
(M.D. Ga. Aug. 19,
2016).
AL
(McCormick)
Not recognized.
Discovery
rule could
toll claims.
Not recognized.
No tolling
available,
grant
dismissal of
claim.
CA
(Smith,
Sizelove,
Lawson)
Discovery rule is
recognized. In re
Gen. Motors LLC
CP4 Fuel Pump
Litig., 393 F. Supp.
3d 871, 884 (N.D.
Cal. 2019).
Discovery
rule could
toll claims.14
For states where the discovery rule exception is recognized, the
Court finds Plaintiffs have alleged sufficient facts to raise the possibility
that the rule could apply, and therefore for those claims the limitations
period can be tolled. However, as discussed infra Section III.E.1,
Plaintiffs have not sufficiently alleged affirmative concealment. Because
that is necessary for tolling to take place in the other states named, those
Plaintiffs cannot succeed in tolling the statute for their claims under this
theory. Therefore, the IWM claims under Illinois (Plaintiff Gwinn, O.II),
Michigan (Plaintiff Recchia, X.II), and Virginia (Plaintiff Taylor, UU.II)
law will be dismissed as time-barred.
C.
Magnuson-Moss Warranty Act
GM argues that a “nationwide” claim for breach of the MMWA
cannot proceed without being predicated on viable state law breach of
warranty claims. ECF No. 48, PageID.4934. Plaintiffs counter that their
warranty claims are validly pled and therefore the MMWA cause of
action should survive. ECF No. 53, PageID.5996.
Again, the Court finds this conclusion is the law of the case based on
the previous opinion.
35
14
The MMWA only provides a federal cause of action for consumers
who are damaged by a failure to comply under a state warranty; MMWA
claims therefore “stand or fall” with valid state law warranty claims. In
re FCA US LLC Monostable Elec. Gearshift Litig., 280 F. Supp. 3d 975,
1017 (E.D. Mich. 2017). Consequently, any Plaintiffs that have viable
state law warranty claims will also have viable MMWA claims. See, e.g.,
In re MyFord Touch Consumer Litig., 46 F. Supp. 3d 936, 986 (N.D. Cal.
2014) (“Accordingly, the Court concludes that the MMWA claim is
dismissed in part—more specifically, to the extent the Court has
dismissed any of the state express and implied warranty claims.”).
Therefore, Count I of the SAC will be dismissed as to any of the state subclasses where their claims for IWM under state law have been found not
to be viable.
D.
Breach of Contract
Plaintiffs concede that their breach of contract claims are
insufficiently pled in light of this Court’s opinion in Raymo, 2020 WL
4366061, at *20. See n. 8, ECF No. 53, PageID.5968; Tr. 1/29/21, 12:1821, PageID.7068. Therefore, Count III of the SAC is dismissed.
E.
Deficiencies in fraudulent concealment claims
GM makes six arguments as to why Plaintiffs’ fraudulent
concealment claims are insufficiently pled. Having considered these
arguments and the laws of the state jurisdictions at issue, the fraudulent
36
concealment claims will be dismissed as to eleven states.15 Additionally,
although the Court declines to dismiss any specific Named Plaintiffs at
this time, any consumer protection claims are dismissed to the extent
they involve claims where GM did not have knowledge of the defect prior
to the time of sale.
Neither party advocates for a particular definition of fraudulent
concealment or highlights any significant differences in formulation of its
elements between various states’ laws, so the Court will use a definition
from this district’s caselaw. Plaintiffs must allege that:
(1) GM concealed or omitted a material fact;
(2) GM had a duty to disclose;
(3) Plaintiffs justifiably relied on the omission of material fact;
and
(4) Plaintiffs suffered damages as a result.
Matanky, 370 F. Supp. 3d at 789.
Plaintiffs make a number of allegations in their SAC (ECF No. 40)
that are relevant to fraudulent concealment, and the Court will
summarize them here before addressing GM’s arguments:
GM touted “durability, fuel economy, and performance qualities” of
the class vehicles and said that they had “no significant defects and
were compatible with US diesel fuel.” Advertising materials
promised that class vehicles would be “11 percent more fuel
Count II is dismissed as to OH, NJ, and SC (failure to allege duty to
disclose), CA, MI, and NH (barred by economic loss doctrine), and LA,
MS, TN, and OR (preempted by state statute).
37
15
efficient,” take performance and fuel economy “to the next level,”
and have proven durability. ¶ 303.
GM “intentionally concealed and suppressed material facts
concerning the durability, performance, fuel efficiency, and quality”
of the vehicles, as well as facts concerning their “compatability (sic)
with American diesel fuel.” ¶ 299.
Each named plaintiff states that they “saw and recalled GM’s
television commercials, internet advertisements, sales brochures,
and heard statements from GM dealership sales representatives
wherein GM claimed that the Duramax diesel truck which Plaintiff
ultimately purchased had superior fuel economy, reliability, and
durability compared to other trucks in the American market. More
importantly, Plaintiff relied on representations from GM through
the channels listed above that the Class Vehicle was compatible
with American diesel fuel . . . Absent these representations,
Plaintiff would not have purchased the vehicle, or would have paid
less for it, because it is unfit for its ordinary use.” See, e.g., ¶ 15.
As to the question of GM’s knowledge, Plaintiffs allege that the
following known or knowable facts all indicate GM was aware of this
defect before selling these trucks to consumers:
Higher lubricity specifications required for CP4 pumps than those
required for U.S. diesel fuel as early as 2010. ¶ 301.
38
A National Highway Traffic Safety Administration (“NHTSA”)
safety investigation opened relevant to the CP4 pumps in
Volkswagen and Audi cars in February 2011. ¶ 169.
Internal communications from the 2009-2011 between auto
manufacturers Volkswagen and Audi and the CP4 manufacturer
Bosch regarding the defective CP4 pumps. Communications were
made public in 2011 as a part of the NHTSA investigation. ¶ 170.
An alleged internal tracking system at GM of “lessons learned”
related to the CP4, as well as an alleged general industry practice
of keeping up with safety issues, recalls, and trade organization
bulletins. ¶¶ 172-79.
Alleged pre-release testing that GM would have conducted prior to
the release of the CP4 pump in cars. ¶¶ 184-85.
Six complaints posted in online forums and seventeen consumer
complaints filed with the NHTSA, spanning between October 2010
and April 2018. ¶¶ 188-211.
Field data GM submitted to the NHTSA from October – December
2011 with reports of CP4 pump failure. ¶¶ 180-81.
An uptick in warranty claims submitted to GM from 2010 to 2011
related to the fuel pump. ¶ 182.
Internal service bulletin regarding “hard start or no start” problems
with Duramax diesel engines issued in August 2014. ¶ 216-17.
39
1. Failure to meet Rule 9(b)’s particularity requirements
for fraud allegations
First, GM alleges that Plaintiffs have not sufficiently pled their
claims of fraudulent concealment. ECF No. 48, PageID.4939-41. Claims
for fraud must meet the heightened pleading standard of Fed. R. Civ. P.
9(b). There are two kinds of fraudulent concealment claims, affirmative
and omission-based, and the requirements are different for each:
Sixth Circuit precedent demands that claims for affirmative
misrepresentations: “(1) specify the statements that the
plaintiff contends were fraudulent, (2) identify the speaker,
(3) state where and when the statements were made, and (4)
explain why the statements were fraudulent.” Frank, 547
F.3d at 569. For claims involving fraudulent omissions, Rule
9(b) requires that Plaintiffs plead “the who, what, when,
where, and how” of the alleged omission. Republic Bank & Tr.
Co. v. Bear Stearns & Co., 683 F.3d 239, 256 (6th Cir. 2012).
Specifically, a plaintiff must allege “(1) precisely what was
omitted; (2) who should have made the representation; (3) the
content of the alleged omission and the manner in which the
omission was misleading; and (4) what [defendant] obtained
as a consequence of the alleged fraud.” Id. Stating a claim for
fraudulent omission also requires pleading a duty to disclose.
MacDonald v. Thomas M. Cooley Law Sch., 724 F.3d 654, 665
(6th Cir. 2013).
Raymo, 475 F. Supp. 3d at 705. Plaintiffs fail to specify the type of
fraudulent concealment they are alleging, presumably leaving it to the
Court to do the work of assessing whether facts alleged support either.
With regard to affirmative misrepresentation, the only specific
statements that Plaintiffs cite are those noted above from advertising
40
materials. SAC ¶ 303. However, “[i]nherently subjective” statements, or
statements that are so general as to be mere puffery, cannot form the
basis of a fraud claim. Raymo, 475 F. Supp. 3d at 705-06 (quoting Counts
v. Gen. Motors, LLC, 237 F. Supp. 3d 572, 598 (E.D. Mich. 2017)). The
Court does not find any of the advertising descriptors cited by Plaintiffs—
"11 percent more fuel efficient,” “take[s] performance and fuel economy
to the next level,” or “proven durability”—to amount to anything other
than puffery. See Raymo, 475 F. Supp. 3d at 706 (finding statements such
as “leading fuel economy,” “unprecedented performance and fuel
economy,” “environmentally clean,” “low-cost of ownership,” and “built to
last for years” to be “general and nonquantifiable” and therefore puffery).
While “11 percent more fuel efficient” might seem closer to the types of
statements the Court found to be actionable in Bledsoe II, the allegations
fail to indicate what benchmark the 11% figure is being compared to (i.e.,
the trucks are 11% more fuel efficient than what?), and therefore the
Court does not consider the use of this figure to be a quantifiable promise
that could constitute affirmative misrepresentation. Cf. Bledsoe v. FCA
US LLC (“Bledsoe II”), 378 F. Supp. 3d 626, 648-50 (E.D. Mich. 2019).
However, the specific allegations Plaintiffs make contain enough
facts at this stage to show fraudulent omission. Summarizing Plaintiffs’
allegations in the light most favorable to them, the complaint alleges that
(1) GM did not provide relevant and needed information about the trucks’
compatibility with U.S. diesel or issues with the CP4 pump, (2) GM
41
should have done so, as the manufacturer of the vehicles with superior
knowledge about this pump, (3) this caused Plaintiffs to buy trucks that
they otherwise would not have, and (4) they paid GM a premium that GM
subsequently retained. SAC ¶¶ 299-300, 303-14. They have made
sufficient “who, what, when, where, how” allegations under Fed. R. Civ.
P. 9(b) for an omissions-based claim at this stage, and the Court declines
to dismiss any claims for not meeting the Rule 9(b) pleading standard.
2. Failure to allege knowledge at the time of sale
Plaintiffs concede that to allege fraud, they must allege GM was
aware of a defect at the time of sale. ECF No. 48, PageID.4941. GM
argues that none of the allegations of knowledge made by Plaintiffs are
concrete enough. ECF No. 48, PageID.4941-47.
While there is no “smoking gun” allegation pinpointing a moment
in time when GM knew to a certainty about issues with the CP4 pump
and U.S. diesel fuel, see, e.g., Matanky, 370 F. Supp. 3d at 791 (public
statement by the Chief Engineer indicated that GM had knowledge of a
defect prior to car’s release), it is also not the case that Plaintiffs have
alleged no facts or only conclusory statements to indicate GM at some
point developed knowledge about the defect in question. See, e.g., Miller
v. Gen. Motors, LLC, No. 17-CV-14032, 2018 WL 2740240, at *13-14 (E.D.
Mich. June 7, 2018).
In considering each potential source of “knowledge” alleged by
Plaintiffs, the Court does not find the general allegations about pre42
release testing, internal tracking systems, or general industry practices
to be persuasive by themselves. SAC ¶¶ 173-79, 184-85. Plaintiffs do not
provide concrete information about these, but merely assert that they
must exist, and this Court and others in this district have found those
types of allegations to be at too high a level of generality to allege
knowledge. Raymo, 475 F. Supp. 3d at 707-09 (collecting cases).
But the SAC also points to a NHTSA safety investigation that was
opened in February 201116 regarding CP4 pumps in Volkswagen and
Audi vehicles. SAC ¶ 169. As a part of this investigation, GM submitted
field data regarding CP4 pump failures collected between October and
December 2011 to NHTSA. SAC ¶¶ 180-81, see also SAC Ex. 18, ECF No.
40-20. The investigation also published on NHTSA’s website internal
communications between Volkswagen, Audi, and the CP4 manufacturer
Bosch about defective CP4 pumps. SAC ¶ 170. Although this
investigation centered on two other automakers, not GM, the Court is not
convinced by GM’s argument that Plaintiffs’ allegations do not
specifically posit that GM “saw any of those communications.” Tr.
1/29/21, 24:16-20, PageID.7080.17 Particularly when GM and other OEMs
The Court has only relied on the portions of the NHTSA safety
investigation included in the SAC by Plaintiffs, but the Office of Defects
Investigation (“ODI”) Resume for the investigation confirms it was
opened on February 7, 2011. See ODI Resume EA 11-003 (March 26,
2021), https://perma.cc/4CWN-L5VE.
17 Some other sources of knowledge cited by Plaintiffs—complaints posted
on online forums, consumer complaints filed with the NHTSA, an uptick
43
16
were asked to submit data, it seems implausible that GM would not have
carefully examined the rest of the investigation materials given its vested
interest in knowing as much as possible about the possibility of problems
with the fuel pump that was in its trucks. This investigation involves the
same pump model18 that GM was using, made by the same manufacturer,
and includes email communications between Volkswagen, Audi, and
Bosch employees specifically discussing the pump, issues with fuel
lubricity, and the presence of metal shavings in the pump housing. See
in warranty claims, and an internal service bulletin issued in 2014—are
also part of the data that was available to GM, but their impact is a closer
call. Defendant GM argued that the number of complaints cited is quite
small in the context of GM’s overall production volume. Tr. 1/29/21,
28:11-21, PageID.7084. But Plaintiffs reasonably allege that auto
manufacturers “watch year-on-year failure data closely” to effectively
react to problems. ECF No. 53, PageID.5979. Having already decided
that Plaintiffs have sufficiently alleged knowledge through other
materials, and lacking contextual information to properly gauge the
additive value of these other allegations, the Court will not determine
whether these sources on their own would be enough to establish
knowledge. They were part of the available information that should have
alerted GM to problems with the CP4 pump and may become more
relevant with the addition of more context through discovery in
determining exactly when GM developed knowledge regarding the defect.
18 GM argues that parts are custom-made for various manufacturers, and
therefore the CP4 pump made for Volkswagen and Audi is not necessarily
exactly the same as the one made for GM. Tr. 1/29/21, 73:2-6,
PageID.7129. But at this stage Plaintiffs plausibly allege that it was the
same pump. Id. at 47:4-8, PageID.7103. Even if there could have been
customizations made for GM, taking the SAC in the light most favorable
to Plaintiffs, the fact that it has the same name (CP4) and the same
manufacturer (Bosch) plausibly indicates that it is the same or a
substantially similar pump.
44
SAC Exs. 15-17, ECF Nos. 40-17, 40-18, 40-19. The Court finds it
plausible that this kind of investigation would have put GM on notice
about issues with its own CP4 pumps.
Although the public release of this information in February 2011
seems like the strongest indicator of a starting point for GM’s knowledge,
Plaintiffs also plausibly allege that GM engineers would have kept
abreast of these kinds of developments even before then, through
tracking of competitors and emerging safety or technical issues. SAC ¶
172. Plaintiffs point to two research studies, from August 2005 and
September 2009, regarding fuel injection pumps and fuel lubricity,
specifically warning manufacturers of the potential for malfunction with
fuels in the American market. SAC ¶¶ 154-55. These studies did not
specifically discuss the CP4 pump. Plaintiffs nevertheless allege these
papers would have put GM on notice regarding the potential for fuel
pump malfunction with American diesel fuel such that when issues
regarding the CP4 pump came to light, it would likely have taken action
to investigate further. Taking the totality of these allegations in the light
most favorable to Plaintiffs, as soon as manufacturers began having
issues with CP4 pumps that used American diesel it is not implausible
that GM would have become aware of the defect.19
Plaintiffs cite some studies and academic reports from as far back as
2002, presumably to show that knowledge about the defects in this pump
and its relationship with dry diesel were commonly understood in the
automotive industry. See generally SAC ¶¶ 150, 154-56. But the Court
45
19
It is important to determine a starting point for GM’s knowledge of
the alleged defect with the CP4 pump in class vehicles because that
affects which Plaintiffs here have viable claims—any Plaintiff who
bought their truck before that starting point cannot pursue fraudulent
concealment claims.
Given the lack of a single-source “event” that can be said to have
definitively marked the moment when knowledge of the defect was
imparted to GM, the Court is unable at this time to identify such an exact
starting point. But looking at all of Plaintiffs’ allegations, it is evident
that at some point within the timeframe covered by the allegations in the
SAC, the balance of available evidence would have tipped the scale
towards knowledge. While the evidence is strongest after February 2011,
the complaint overall raises a plausible allegation of knowledge of the
problem at the time when the vehicles at issue were manufactured,
before any Plaintiffs bought their trucks.20 Conversely, it is clear given
the elements required to show fraudulent concealment that no claims
related to purchases that occurred before GM had knowledge of this
defect, whenever that was, can survive.
does not find these studies alone to support Plaintiffs’ allegations
knowledge of this defect—which involves both the nature of dry diesel
and its effects on the CP4 pump—at the time they were published.
20 The only Plaintiff whose claim would be affected by a February 2011
cut-off is Bruce Dawson, who purchased one of his vehicles in October
2010. But the Court declines to dismiss his claim at this time given the
uncertainty regarding the exact starting point of knowledge.
46
Further clarification will likely emerge in discovery, and assuming
Parties still disagree about the exact starting point of GM’s knowledge,
the question can be addressed again at the summary judgment stage. The
Court declines at this time to dismiss any fraudulent concealment claims
for lack of knowledge.
3. Failure to allege a duty to disclose
Plaintiffs also concede that they have to allege GM had a duty to
disclose information about the defect to consumers in order to succeed on
a fraudulent concealment claim. They offer various theories (superior
knowledge, creation of a false impression, and material defect) that they
say give rise to such a duty. ECF No. 53, PageID.5977-586.
The Court notes that Parties did not make it easy to evaluate this
issue. For Plaintiffs, whether any of these theories does or does not apply
depends on the state’s law in question, and the caselaw presented
required supplemental briefing related to a specified list of states. Tr.
1/29/21, 81:8-18, PageID.7137. On the other hand, GM purports to
challenge the sufficiency of Plaintiff’s allegations under the laws of every
state, but only lodges specific arguments about why Plaintiffs’ pleadings
are insufficient for certain states. See ECF No. 48, PageID.4947. The
Court will therefore only address whether there is a duty to disclose in
the states where GM specifically challenges the issue, and declines to
grant the motion to dismiss for failure to allege a duty to disclose as to
any other states.
47
GM raises several different arguments regarding the duty to
disclose, according to the law of the individual states. Therefore, the
Court will outline on a state-by-state basis the argument for dismissal
raised by GM, the best authority from those cited by Parties regarding
any potential grounds on which a duty to disclose arises, and the Court’s
conclusion as to which position is correct:
State
FL
Conclusion
Deny Motion to
Dismiss
Plaintiffs cite In re Gen. Motors Air
Conditioning Mktg. & Sales
Practices Litig., 406 F. Supp. 3d 618,
638 (E.D. Mich. 2019) (duty to
disclose can arise under Florida law
when manufacturer has “superior
knowledge” of an alleged defect)
(quoting Majdipour v. Jaguar Land
Rover N. Am., LLC, 2013 WL
5574626, at *13 (D.N.J. Oct. 9,
2013)).
IL
Authority
GM argues no duty to disclose when
bought from a dealer.
Plaintiffs’ allegations
regarding the latent
nature of defect, which
would make it difficult
for them to uncover it
on their own, are
enough to allege GM’s
superior knowledge at
this stage.
GM argues no duty to disclose when
bought from a dealer.
Deny Motion to
Dismiss
Plaintiffs cite In re Chrysler-DodgeJeep Ecodiesel Mktg., Sales
Practices, & Prod. Liab. Litig., 295
F. Supp. 3d 927, 1011 (N.D. Cal.
2018) (“suppression of material
facts” creates a duty in IL).
Allegations regarding
concealment are
sufficient to show
suppression of
material facts at this
stage.
48
MI
Deny Motion to
Dismiss
Plaintiffs cite Glidden Co. v.
Jandernoa, 5 F. Supp. 2d 541, 553
(W.D. Mich. 1998) (duty to disclose
can arise if “one party possesses
superior knowledge, not readily
available to the other and knows
that the other is acting on the basis
of mistaken knowledge”).
NV
GM argues no duty to disclose when
bought from a dealer.
Plaintiffs’ allegations
regarding the latent
nature of defect, which
would make it difficult
for them to uncover it
on their own, are
enough to allege GM’s
superior knowledge at
this stage.
GM argues no duty to disclose when
bought from a dealer.
Deny Motion to
Dismiss
Plaintiffs cite Heldenbrand v.
Multipoint Wireless, LLC, No. 2:12CV-01562-RCJ, 2012 WL 5198479,
at *4 (D. Nev. Oct. 18, 2012) (duty to
disclose can arise from “the existence
of material facts peculiarly within
the knowledge of the party sought to
be charged and not within the fair
and reasonably reach of the other
party”) (citing Dow Chem. Co. v.
Mahlum, 114 Nev. 1468, 970 P.2d
98, 110 (1998) (overruled on other
grounds))).
Plaintiffs’ allegations
regarding the latent
nature of defect, which
would make it difficult
for them to uncover it
on their own, are
enough to allege GM’s
knowledge of material
facts at this stage.
49
NY
Deny Motion to
Dismiss
Plaintiffs cite Garcia v. Chrysler
Grp. LLC, 127 F. Supp. 3d 212, 236
(S.D.N.Y. 2015) (“a seller in an
arm's-length transaction has a duty
to disclose . . . if they have superior
knowledge of those facts and the
buyer could not discover them
through ordinary diligence under the
laws of . . . New York.”).
OH
GM argues no duty to disclose when
bought from a dealer.
Plaintiffs’ allegations
regarding the latent
nature of defect, which
would make it difficult
for them to uncover it
on their own, are
enough to allege GM’s
superior knowledge at
this stage.
GM argues no duty to disclose when
bought from a dealer.
Grant Motion to
Dismiss
Plaintiffs argue there is a duty to
disclose when the defect at issue
raises safety concerns, but none of
the cited cases specifically discuss
Ohio law or discuss omission-based
disclosure, rather than affirmative
misrepresentation. See In re Porsche
Cars N. Am., Inc., 880 F. Supp. 2d
801, 870-71 (S.D. Ohio 2012); In re
Volkswagen Timing Chain Prod.
Liab. Litig., 2017 WL 1902160, at
*19-20 (D.N.J. May 8, 2017); In re
MyFord Touch Consumer Litig., 46
F. Supp. 3d 936, 960 (N.D. Cal.
2014).
Plaintiffs do not cite
any authority
indicating that Ohio
recognizes a safety
defect duty to disclose.
50
See also Matanky v.
Gen. Motors LLC, 370
F. Supp. 3d 772, 795
(E.D. Mich. 2019)
(finding no authority
supporting a duty to
disclose when there is
a safety defect under
Ohio law).
PA
Deny Motion to
Dismiss
Zwiercan v. Gen. Motors Corp., 2003
WL 1848571, at *2 (Pa. Com. Pl.
Mar. 18, 2003) (duty to disclose
under PA law can arise when there
are defects that cause “significant
bodily harm”).
VA
GM argues no duty to disclose when
bought from a dealer.
Allegations that cars
can stall out without
warning while driving
are enough to allege
bodily harm.
GM argues no duty to disclose when
bought from a dealer.
Deny Motion to
Dismiss
In re Chrysler-Dodge-Jeep Ecodiesel
Mktg., Sales Practices, & Prod. Liab.
Litig., 295 F. Supp. 3d 927, 1011
(N.D. Cal. 2018) (“superior
knowledge” creates a duty in VA).
Plaintiffs’ allegations
regarding the latent
nature of defect, which
would make it difficult
for them to uncover it
on their own, are
enough to allege GM’s
superior knowledge at
this stage.
51
ME
GM argues no duty to disclose, citing
Brae Asset Fund, L.P. v. Adam, 661
A.2d 1137, 1140 (Me. 1995) (no duty
to disclose without “fiduciary or
confidential relationship”).
In re Chrysler-Dodge-Jeep Ecodiesel
Mktg., Sales Practices, & Prod. Liab.
Litig., 295 F. Supp. 3d 927, 1009
(N.D. Cal. 2018) (even if none of the
normal elements giving rise to a
duty to disclose under Maine law are
present, “fraud based on a party's
silence may still be actionable
depending on the facts of the case”)
(quoting Martin v. Ort, No. BANSCCV-2015-195, 2016 WL 1069907, at
*3 (Me. Super. Feb. 03, 2016)).
MO
GM argues duty only arises when
there is fiduciary relationship,
privity, or superior knowledge.
In re Gen. Motors Corp. Anti-Lock
Brake Prod. Liab. Litig., 966 F.
Supp. 1525, 1535 (E.D. Mo. 1997)
(duty to disclose can arise when
there is “superior knowledge,”
although it “requires the plaintiff to
show that he exercised due diligence
to discover the information”).
52
Deny Motion to
Dismiss
Dismissal is
inappropriate at this
stage given that
Plaintiffs have
successfully alleged
fraud by omission.
Deny Motion to
Dismiss
Plaintiffs’ allegations
regarding the latent
nature of defect, which
would make it difficult
for them to uncover it
on their own, are
enough to allege GM’s
superior knowledge
and their own due
diligence at this stage.
NJ
GM argues no duty to disclose, citing
Green v. G.M.C., No. A-2831-01T-5,
2003 WL 21730592, at *8 (N.J.
Super. Ct. App. Div. July 10, 2003)
(no duty to disclose when no
fiduciary relationship or special
reliance).
See also In re Volkswagen Timing
Chain Prod. Liab. Litig., No. CV 162765 (JLL), 2017 WL 1902160, at
*20 (D.N.J. May 8, 2017) (duty to
disclose when defendant makes a
partial disclosure).
SC
GM argues no duty to disclose, citing
Jimenez v. DaimlerChrysler Corp.,
269 F.3d 439, 447 (4th Cir. 2001)
(South Carolina only recognizes duty
to disclose in limited circumstances).
Grant Motion to
Dismiss
New Jersey only
recognizes a duty to
disclose when there is
a fiduciary
relationship or when
defendant has made a
partial disclosure,
neither of which
Plaintiffs can show.
Grant Motion to
Dismiss
Plaintiffs cannot allege
fiduciary relationship,
affirmative
misrepresentation, or
any other facts
recognized as creating
a duty to disclose in
South Carolina.
The Court will dismiss Count II as to Ohio, New Jersey, and South
Carolina for failure to allege a duty to disclose under state law.
53
4. Economic loss doctrine
The economic loss doctrine prevents a purchaser of a defective
product from using a tort claim to recover only economic damages. GM
alleges that this bars Plaintiffs’ fraud claims in certain states.21 ECF No.
48, PageID.4950. Plaintiffs concede that they are only seeking economic
damages, but counter that all the states named recognize fraud
exceptions to the doctrine, and that some also recognize safety
exceptions. ECF No. 53, PageID.5987-88.
Given the structure of the briefing, the Court will address these
claims in groups and cite the authority it finds most persuasive:
State
FL
KY
ME
MN
MO
NJ
NY
NC
PA
SC
21
Authority
Plaintiffs cite cases indicating that
these states recognize a fraud
exception to the economic loss
doctrine. ECF No. 53 at n.20,
PageID.5987.
Conclusion
Deny Motion to
Dismiss
GM does not respond.
See also Francis v. Gen. Motors,
LLC, No. 19-11044, 2020 WL
7042935, at *17-18 (E.D. Mich. Nov.
30, 2020) (collecting cases regarding
economic loss doctrine in various
states).
CA, FL, KY, MD, ME, MI, MN, MO, NH, NJ, NY, NC, PA, and SC.
54
CA
MD
Two recent and well-reasoned cases
indicate CA’s fraud exception only
extends to affirmative
misrepresentation, not omission. See
Mosqueda v. Am. Honda Motor Co.,
Inc., 443 F. Supp. 3d 1115, 1134
(C.D. Cal. 2020); Sloan v. Gen.
Motors LLC, 2020 WL 1955643, at
*25 (N.D. Cal. Apr. 23, 2020).
Grant Motion to
Dismiss
Both parties cite the same case,
which states that Maryland only
recognizes an exception to the
economic loss doctrine bar where the
concealment of a defect gives rise to
“a serious risk of bodily harm.” Lloyd
v. General Motors Corp., 916 A.2d
257, 275 (Md. 2007).
Deny Motion to
Dismiss
Plaintiffs have not
sufficiently alleged
affirmative
misrepresentation.
Plaintiffs have
sufficiently alleged
that the defect gives
rise to a risk of serious
bodily harm through
allegations that cars
can stall out without
warning while driving.
See also In re FCA US
LLC Monostable Elec.
Gearshift Litig., 355 F.
Supp. 3d 582, 590
(E.D. Mich. 2018)
(same finding
regarding Maryland
economic loss
doctrine).
55
MI
A thorough analysis by the Michigan
Court of Appeals indicates that
“action in tort may not be
maintained where a contractual
agreement exists, unless a duty,
separate and distinct from the
contractual obligation, is
established.” Sherman v. Sea Ray
Boats, Inc., 251 Mich. App. 41, 52,
649 N.W.2d 783, 789 (2002)
Grant Motion to
Dismiss
Plaintiffs cannot meet
the elements of fraud
in the inducement
because they do not
allege affirmative
misrepresentation.
Plaintiffs’ cited case indicates that
the “separate duty” exception is for
fraud in the inducement only. In re
FCA US LLC Monostable Elec.
Gearshift Litig., 355 F. Supp. 3d 582,
591 (E.D. Mich. 2018).
NH
Border Brook Terrace Condo. Ass'n
v. Gladstone, 137 N.H. 11, 18, 622
A.2d 1248, 1253 (1993) (collecting
cases indicating that economic loss
doctrine is recognized in New
Hampshire).
Grant Motion to
Dismiss
Plaintiffs cannot meet
the elements of
negligent
misrepresentation
Plaintiffs’ cited case indicates that
because they have not
New Hampshire makes an exception sufficiently alleged any
for negligent misrepresentation only. affirmative
Wyle v. Lees, 33 A.3d 1187, 1191
misrepresentations,
(N.H. 2011).
only omissions.
The Court will dismiss Count II as to California, Michigan, and
New Hampshire for being barred by the economic loss doctrine.
56
5. Certain state product liability statutes preclude
fraudulent concealment claims
GM argues that the Louisiana Products Liability Act precludes a
common law fraudulent concealment claim. ECF No. 48, PageID.4951.
Plaintiffs do not respond, so the Court finds this argument to be conceded.
Count II is therefore dismissed as to Louisiana plaintiffs.
GM also alleges in a footnote that other state fraudulent
concealment claims are preempted by state law, and therefore should be
dismissed in the context of putative class members. ECF No. 48 at n.31,
PageID.4952. Plaintiffs respond with cases to indicate that these state
statutes do not preclude fraud-based cases. ECF No. 53, PageID.5988.
Having reviewed each party’s briefing, Court will cite to the authority it
finds most persuasive for each state:
State
CT
Authority
N/A
Conclusion
Deny Motion to
Dismiss
The cases cited by GM
indicate that common
law claims are
sometimes barred
under the Connecticut
Products Liability Act,
but Plaintiffs’ claim is
under the Connecticut
Unfair Trade Practices
Act: the argument is
inapposite. See Count
H.I, PageID.3634.
57
OH
Jones v. Am. Tobacco Co., 17 F.
Supp. 2d 706, 718-19 (N.D. Ohio
1998).
Deny Motion to
Dismiss
MS
Elliott v. El Paso Corp., 181 So. 3d
263, 269 (Miss. 2015).
Grant Motion to
Dismiss
TN
Adkins v. Nestle Purina PetCare Co.,
973 F. Supp. 2d 905, 918 (N.D. Ill.
2013).
Grant Motion to
Dismiss
WA
Bylsma v. Burger King Corp., 293
P.3d 1168, 1170 (Wash. 2013).
Deny Motion to
Dismiss
Ohio products liability
statute does not
preempt all common
law fraud claims.
Fraud claims are
excluded from state
product liability
statute and therefore
not preempted.
OR
Weston v. Camp's Lumber & Bldg.
Supply, Inc., 135 P.3d 331, 337-38
(Or. Ct. App. 2006).
Grant Motion to
Dismiss
Given this analysis, the Court finds that Count II is also dismissed
as to Mississippi, Tennessee, and Oregon because these claims are
preempted by state statute.
6. Failure to plead injury
Lastly, GM alleges that the Plaintiffs who never experienced a
catastrophic failure cannot allege injury as required for element (4) of a
58
fraudulent concealment claim. ECF No. 48, PageID.4951-52. As already
discussed supra Section III.A.3, the Court recognizes overpayment at the
point-of-sale as an injury. The Court therefore declines to dismiss Count
II on this ground.
F.
Consumer protection
GM makes fifteen arguments to dismiss consumer protection claims
on various theories. Each consumer protection claim is brought under
relevant state consumer protection statute(s), and therefore most of these
theories are state-specific and must be analyzed individually. In total, 13
of the 54 consumer protection claims will be dismissed.22 Additionally,
consumer protection claims are dismissed if they involve claims where
GM did not have knowledge of the defect prior to the time of sale. See
supra Section III.E.2.
1. Alaska claim is a placeholder
GM argues that the Alaska consumer protection count does not
“actually assert a claim.” ECF No. 48, PageID.4952. Plaintiffs do not
respond. Such placeholder claims can be dismissed at this stage. See
Wozniak, 2019 WL 108845, at *1. The Court will dismiss Count D.I.
D.I (AK), L.I (GA), T.I (LA), PP.I (SC), RR.I (TN), G.I (CO) as a class
claim seeking damages, X.I (MI), KK.I (OH), II.I (NC), NN.I (PA), JJ.I
(ND) as related to injunctive relief, LL.I (OK) as related to injunctive
relief), and C.I (AL).
59
22
2. Insufficient pleading of deceptive conduct, reliance,
and causation
GM next argues various deficiencies in pleading the elements of
consumer protection claims. ECF No. 48, PageID.4952-54. Plaintiff
counters that to the extent it has met its pleading requirements under
Fed. R. Civ. P. 9(b) for its fraud claim, it has met the required pleading
standards for state consumer protection statutes. ECF No. 53,
PageID.5989-91.
Although each states’ consumer protection statutes are different,
the Court can resolve this claim because they all at a minimum require
deceptive conduct, reliance, and causation to be pled with the same level
of particularity required by Fed. R. Civ. P. 9(b). See, e.g., Matanky, F.
Supp. 3d at 797. GM does not allege that any state requires more than
that. And the Court has already found these elements of Rule 9(b) to be
satisfied, see supra Section III.E.1, at least for fraudulent omission. See,
e.g., ¶ 15, ECF No. 40, PageID.3398.
At this stage, courts do not generally find, as GM urges, that
Plaintiffs must identify specific advertisements or be able to articulate
exactly when they saw them. See, e.g., In re CP4, 393 F. Supp. 3d at 878;
Click, 2020 WL 3118577, at *6 (“Plaintiffs allege that they saw GM's
advertisements in the weeks and months prior to their purchases,
satisfying the “when” of Rule 9(b).”). GM cites to Wozniak, but in that
case Plaintiffs did not plead “any representations” that were made to
60
them regarding the defective lug nuts at issue. 2019 WL 108845, at *3
(emphasis added). The Court therefore declines to dismiss any counts on
this ground.
3. GM’s knowledge of the defect at the time of sale
GM repeats its argument that Plaintiffs have not sufficiently
alleged it had knowledge of the defect at the time of purchase. ECF No.
48, PgeID.4954. It makes no additional arguments on this point, and so
the Court’s conclusion is the same as explained previously. See supra
Section III.E.2. Any state consumer protection claims that involve
purchases made before GM had knowledge of the defect do not survive.
4. Certain state statutes do not allow class actions to be
brought with state consumer protection claims
Next, GM references the consumer protection statutes of Georgia,
Louisiana, South Carolina, and Tennessee, noting that these statutes do
not allow state consumer protection claims to be brought as part of a class
action lawsuit. ECF No. 48, PageID.4954-55.
In Shady Grove v. Allstate, the Supreme Court considered this
question of what to do when a state statute conflicts with Fed. R. Civ. P.
23, which governs class actions. Shady Grove Orthopedic Associates, P.A.
v. Allstate Insurance Co., 559 U.S. 393 (2010); see In re FCA Gearshift,
355 F. Supp. 3d at 599-600 (summarizing Shady Grove decision). Our
district, like many others, treats Justice Stevens’ opinion in Shady Grove
as controlling, which directs us to ask: is the state law substantive (in
61
which case it will control) or procedural (in which case Fed. R. Civ. P. 23
can supersede)?
The Court is persuaded by Judge Roberts’ discussion in Matanky,
finding that the bar on class actions in state consumer protection statutes
like these is best understood as a substantive policy choice: these states
do not want consumer protection claims to be maintained as part of class
actions. This was a choice made not simply because of procedural
convenience, but for reasons relating to the substantive nature of class
action lawsuits. 370 F. Supp. 3d at 798-99; see also Delgado v. Ocwen
Loan Servicing, LLC, No. 13CV4427NGGST, 2017 WL 5201079, at *10
(E.D.N.Y. Nov. 9, 2017). The Court will therefore dismiss Counts L.I
(Georgia), T.I (Louisiana), PP.I (South Carolina), and RR.I (Tennessee).
5. Colorado’s bar on class claims for money damages
Citing Colorado’s consumer protection statute, GM argues that it
does not allow class claims for money damages. ECF No. 48,
PageID.4955. The Court again references Judge Roberts’ analysis in
Matanky, which considers the same argument, and agrees with her
conclusion that the plain language of the statute does not allow class
claims for money damages. See 370 F. Supp. 3d at 799. Because Plaintiffs
are seeking monetary as well as injunctive relief, the Court will dismiss
Count G.I (Colorado) as a class claim seeking damages.
62
6. Michigan’s consumer
automobile sales
protection
statute
exempts
Michigan’s Consumer Protection Act (“MCPA”) contains a broad
exception: it does not apply to any transactions or conduct “specifically
authorized under laws administered by a regulatory board or officer
acting under statutory authority of this state or the United States.” Mich.
Comp. Laws § 445.904(1). GM argues that because automobile sales are
regulated by the state, they qualify within that exception, and therefore
Plaintiffs cannot bring claims under this statute regarding trucks
purchased in Michigan. ECF No. 48, PageID.4955-56.
The caselaw on this question has evolved over time. Judge Roberts
in Matanky found that automobile sales do fall under the statutory
exemption, because the sale of cars is authorized and regulated by law in
Michigan. 370 F. Supp. 3d at 799. Judge Leitman in a following decision
considered this analysis but rejected it at the motion to dismiss stage,
concluding that the party making the argument must specifically identify
the federal or state laws that qualify a given transaction for the
exception. In re Gen. Motors Air Conditioning Mktg. & Sales Practices
Litig., 406 F. Supp. 3d 618, 643 (E.D. Mich. 2019). But GM cites a
subsequent Michigan Court of Appeals decision that thoroughly reviews
various state and federal laws related to automobile sales before deciding
that automobile sales are “specifically authorized” such that they qualify
63
for the MCPA exception. Cyr v. Ford Motor Co., No. 345751, 2019 WL
7206100, at *1-3 (Mich. Ct. App. Dec. 26, 2019).
Given the authority from a Michigan state court interpreting this
statute and finding the exception to apply to automobile sales, the Court
will dismiss Count X.I (Michigan).
7. Class action notice requirement in Ohio’s consumer
protection statute
The Ohio Consumer Sales Practices Act (OCSPA) has a class action
notice requirement: to bring a class action under the OCSPA, a plaintiff
must base the action on a rule promulgated by the Attorney General or
on “an act or practice that was [previously] determined by a court to
violate the OCSPA.” In re Porsche Cars N. Am., Inc., 880 F. Supp. 2d 801,
868 (S.D. Ohio 2012). “[A] plaintiff must identify in his or her complaint
the rule or case” that satisfies this notice requirement. Id. (emphasis
added). GM alleges that Plaintiffs have failed to meet this requirement.
ECF No. 48, PageID.4956.
Though Plaintiffs point to such cases in their Response, ECF No.
53, PageID.5993, they do not identify them in the SAC. The Court will
therefore dismiss Count KK.I without prejudice.
8. North Carolina and Pennsylvania bar consumer
protection claims solely for economic losses
GM alleges that the consumer protection statutes for these states
bar claims solely for economic losses. ECF No. 48, PageID.4956. Plaintiffs
64
do not respond, which the Court will take as a concession, and therefore
Counts II.I (North Carolina) and NN.I (Pennsylvania) are dismissed.
9. Louisiana Products Liability Act precludes consumer
protection claim
GM alleges the Louisiana Products Liability Act is the exclusive
remedy in that state for claims against manufacturers, and therefore
there can be no cause of action under the Louisiana Unfair Trade
Practices and Consumer Protection Law as Plaintiffs currently allege.
ECF No. 48, PageID.4956. Plaintiffs do not respond, which indicates a
concession of the claim, and therefore Count T.I is dismissed.
10. Claims under the California Unfair Competition Law
(“UCL”) barred by adequate legal remedies
California’s UCL only provides for restitution and injunctive relief.
A plaintiff pursuing a claim under it must establish that there is no
adequate remedy at California law available, such that equitable relief is
the only option left. Philips v. Ford Motor Co., No. 14-CV-02989-LHK,
2015 WL 4111448, at *16 (N.D. Cal. July 7, 2015). GM argues that
because other state law claims and an MMWA claim are available to
Plaintiffs, the UCL cause of action must be dismissed. ECF No. 48,
PageID.4957.
Initially, the Court must allow this claim to survive as the law of
the case because it was already decided on by Judge Tigar in In re CP4.
393 F. Supp. 3d 871, 882 (N.D. Cal. 2019) (declining “to bar ‘the pursuit
of alternative remedies at the pleadings stage.’”). But the Court is also
65
persuaded by this reasoning: the UCL claim is essentially a pleading in
the alternative, and it would be premature to dismiss it now.
11. Louisiana, North Dakota, and Oklahoma do not allow
claims for injunctive relief
GM alleges that the consumer protection statutes in these states do
not allow claims for injunctive relief. ECF No. 48, PageID.4957. Plaintiffs
do not respond, which the Court will take as a concession, and therefore
Counts T.I (Louisiana), JJ.I (North Dakota), and LL.I (Oklahoma) will be
dismissed.
12. Sufficient allegations to show injury
GM again argues that those Plaintiffs who have not suffered a
catastrophic failure have not experienced an injury sufficient to invoke
the protection of any state consumer protection statutes. As already
discussed supra Section III.A.3, the Court recognizes overpayment at the
point-of-sale as an injury. The Court therefore declines to dismiss any
consumer protection counts on this ground.
13. Alabama and Pennsylvania Named Plaintiffs cannot
meet the requirements of state statutes
GM alleges that the consumer protection statutes in these states
only cover claims for vehicles purchased “primarily for personal, family,
or household use,” and that because Plaintiffs Cappiello and Miller allege
they used their trucks for work purposes, these claims cannot proceed.
ECF No. 48, PageID.4958. Plaintiffs do not respond, and such a failure
66
operates as a concession, so Counts C.I (Alabama) and NN.I
(Pennsylvania) will be dismissed.
14. Arkansas statute does
“diminution of value”
not
allow
claims
for
Under the Arkansas Deceptive Trade Practices Act (“DTPA”), a
private right of action is only available when “actual damage or injury is
sustained,” which occurs “when the product has actually malfunctioned
or the defect has manifested itself.” Wallis v. Ford Motor Co., 362 Ark.
317, 328, 208 S.W.3d 153, 161 (2005). GM concedes this, and merely
argues that there is no Arkansas named plaintiff to sustain this claim.
ECF No. 48, PageID.4958. But given that the claim is brought on behalf
of potential class members, who may very well have suffered “actual
damage or injury” as required by the statute, it would be premature to
dismiss it at this stage. See, e.g., Burns v. Toyota Motor Sales, U.S.A.,
Inc., No. 2:14-CV-02208, 2016 WL 128544, at *3 (W.D. Ark. Jan. 12, 2016)
(finding a cause of action under the ADTPA at the summary judgment
stage when plaintiff’s car rusted). The Court declines to dismiss the
Arkansas consumer protection claim on this ground.
15. Claims in certain states are time-barred
Lastly, GM argues that Plaintiffs’ claims in Alabama (McCormick),
Michigan (Recchia), and Oklahoma (Egelberry) are time-barred. ECF No.
48, PageID.4959. Plaintiffs do not argue that the claims are timely under
the relevant state statutes. Rather, they argue that the claims should be
67
equitably tolled because of GM’s “active concealment” and these
plaintiffs’ inability to recognize this defect on their own. ECF No. 53,
PageID.5995. They say they allege active concealment through GM’s
actions such as: continued lack of disclosure and concealment of the fact
that class vehicles can experience these failures,¶ 250; failure to issue a
recall, despite the issuance of internal service bulletins, ¶ 216-17; and
creation of a licensing scheme to sell premium diesel fuel, with greater
lubricity, so as to be more compatible with the CP4 pumps, ¶ 147. SAC,
ECF No. 40.
While these arguments are similar to Plaintiffs’ invocation of
equitable tolling due to “affirmative concealment” in the implied
warranty context, see supra Section III.B.5, based on a review of relevant
cases from each state the threshold for successfully pleading “active
concealment” in the context of state consumer protection statutes seems
to be lower. See In re: Takata Airbag Prod. Liab. Litig., No. 14-24009-CV,
2016 WL 6072406, at *12 (S.D. Fla. Oct. 14, 2016) (Alabama law) (finding
that a defendant’s “active concealment of the true nature of the defect”
can be sufficient to toll the statute of limitations); Gomba Music, Inc. v.
Avant, 62 F. Supp. 3d 632, 648-49 (E.D. Mich. 2014) (applying Michigan’s
fraudulent concealment statute to find that an allegation of “active
conspiracy to conceal” was sufficient to allow equitable tolling, at least at
the motion to dismiss stage); Masquat v. DaimlerChrysler Corp., 2008 OK
67, ¶ 18, 195 P.3d 48, 54 (Oklahoma law) (finding that “when there is
68
something more than mere failure to disclose, when there is some actual
artifice or some affirmative act of concealment,” a statute of limitations
can be equitably tolled).
The distinction between “affirmative concealment” and “active
concealment” may seem semantic. But the Court finds it significant that
cases discussing affirmative concealment generally list elements that
must be satisfied, akin to the elements for showing affirmative
fraudulent
concealment.
By
contrast,
cases
discussing
active
concealment use more general language, as quoted above. Additionally,
at least one other court found the type of activity Plaintiffs allege,
combined with the “hidden” and complex nature of the fuel pump defect,
to be sufficient to allege the elements of equitable tolling in the consumer
protection context. See Click, 2020 WL 3118577, at *14. The Court
therefore declines to dismiss the Alabama, Michigan, and Oklahoma
consumer protection claims on this ground.
G.
Unjust enrichment
Plaintiffs bring unjust enrichment (“UE”) claims in 14 states. GM
does not challenge the claims in any particular state or allege that any
claims are brought in states that do not recognize the cause of action.
Rather, it indicates that all the UE claims should fail for a number of
reasons: UE is not available when there is an express contract; UE is not
available when there is adequate legal remedy; UE is not available
because plaintiffs purchased their vehicles from third parties and
69
conferred no benefit directly on GM; and, UE claims cannot move forward
if Plaintiffs do not adequately plead fraudulent conduct under Fed. R.
Civ. P. 9(b). ECF No. 48, PageID.4961-62. Plaintiffs reply generally that
it is inappropriate to dismiss this claim at this stage, given that it is a
pleading in the alternative. ECF No. 53, PageID.6009-11.
This Court considered in-depth a similar set of arguments in Raymo
and does not see any distinguishing factors in this case that would
require a different result. 475 F. Supp. 3d 680, 709-11 (E.D. Mich. 2020)
(collecting cases regarding state law UE pleading standards). For any
state that recognizes the cause of action, “[t]he typical elements of a statelaw claim for unjust enrichment are: (1) the plaintiff conferred a benefit
upon the defendant; (2) the defendant accepted the benefit; and (3)
injustice would occur if the defendant did not pay the plaintiff for the
value of the benefit.” Id. at 709. Here, Plaintiffs broadly allege that GM
induced them to pay a premium for vehicles that did not perform as
advertised, and that indeed are unsafe to drive, and has since then
unjustly retained that benefit. The Court declines to dismiss any unjust
enrichment claims at this stage.
H.
Class allegations
GM makes two arguments as to why the Court should strike
Plaintiffs’ class allegations. Because, as explained below, the Court does
not find either persuasive, the motion to strike the class allegations is
70
denied. Class certification will be addressed at a later date on an
appropriate motion.
1. Statutory requirements for a class action under the
MMWA
GM argues that because the MMWA has a statutory requirement
of 100 named plaintiffs for a class action, the Court cannot have
jurisdiction over an MMWA class claim in this case. ECF No. 48,
PageID.4962. Plaintiffs counter that 100 named plaintiffs are not
required because the Class Action Fairness Act (“CAFA”) provides an
alternate basis for jurisdiction. ECF No. 53, PageID.6012-13.
The MMWA does require 100 named plaintiffs for a class action. 15
U.S.C. § 2310(d)(3)(C). CAFA requires that (1) at least one class member
have diversity of citizenship from one defendant, (2) there are more than
100 class members, and (3) the aggregate amount in controversy exceeds
$5 million. 28 U.S.C. § 1332(d)(2). Defendant does not contest that
Plaintiffs
do
meet
CAFA
requirements.
Tr.
1/29/21,
34:11-13,
PageID.7090.
When bringing a class action with an MMWA claim, must the class
action requirements of the MMWA be met where the requirements for
CAFA are fully established? Two circuits have addressed this question.
Compare Kuns v. Ford Motor Co., 543 F. App'x 572, 574 (6th Cir. 2013)
(determining that CAFA was meant to create another avenue for federal
court jurisdiction, and that “CAFA effectively supercedes the MMWA's
71
more stringent jurisdictional requirements”) with Floyd v. Am. Honda
Motor Co., 966 F.3d 1027, 1034 (9th Cir. 2020) (finding that “[t]he text is
clear that a requirement for an MMWA class action in federal court is at
least one hundred named plaintiffs” and that having diversity
jurisdiction under CAFA cannot replace the jurisdiction requirements in
the MMWA).
The Court will follow Kuns. As a preliminary matter, this is a Sixth
Circuit decision, and though unpublished it is authority the Court would
be inclined to follow over an out-of-circuit case. But the Court is also
persuaded by the reasoning in Kuns. Specifically, Floyd does not wrestle
with the fact that the MMWA defines two categories of courts with
jurisdiction over MMWA claims. An MMWA action can be brought: “(A)
in any court of competent jurisdiction in any State or the District of
Columbia; or (B) in an appropriate district court of the United States,
subject to paragraph (3) of this subsection.” 15 U.S.C. § 2310(d)(1).
Paragraph (3) contains the requirement of 100 named plaintiffs;
therefore, relying solely on the text of the statute, that requirement only
applies to class actions brought under (B).
By contrast, the language of (A), “any court of competent
jurisdiction,” is broad—there is no indication that it is restricted to only
state courts, or conversely that federal courts are excluded. Therefore, if
a district court had jurisdiction over an MMWA claim through CAFA, it
would meet the requirements of (A), and the 100 named plaintiffs
72
requirement would not apply. See also Barclay v. ICON Health & Fitness,
Inc., No. 19-CV-2970 (ECT/DTS), 2020 WL 6083704, at *7 (D. Minn. Oct.
15, 2020) (collecting district court cases coming to the same conclusion as
Kuns).
CAFA was created to expand litigants’ ability to access class actions
as long as particular conditions were met. For that reason, when CAFA
and the MMWA interact, the Court finds it more appropriate to
understand CAFA as providing an alternative basis for jurisdiction, not
“replacing” or superseding the MMWA requirements as Floyd would
characterize it.
2. Requirements of Fed. R. Civ. P. 23
GM also alleges that Plaintiffs cannot show their claims meet the
requirements of
a
class action,
citing
deficiencies relating
to
commonality, predominance, and superiority. Defendant is essentially
asking the Court to rule on the propriety of the proposed class at this
stage. ECF No. 48, PageID.4962-65. Plaintiffs reply that class claims
should not be ruled on until the class certification or summary judgment
stage, when there is a fuller record. ECF No. 53, PageID.6013-15.
It is true that the Court is not required to wait until the class
certification stage to rule on this question. Fed. R. Civ. P. 23(c)(1)(A). But
construing the facts in Plaintiffs’ favor, it is not a foregone conclusion
that they will be unable to meet class certification requirements after
discovery. They allege the same central defect on GM’s part and cite the
73
same marketing and advertising materials as supporting their fraud
claims. These facts distinguish this case from Pilgrim, where the Sixth
Circuit upheld denial of class certification at the motion to dismiss stage
because the Plaintiffs alleged fundamentally different conduct in each of
the states where they were bringing state-specific claims. Pilgrim v.
Universal Health Card, LLC, 660 F.3d 943, 947 (6th Cir. 2011) (noting
that the “program did not operate the same way in every State and the
plaintiffs suffered distinct injuries as a result” and that no amount of
discovery would save the class allegations). See also Francis, 2020 WL
7042935 at *23 (declining to rule on class certification at the motion to
dismiss stage because it was “procedurally premature”).
For these reasons, the Court declines to strike the class allegations
at this stage.
I.
Outstanding motions
1. Motions related to supplemental briefing (ECF Nos. 68,
69, 72, 74, 75)
At oral argument, the Court asked for supplemental briefing
related to (1) the duty to disclose in a named set of states, (2) equitable
tolling regarding the IWM as to several specific Plaintiffs, and (3) the
issue of affirmative concealment. Tr. 1/29/21, 81:8-82:11, PageID.713738. GM subsequently filed a supplemental brief. ECF No. 67. Plaintiffs
filed a motion to seal their supplemental brief and the brief itself. ECF
Nos. 68, 69. Plaintiffs’ brief addresses the three questions posed by the
74
Court, and also includes argument relating to GM’s knowledge of the
defect, accompanied by six exhibits. GM filed a motion to strike the brief.
ECF No. 72. Because there are several docket entries, some captioned as
motions and some not, that contain duplicative sets of material,23 the
Court will briefly outline what is included in each for clarity:
ECF No. 68: Plaintiffs’ Motion for Leave to File Under Seal
(PageID.7238-42), Plaintiffs’ Supplemental Brief (redacted) (Ex.
1, PageID.7248-7259), Exs. 2-7 (redacted).
ECF No. 69: Same as ECF No. 68, sealed and unredacted.
ECF No. 70: Plaintiffs’ Supplemental Brief (redacted)
(PageID.7366-77), case chart with supplemental authorities (Ex. 1,
PageID.7382-87), Exs. 2-7 (redacted).
ECF No. 71: Same materials as ECF No. 70, sealed and
unredacted.
ECF No. 72: GM’s Motion to Strike.
ECF No. 73: GM’s Response to Plaintiffs’ Supplemental Brief.
ECF No. 74: Plaintiffs’ Motion for Leave to File Under Seal
(PageID.7692-94) and Response to Motion to Strike (Ex. 1,
PageID.7698-7707).
ECF No. 75: Same materials as ECF No. 74, sealed and
unredacted.
ECF No. 76: Response to Motion to Strike (redacted).
ECF No. 77: Same as ECF No. 76, sealed and unredacted.
GM essentially asks the Court to strike Section III of Plaintiffs’
supplemental briefing (titled “GM’s Knowledge of the Defect”) as well as
the exhibits that it references. ECF No. 72, PageID.7496. It argues that
this section of the brief and these exhibits contain information that goes
The Court would direct Plaintiffs to L.R. 5.3(b)(3) for future such
filings—it is unclear why so many different combinations of the
documents were submitted.
75
23
beyond the Court’s request for supplemental briefing and seeks to
improperly introduce new factual allegations, and therefore this
information should not properly be before the Court to consider in
evaluating its Motion to Dismiss. Id. at PageID.7495-96. Plaintiffs
respond that striking is an extreme remedy, and that the Court has
discretion to consider these materials. ECF No. 74-1, PageID.7701.
In evaluating a motion to dismiss, the Court is limited to “the
Complaint and any exhibits attached thereto, public records, items
appearing in the record of the case and exhibits attached to defendant's
motion to dismiss so long as they are referred to in the Complaint and
are central to the claims contained therein.” Gomba Music, 62 F. Supp.
at 636 (quoting Bassett v. NCAA, 528 F.3d 426, 430 (6th Cir.2008)). If the
Court considers any materials beyond the pleadings and these limited
exceptions, it must convert the motion to dismiss into a motion for
summary judgment and evaluate it accordingly. Fed. R. Civ. P. 12(d).
To be clear, while the Court admitted it was “interested” in knowing
whether Plaintiffs had uncovered other evidence of GM’s knowledge, it
did not request that such factual material be filed, instead reminding
counsel that “this isn’t some kind of Congressional hearing.” See Tr.
1/29/21 at 44:2-8, ECF No. 66, PageID.7100. The Court did not request
supplemental legal argument or supplemental factual materials
regarding GM’s knowledge of the defect. None of the exhibits Plaintiffs
seek to introduce are public records or items specifically referred to in the
76
Complaint. And they do much more than “fill in the contours and details”
of the Complaint, which the Sixth Circuit has allowed—they present
completely new information relating to whether and when GM had
knowledge of the alleged defect. Armengau v. Cline, 7 F. App'x 336, 344
(6th Cir. 2001) (quoting Yeary v. Goodwill Indus.-Knoxville, Inc., 107 F.3d
443, 445 (6th Cir.1997)).
In their Response, Plaintiffs suggest they are submitting these
documents because they are “directly responsive to the Court’s inquiries,”
and because the Court “expressed an interest in viewing certain
documents referenced by Plaintiffs’ counsel during the Hearing,” but
inquiries in the context of a hearing are not invitations to submit new
records and evidence at the motion to dismiss stage in the absence of
some explicit instruction to do so. ECF No. 76, PageID.7732. The Court
made specific requests for supplemental briefing, and it did not ask
Plaintiffs to present additional evidence or present factual material
outside the record.24
Specifically, the Court said that “I did have some questions and I asked
some questions about the duty to disclose . . . it would still be helpful to
me for the plaintiffs to address what authority they have regarding the
law on duty to disclose for these states: Michigan, Nevada, New York,
Ohio, New Jersey, Maine and South Carolina . . . that was not entirely
clear from reviewing the briefs about the law in those states. . . . The
other issue had to do with this question about equitable tolling and
statute of limitations regarding the implied warranty of merchantability.
. . . [T]he question is what authority is there that they—those three can
satisfy the pre-suit notice so that it would toll the statute when they
77
24
The Court may not consider the addition of numerous exhibits
offered by Plaintiffs that fundamentally seek to also supplement their
factual allegations with information outside the pleadings. The Court
understands that these materials have been produced as a part of
discovery in Click, and that the Parties have agreed they can be properly
used in connection with this case. ECF No. 74-1, PageID.7700. As such,
they may be incorporated by Plaintiffs in relevant future motions
practice, but the Court will not and does not consider them now in any
way.
For the reasons suggested above, the Court will grant the Motion
to Strike (ECF No. 72) and strike all copies of the referenced material on
the docket. Accordingly, the Court orders Plaintiffs to file on the docket
a copy of their supplemental briefing with Section III and Exhibits 2-7
removed. The motions to seal are denied as moot (ECF Nos. 68, 69, 74,
and 75). Though it was necessary to review the stricken materials and
exhibits in order to rule on the Motion to Strike, as stated the Court did
not consider them in any way in conducting its analysis or decisionmaking regarding the Motion to Dismiss, and those materials have no
bearing on its conclusions.
never brought the vehicles to the dealer? And related to that . . . we talked
about affirmative concealment and whether that tolls the statute . . . how
is that different, if it does differ in any way, from fraudulent concealment.
I think I’d like you to discuss that as well.” Tr. 1/29/21, 81:10-82:11,
PageID.7137-38.
78
2. Motions related to Plaintiff Gary Goodwin (ECF Nos.
52, 62)
As the parties have stipulated to the voluntary dismissal of Plaintiff
Gary Goodwin (ECF No. 63), the Court will deny these motions (ECF Nos.
52, 62) as moot.
3. Defendant’s Motion to Dismiss Brandon Tirozzi for
Failure to Prosecute (ECF No. 78)
GM filed a motion to dismiss Plaintiff Brandon Tirozzi for failure to
prosecute. Plaintiffs have not responded. The Court is authorized to
dismiss a case if a plaintiff fails to comply with a court order. Fed. R. Civ.
P. 41(b). “When contemplating dismissal of an action under Rule 41(b), a
court will consider: (1) whether the party's failure to cooperate is due to
willfulness, bad faith, or fault; (2) whether the adversary was prejudiced
by the dilatory conduct of the party; (3) whether the dismissed party was
warned that failure to cooperate could lead to dismissal; and (4) whether
less drastic sanctions were imposed or considered before dismissal was
ordered.” Berry v. Cent. Michigan Univ., No. 2:19-CV-10306-TGB, 2019
WL 7293374, at *2 (E.D. Mich. Dec. 30, 2019) (citing Mulbah v. Detroit
Bd. of Educ., 261 F.3d 586, 589 (6th Cir. 2001)).
After being appropriately served, Plaintiff Tirozzi has not
responded to the Court’s Order to obtain counsel, or otherwise
communicated with the Court in any way, making it difficult to
determine what reasons are motivating his lack of response. ECF Nos.
41, 42. GM will certainly be prejudiced if, after the entry of this order, it
79
is forced to re-litigate these claims as to Plaintiff Tirozzi alone. The Order
granting leave to withdraw did not specifically warn him that he could
be dismissed for failure to find a new attorney. But because this is a class
action, he cannot remain in the case as a named plaintiff without an
attorney. Ziegler v. Michigan, 90 Fed. App’x 808, 810 (6th Cir. 2004).
“Less drastic” sanctions do not therefore seem to be an option. The Court
will grant the motion to dismiss Plaintiff Tirozzi, with the understanding
that his claims may live on inasmuch as he would be a member of
Plaintiffs’ putative class.
CONCLUSION
The Motion to Dismiss (ECF No. 48) is GRANTED IN PART and
DENIED IN PART. Of the total of 114 claims, 20 will be dismissed with
prejudice, 1 is dismissed without prejudice, and 93 survive. For
convenience, the Court attaches a Table of Claims containing a
breakdown of the claims that survive and those that are dismissed. The
Table of Claims is hereby incorporated in this Order by reference and
specifies according to the Count numbers in the SAC which claims
remain and which are being dismissed.
The Motion to Strike (ECF No. 72) is GRANTED, and the Clerk is
instructed TO STRIKE ECF Nos. 68, 69, 70, 71, 74, 75, 76, and 77 from
the docket. The Motions to Seal (ECF Nos. 68, 69, 74, 75) are DENIED
as moot because the materials will no longer be part of the docket.
Plaintiffs are ordered to file a copy of their supplemental briefing with
80
the stricken materials removed on the docket, and clearly label it to
indicate what is included.
The motions related to Plaintiff Gary Goodwin (ECF Nos. 52, 62)
are DENIED as moot. The Motion to Dismiss Plaintiff Brandon Tirozzi
(ECF No. 78) is GRANTED and he is DISMISSED WITH
PREJUDICE from this action.
SO ORDERED, this 31st day of March, 2021.
BY THE COURT:
/s/Terrence G. Berg
TERRENCE G. BERG
United States District Judge
81
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